.Even during the downturn, Boeing could maintain its gross profit margins as it cut down costs substantially. Thirdly, it is important to understand and satisfy customer demands and needs. Boring has been able to understand the needs of the market and make suitable changes in the product. Fourthly, sustained profit is equally important and Boeing has been able to meet this even though they do not give priority to financials over product development. However, Boeing has been facing certain challenges.
Critical Success factors
In the widebodies market, Boeing has an edge as it gives higher value and higher margins. Moreover, Asia is a very fast-growing market and Boeing is able to capture market share from this region (Aerospace &. Defense, 2005). This is because many carriers have mixed widebody fleets with different aircraft to suit different routes. Low cost carriers prefer the Boeing aircraft and the global trend is towards low-cost carriers. Boeing 777 model offers several advantages – lower maintenance cost and higher speed. Thus, Boeing targets the mid-market because this translates into lower operating costs, better fuel efficiency, and longer maintenance intervals. Boeing 737s is also highly reliable and economical commercial jet planes for short-haul travel (Brackenbury, 2007). . Its 777 models are also being used as a freighter extensively. This product of Boeing also has distinct advantages over other models and aircraft. It can carry ten-foot-high loads and has superior twin-engine operating economics (Dahl, 2006). Even for its other freighter models, Boeing has substantial demand and confirmed orders.
Outsourcing is the main strategy that Boeing has adopted in the past five years. While they do outsource to Russia and India for their high technical skills and cheap wages, they also outsource for reasons other than these. For instance, Boeing outsources manufacturing to India and China in exchange for aircraft sales. This is technically known as an offset agreement.