Boeing Harvard Case Solution & Analysis

Strategic Decisions

Boeing, after its incorporation in 1916, has grown into a multi-billion dollar company. Its presence in 16 countries has provided it a competitive edge in terms of its global presence and contracts. Due to this, the company’s performance in terms of revenues and profits has significantly increased over a decade. The company is now getting and delivering more local and international commercial and defense contracts. This indicates the company’s success in taking and implementing the key strategic decisions.

The company is in a narrow economic moat, which gives it a short term and a relatively smaller competitive advantage over its competitors. It is a clear indication for the company to adopt multiple strategic techniques in order to not only maintain, but enhance its competitive edge over its competitors. These financial strategic decisions/techniques have been discussed as follows:

Buy Back Shares

The buying back of shares is a common strategy, which is used by the companies to improve their equity position. The buying back of shares enables the company to reduce its current outstanding shares which in turn increases the EPS of the company. It is a strategic technique, which creates not only the value for the shareholders, but also attracts new investors to invest in the business.

The buying back of shares will enable Boeing to increase its EPS of $ 7.36. This will also ensure an increase in the stock prices of the company. When the EPS will increase, the company’s stocks will create a lucrative demand in the market. This will not only increase the stock prices of the company, but will further improve the equity position of the company.

Acquisitions

Acquisitions and mergers are also an important aspect to create value for the stakeholders. Acquisitions will enable Boeing to benefit more in the form of synergy. These benefits will not only benefit the shareholders, but will also attract new investors to invest in the company.The shareholders will be benefit in the sense that they will get more dividends from the company. Also, the stock prices of the company will be boosted from the mergers of the company.

Another advantage that Boeing can get is in the form of cost benefits. Boeing is engaged in making aerospace products, which require substantial quantity of different type of material.Acquiring and investing in the firms, which are associated with the aerospace industry will enable the company to improve its profitability by purchasing materials at lower costs than the market.These. increased profits can be ultimately utilized for giving incentives to the shareholders.

Expansion/Diversification

Expansion in the sense of diversification will introduce the company in different industries. This introduction is healthy for Boeing in terms of increasing the market capitalization and worth of the company.The expansion of business will not only provide Boeing to increase their profitability, but will also enable the company to enhance its worth in the sight of market and shareholders.

Expansion in the similar industry will allow the company to gain multiple advantages in the form of increased market share and competitive edge. Moreover, the company will be able to benefit its shareholders more than before in the form of increased dividends and wealth, which will ultimately create a value for the shareholders.

Cost Reduction

Cost reduction is an effective way to increase the profitability of the company. Cost reduction for Boeing will enable the company to increase their current gross margin of 15.1%. This will ensure that the company will have sufficient funds to cover their expenses. The reduction in costs can be achieved by adopting different cost cutting methods. These methods will not only ensure the profitability, but will also bring new investments from the market.

The cost reduction is a chain of multiple events, which ultimately results in the benefits for the shareholders of the company. Increased profits mean that the company will distribute more of its profits from before, which will increase the wealth of the shareholders. This increase in dividends and stocks will attract the new investors in the market to invest in the company.

Script

Boeing is the leading aircraft and aerospace vehicles manufacturer. Since its incorporation, the company has emerged and transformed itself into a gigantic multi billion dollar business. In the modern era, the company is growing at an excellent pace, which is an indicator of the company’s clever and prompt strategies and decisions.Boeing is aimed at creating value for its stakeholders through innovation, which is reflected from the company’s core values and strategies. The company is expanding in terms of revenues and profitability and is aiming to expand in other regions of the globe as well................

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