Boeing

By Abhilash Bommaraboina (PGDRM Batch July’20-21) and Kartikay Bansal (PGDRM Batch Jan’21-22)

Risks in Boeing​

• Flawed and Unsafe Design: In 2019, Boeing 737 Max crashed twice in the Java Sea and Ethiopia killing all aboard. Both planes suffered the same malfunction attributed to a flaw in Boeing’s design of the 737 Max. Boeing’s flawed and unsafe design of 737 a major weakness.​
• Over-Outsourcing: Boeing relies heavily on outsourcing the manufacture of the components and parts for its planes. The scale of Boeing’s outsourcing was highlighted recently after Spirit’s laid-off 2800 employees who worked primarily on the troubled 737 Max.​
• Overdependence on US Contracts: While most other aircraft manufacturers rely on airlines, Boeing depends on contracts from the US government. With about 27% of its revenue coming from the US government contracts, Boeing is at the mercy of US politics and economic factors in the American market.​
• Supply Chain Issues: Just any global operator, Boeing also faces several supply chain challenges attributed to its management strategies. This is a major weakness particularly for Boeing since it relies heavily on suppliers.​
• Intense Competition: Airbus and Boeing are two big players and bitter rivals with the backing of the EU and the US respectively. Competition in the airline manufacturing sector is more complex since losing even a single customer or order can amount to losses in the millions.​
• Public Perception: Once a specific airplane model has been involved in a crash and regulators have grounded the entire fleet due to safety concerns, the public can permanently associate it with a lack of safety. It is very difficult to convince the public that the flaw in 737 Max is fixed.​
• The Pandemic: With the devastation, pain, and deaths due to the pandemic, most people would think twice before boarding a plane. The immediate threat is that the pandemic will bankrupt most airlines, forcing mass cancellations of their orders for Boeing.​

Boeing 737 max Debacle

What exactly happened ?

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Impact of events

Read the entire case study here: ​Risks in Boeing by Abhilash and Kartikay​

Disclaimer

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