Академический Документы
Профессиональный Документы
Культура Документы
Group Members:
Kelly Karsten
Nicholas Frank
Maren Peasley
Shane Fuchigami
Sector Definition
Aerospace and Defense
Commercial
100+ seats
Jets <100 seats
Sector Subset
Why focus on Commercial?
Passenger miles have an impact on demand for
airplane production.
Airline profitability has a direct relationship
with plane production demand
Military information is classified
Current decreases in sector need to be
recognized
Boeing
Airbus
Bombardier
Embraer
Overview of Boeing
Leader in the commercial jet manufacturing for
decades
Merged with McDonnell Douglas in 1996
Second largest defense contractor in 2000
Leader in the satellite making (space industry)
business as of 2001
Overview of Airbus
Established in December of 1970
Boeings only competitor in commercial jet
manufacturing
Controlled 55% of the large passenger aircraft
market in 2001
Overview of Bombardier
Overview of Embraer
Boeing
Strengths
Weakness
Airbus
Strengths
Weaknesses
Bombardier
Strengths
Weaknesses
Operates in a growing
market
Huge increase in Net
Income from 2001 to
2002
Known as a socially
responsible company
Heavy competition by
Airbus and Boeing
Increased long-term
liabilities to fund
expansion
Embraer
Strengths
Weaknesses
Currently entering a
growing market
One of worlds four
largest commercial
aircraft manufacturers
New products offered
at low-cost and have
exceptional quality
Maturity Stage
Fierce Competition
Competing on Price
Difficult to grow in size
Cyclical employment / development
Expensive production costs and R & D
No international barriers
Low-growth industry
Highly saturated industry
Orders are declining and being cancelled
Focus: Try to expand market share
If airline profits fall, orders will fall
Mature Market
Airline Price Leverage
Cannot stop Production Line
Price Discounting
Macroeconomic Issues
U.S. Recession
- unprofitable airlines
September 11th
- low consumer confidence
Weak economy
Wars and Terrorism
- Oil prices
Technology
Changing consumer demand and new
technology spur higher seat aircraft
Older aircraft being replaced due to noise
regulations
Sector Attractiveness
Cons
Multi-Billion Dollar investments required
Break-even point can be years after production
starts
Worker unions are very powerful
Sector Attractiveness
Pros
Potentially billions of dollars in profit
Success Factors
Core competency in specific Aerospace
Discipline
Aircraft electronics
Frame/Fuselage design or production
Engine design or production
Mountains of $$
Sector Health
Aircraft manufacturers exhibit weak
financial ratios
Sector Opportunities
Improving good will with unions could be
an extremely valuable asset
Sector Problems
Competitors Moves
In time of war, shift focus to Military
Boeing
Supersonic Jet
Airbus
Super-Jumbo Jet
Bombardier
Focus on Smaller Jets
Embraer
Focusing on the 70-110 seat market
Bibliography
Dukcevich, Davide. Boeing, Airbus Fly Above
Cancellations. Forbes. 15 Aug. 2001. 11 Nov. 2002.
www.forbes.com/business
Pollcak, Jacob & Friedman, Robert. Aerospace and
Defense.S&P 500 31 Oct. 2002. 15 Nov. 2002
www.netadvantage.standardandpoors.com
Taylor III, Alex. Little Jets are Huge. Fortune. 4 Sept.
2000. 5 Nov. 2002. www.fortune.com/lists/F500
www.airbus.com
www.boeing.com
www.embraer.com
www.bombardier.com
Bibliography
Personal interview. Richard Wynne. The
Boeing Company. 13 Sept. 2002
Industry Surveys. Volume 1. A-D.
Standard & Poors. Selected data from
Aircraft Orders & Deliveries table.
Aerospace & Defense Industry Survey, pg.
3. July, 2001.
Bibliography
Industrial Manual. Volume 1. A-I. Mergent.
Balance Sheet and Income Statement from The
Boeing Co. and Bombardier Inc.. July, 2001.
Industrial Manual. Volume 1. A-I. Mergent.
Balance Sheet and Income Statement from The
Boeing Co. and Bombardier Inc.. July, 2000.
Industrial Manual. Volume 1. A-I. Mergent.
Balance Sheet and Income Statement from The
Boeing Co. and Bombardier Inc.. July, 1999.
Bibliography
Industrial Manual. Volume 1. A-I. Mergent.
Balance Sheet and Income Statement from The
Boeing Co. and Bombardier Inc.. July, 1998.
Industrial Manual. Volume 1. A-I. Moodys.
Balance Sheet and Income Statement from The
Boeing Co. and Bombardier Inc.. July, 1997.
Questions ???