Boeing

1
Boeing

• Factors prompting strategic change
• Gap between desired performance and actual
  performance
• Net loss in 1997, worst financial performance in
  fifty years, share lose 1/3 of their value
• Internal issues Neglect of commercial aircraft
  business, lost emphasis on differentiation (focus
  on costs), Inefficiencies of production system
• Environmental issues Severe competition from
  Airbus, Asian economic slump reduced demand

2
Boeing

• Turnaround strategy
• Change in leadership
• Cost cutting
• Reorganization for accountability and to track
  costs
• Obstacles to change
• Corporate structure (changing structure is easy,
  but changing mindset is difficult)
• Traditional corporate culture
• Functional level, emphasis on cost reduction
  versus product development
• Individual level- fear of layoffs (compounded by
  union strength)