Tiffany Chau Chantz Fleck Petra Vadelova
Sara Walde James Williams
12:30 12:35 12:50 1:05 1:10 1:15
Boeing+ Airbus:An overview
Russia:Situation analysis
Statement of Opportunity
AlternativesFinal recommendation
Question+ Answers
The largest aerospace company in the world
75%
8% more efficient (20% less fuel)
50% composite materials
Advanced monitoring
Over 159,000 employees worldwide
RUSSIA
Democracy Market economy Middle class
0
17.5
35
52.5
70
Power distance Uncertainty avoidance Invdividualism Masuclinity
The largest pool of scientists and engineers in the world
Labour market
Social unrest Corruption
Foreign firm policies
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$2.1 trillion USDGross Domestic Product (ppp)
TiTitanium47.867
22 28
102
Light weight
High strength
Heat resistant
Load / crack resistant
Non-corrosive
Ural Boeing Manufacturing
World’s largest titanium producer
World’s largest aerospace company
TITANIUM VALLEY
Beautifulness may vary
“To utilize Russia’s rich natural and labour resources, through Boeing’s existing connections, towards creating an efficient engine component
production facility in Russia.”
Statement of Opportunity
Alternatives for consideration
Contract manufacturing
Joint-venture
Strategic alliance
ContractManufacturingBoeing takes advantage of Russia’s natural and labour resources by contracting a Russian firm to produce the
engine component of their 787 Dreamliner
Advantages Disadvantages
‣Reduced labour costs, raw material and overhead costs‣Potential improve cash flows‣Shorter operating cycle
‣ Internal unrest‣Supplier unreliability‣ Increasing host country competition‣Reliance on presence of a willing and
capable engine manufacturer
JointVentureBoeing further develops its Russian relationships in
establishing a formal joint venture in the production of 787 Dreamliner engine components
Advantages Disadvantages
‣Creation of a Russian separate entity‣Allows Boeing to focus on those
areas in which it has a competitive advantage‣Protection of intellectual property‣Tax advantages‣ Improved Russian relations
‣Not focused on long-term goals‣High start-up costs‣Potential inter-firm conflicts due to
misaligned goals‣Subject to intense bureaucracy
StrategicAlliance
Advantages Disadvantages
‣Boeing has the ability to produce titanium far more economically‣Reduced costs‣ Increased efficiency‣Allows each company to focus on
their own strengths: competitive advantage
‣Potential for future misalignment of goals and motives
Boeing expands their relationship with Rolls Royce, using it’s existing joint venture with VSMPO-avisma to
manufacture titanium engine components
Strategic alliance
Existing joint-venture
World’s largest producer of Titanium
Largest pool of scientists and engineers in the world
Increasingly open attitude towards foreign investment
Enhanced relationship and identity with Russian nationalism
“What we haven’t been doing in Russia is manufacturing, engineering, supply chain and
R&D and that is the area that I think we are interested in exploring. A development of new
technologies for gas turbines; new forms of engines.”
—Michael Shipster, International Director
“The world is ready for some new development”