The Boeing Company was found in 1916 by William Boeing in Seattle, Washington. It has its headquarters in Chicago, Illinois. The company designs manufactures and sells rockets, aircraft, satellites, missiles, and telecommunication equipment across the globe. It is also a defense contractor for the US government. It is the largest exporter by dollar value in the United States. In 2018, the company produced 806 commercial aircraft. It is one of the prime commercial aircraft sellers alongside with Airbus. The company has been listed in the Fortune 500, Fortune Global 500, and World’s Most Admired Companies list (Fortune, 2019). In 2018, the company recorded revenue of $101.127 billion and had more than 153,000 employees. Over the years, the company’s reputation has been impacted by various aircraft crashes.
Following are the four dimensions of the Ansoff Matrix for Boeing:
Market Penetration
This is the strategy to promote existing products in existing markets. The first strategy that Boeing adopts is to motivate its users to purchase more. The users are airlines across the globe. The company motivates them to purchase more of the aircraft models and other products they have already purchased based on their previous results or satisfaction. It also motivates them to try other models and products of the company. Since each purchase by a customer is in millions, each customer holds value and great potential for future sales. The company also penetrates the market by improving the aircraft and other products it offers after its initial launch. Strategic alliances are also created with various airlines, telecommunication companies, and other organizations to increase sales. The alliances allow it to sell its products under agreements with those companies. Boeing also provides after-sales services for these products. The company also motivates its buyers to purchase maintenance services from Boeing. All of these measures allow Boeing to further penetrate its markets.
Market Development
Under market development, Boeing launches its existing products in new markets. The first strategy in this regard is making sales to airlines in various regions of the world. In various markets, Boeing directly makes sales while other airlines purchase used aircraft from fellow airlines. Boeing attempts to make direct sales in these regions as well. The company also offers different product variants to meet the needs of different markets it wants to serve. For example, variation in the number of seats, technology functions, innovations, presence of classes inside the aircraft, and so on. Different product dimensions allow Boeing to capture new markets and new market segments inside existing markets. The variation in products also allows Boeing to work on different pricing policies for different markets. As a result, Boeing can increase sales and earn greater revenue.
Product Development
Product development is the strategy to offer new products in existing markets. Boeing does this by creating new models of aircraft, satellites, and other equipment it produces. The new models are more advanced, have greater efficiency, improved shapes, and offer various other benefits (Cheramakara, 2017). Boeing markets these new products to existing and earlier customers to gain their attention. Each new product goes through various steps in the product development process that includes testing and quality assurance as each product costs in millions of dollars. Extensive research and development go into each product before it is created and marketed for customers. Once successful tests are conducted, the company brings the new product to the market. The new models the company produces are offered across all industries at once. The products are only manufactured on order form airlines and other customers.
Diversification
Boeing has great potential when it comes to diversification. The company can vertically diversify in the forward direction by creating its own airline and using its aircraft. It can vertically diversify in the backward direction by manufacturing its own components that it currently procures from various suppliers. The company can also horizontally diversify into related industries such as private jets, military aircraft, fighter jets, and so on. It already has diversified into various industries but holds great potential. It can also become a conglomerate by establishing units in various other industries such as consumer electronics, heavy machinery, automobiles, chemicals, and so on. All of these ventures will only work to increase company revenue.
References
Cheramakara, N., 2017. Airline Marketing 6 airline product analysis. [Online] Available at: https://www.slideshare.net/DrNarudhCheramakara/airline-marketing-6-airline-product-analysis [Accessed 02 Jan. 2020].
Fortune, 2019. 19. [Online] Available at: https://fortune.com/worlds-most-admired-companies/boeing/ [Accessed 02 Jan. 2020].