Boeing in Russia
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Transcript of Boeing in Russia
![Page 1: Boeing in Russia](https://reader033.fdocuments.us/reader033/viewer/2022051110/54bdf6c44a795946588b464e/html5/thumbnails/1.jpg)
Tiffany Chau Chantz Fleck Petra Vadelova
Sara Walde James Williams
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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
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The largest aerospace company in the world
75%
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8% more efficient (20% less fuel)
50% composite materials
Advanced monitoring
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Over 159,000 employees worldwide
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RUSSIA
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Democracy Market economy Middle class
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0
17.5
35
52.5
70
Power distance Uncertainty avoidance Invdividualism Masuclinity
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The largest pool of scientists and engineers in the world
Labour market
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Social unrest Corruption
Foreign firm policies
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qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq
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$2.1 trillion USDGross Domestic Product (ppp)
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TiTitanium47.867
22 28
102
Light weight
High strength
Heat resistant
Load / crack resistant
Non-corrosive
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Ural Boeing Manufacturing
World’s largest titanium producer
World’s largest aerospace company
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TITANIUM VALLEY
Beautifulness may vary
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“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
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Alternatives for consideration
Contract manufacturing
Joint-venture
Strategic alliance
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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
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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
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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
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Strategic alliance
Existing joint-venture
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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
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“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
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“The world is ready for some new development”