Market Control: Boeing
Boeing is no doubt a market leader in the aircraft manufacturing industry with heavy presence in virtually all continents. This places Boeing in a better place in the market control due to its ability and potential to influence aircraft prices. Although market control for Boeing has not been that easy considering the stiff competition from competitors such as Airbus, mostly it is Boeing which evidently exerts a great deal of influence on the price of aircrafts. As a result, Boeing has been able to combine cutting edge technology with its market position to its advantage.
Although aircraft-manufacturing industry has considerably many players, few have a global presence and can significantly have an input in the market control. Boeing happens to be among the few players who influence prices. The fact that there are relatively more buyers of aircrafts than there are sellers especially of heavy and fighter airplanes means that the sellers can easily exert market control. Considering this imbalance between strength of buyers and the control of the manufacturers, Boeing has come up as a market power. The ability of Boeing in market control is not only evident in price control, but in innovation of new and modern products such as; custom made accommodation in the aircrafts especially targeting the business and tourist segment of market.
Evidence of market control of Boeing is seen in the positively sloped supply curve which has characterized the market prices for Boeing’s products in the past decade. Market control has had an effect on Boeing especially considering that, all of the functions of management such as planning; organizing, coordinating and controlling are pegged on market performance. Market control has seen profits for Boeing stabilize which means the management of Boeing can strategically plan for expansion programs and other programs with certainty.
With market control, it is easier to estimate sales volume with certainty, and therefore planning for staff needs becomes easy for Boeing as well as the organization of Boeing’s organizational structures. It becomes easier for the management of Boeing to control its internal processes as well as its external process due to its market control ability. Market control has made it possible for Boeing to source and maintain highly motivated staff due to the fact that Boeing has been able to maximize profits.
The market control especially on aircraft prices by Boeing portents the danger of pushing small competitors out of business. As a result of market control by Boeing, there lacks perfect control as Boeing together with a few other industry big players continue to drive small firms out of business and therefore denying the buyers the freedom of choice as well as the satisfaction that comes with the freedom of choice. Market control has resulted into a near monopoly situation in the aircraft manufacturing industry although in actual sense, Boeing’s environment is oligopoly.
Market control by Boeing has resulted into a situation whereby, due to lack of many potential substitutes, Boeing continues to exert influence in pricing, making its prices some of the most exorbitant in the market. On the other hand, market control has seen Boeing grow into a very profitable organization therefore creating benefits to the society by providing job opportunities as well as by engaging in sponsorship programs in the society.
As a result of the market control mechanism employed by Boeing, decision-making process has become easy, as delegation is possible. Market control mechanisms at Boeing has made it possible for the management at Boeing to execute its organizing, planning, coordinating and controlling functions easily as the market is friendly, less turbulent and predictable. Despite the sustained competition from Airbus, Boeing still commands market control and it should be able to regain some of the market share it has lost to Airbus in the past few years.
Reference
http://www.iht.com/articles/2005/01/13/aribus_ed3._.php Accessed on 8/4/2007.
www.tau.ac.il/~razin/Airbus%20versus%20Boeing%20revisited.doc Accessed on 8/4/2007.
