Careers at Boeing

Mission

Boeing’s mission statement is “Connect, Protect, Explore and Inspire the World through Aerospace Innovation”. It aims to do this by operating in a united manner, by building up its strengths, and by sharpening and accelerating its business strategies.

Business segments

Boeing is an American listed company that is one of the world’s largest aerospace firms. It has three major segments – Commercial Airplanes, Defence, Space & Security, and Boeing Capital.

Commercial Airplanes – This segment designs, develops, manufactures, and sells commercial aircraft. It also provides the related maintenance and other support services, including but not limited to aviation services support, and the provision of customized aircraft, spare parts, training, maintenance documents and technical advice. Boeing is one of the largest commercial aircraft producers in the world, and currently produces the 737, 747, 767, 777, and 787 models for commercial airlines around the world.

Defence, Space & Security – Defence, Space & Security is further split into 3 segments - Boeing Military Aircraft, Network & Space Systems, and Global Services & Support. This segment has, as its main customer, the US Department of Defence which contributes over 60% of its segment sales revenue. In addition, it also sells to other governments, private defence agencies, non-military commercial entities, and other bodies in the American government (e.g. NASA).

  • Boeing Military Aircraft – BMA designs, produces, and sells manned and unmanned aircraft and weapons systems for military applications. These include fighter and bomber aircraft, specialty aircraft (e.g. VTOL planes), surveillance and combat drones, transports and other systems. Some easily recognized and well-known projects include the F/A-18E/F Super Hornet, F-15 Strike Eagle, CH-47 Chinook, AH-64 Apache, and V-22 Osprey.
  • Network & Space Systems – NSS designs, produces, and sells bespoke solutions for electronics & information (e.g. military networks), strategic missile and defence systems (e.g. ground-based missile defence – for example the PAC-3 “Patriot” system), space and intelligence systems (e.g. commercial and military satellites), and space exploration (e.g. International Space Station related projects).
  • Global Services & Support – GSS provides support for Boeing’s services under this segment, including maintenance and engineering support, logistics and supply chain management, modification and upgrades, and training.

Boeing Capital – This segment manages, through the use of various financial instruments including leases, notes, other investments and other receivables, the financial risk of operations, and provides financing solutions for customers.

In addition to above, Boeing also pursues other revenue streams, including research and development projects for defence and other military systems, for space systems, and for other commercial or military applications.

History

Boeing was started in July 1916 by William E. Boeing. It was first named Pacific Aero Products, being renamed Boeing Airplane the next year, in 1917. Boeing sold its first production model, the Model C, to the US Navy when the US entered the First World War in 1917. It produced its first commercial aircraft, the B-1, in 1919 – this aircraft was designed to carry airmail across North America. This plane was succeeded by the purpose-built Boeing Model 40A, which helped Boeing win a US Post Office contract to deliver mail across the country.

This prompted Boeing to incorporate a new entity. Boeing Air Transport, for its growing airmail business. Boeing Air Transport is the predecessor of United Airlines. At that time, Douglas, predecessor to McDonnell Douglas which merged with Boeing in 1997, had built the first aircraft that turned a profit on carrying passengers (as opposed to cargo). This revolutionized the airline industry and Douglas planes carried over 90% of American air passengers by the late 1930s.

Over the next decade, Boeing worked closely with the US military to develop military aircraft. This relationship was buttressed by the advent of the Second World War. Boeing developed and produced a number of iconic aircraft in the war; these included the B-17 “Flying Fortress”, the aircraft credited by General Carl Spaatz, US air commander in Europe, with winning the war for the Allied Forces, the P-51 “Mustang”, and the B-29 “Superfortress”.

Boeing continued its close relationship with the US government throughout the Cold War, where it produced modern aircraft, such as the B-47 and the F-86 “Sabre”, that vastly outperformed Soviet-made counterparts. Of note is the B-52 “Stratofortress”, which was designed in 1954 but continues to be relevant even today. Boeing also made progress in the commercial aviation industry, with the Boeing 707 leading the expansion of the air travel industry which, in the 1950s, exceeded other forms of long-distance transport for the first time.

Boeing also expanded into space in the 1950s and 1960s, with the space race with the USSR accelerating developments in the industry. The famous Apollo series of missions were powered by Boeing-made engines.

Over the next few decades, Boeing advanced further in both military and commercial operations. Notable developments include the 747 jet, then the largest passenger carrying aircraft in the world, the F-15 “Strike Eagle” fighter, and the AH-54 “Apache” helicopter – all of which are still in use today.

Business model of Boeing

Customer Segments

Boeing’s key customer segments vary according to its business segments.

Commercial Airplanes – This segment mainly serves the commercial airline industry.

Defence, Space & Security – This segment serves, as its primary customer, governments. Its biggest purchaser is the US Department of Defence, which contributes over 60% of segment revenue. It also serves other governments around the world, either through direct contracting or through US bilateral military sales.

The non-military offerings of this segment also serve other customers. One primary purchaser is NASA, which orders space-related equipment and services – such as satellites, launch vehicles, and launch engines. Other foreign government bodies serving in roles similar to that of NASA are also key customers.

Aside from governmental bodies, this segment also serves commercial entities. One group of entities are private defence agencies, who also require access, albeit restricted, to military equipment. Non-military commercial entities are also key customers, particularly for support services, and for space-related products – especially civil and commercial satellites and satellite systems (e.g. the Global Positioning System).

Boeing Capital – As this segment serves pre-existing customers of other segments, it does not serve any unique customer segment. It is to be noted however that different customers have different risk profiles – for example, the US government presents a far lower risk profile and a far stronger financial position as compared to most, if not all, commercial entities – this means that Boeing Capital may, in practice, serve only particular segments of Boeing’s customers.

Aside from the above segments, Boeing also works closely with governments on research and development projects.

Value Proposition

In an increasingly crowded market, Boeing’s multi-faceted value proposition has helped it stay afloat. One of its biggest draws is that it is a well-known, established, and trusted brand that has worked closely with key customers, particularly the US government, for more than a century.

Further, Boeing is known for producing quality, often bespoke, equipment – at high cost however. This equipment often uses proprietary technologies that are only available from Boeing, thus restricting customers to purchasing from the company.

In addition, given Boeing’s substantial experience and expertise in its areas of operation, its products tend to be of a higher utility as compared to its competitors.

Finally, Boeing offers integrated solutions for its customers – from the equipment itself, support services, financing, and even networked infrastructure. These solutions offer potentially lower overall costs and greater value to customers.

Channels

Boeing contracts directly with its key customer, the US government, either through recurring contracts or through open/closed bids, tenders, and proposals. It also contracts directly with foreign governments to sell military and commercial equipment. It contracts indirectly with foreign governments through US government bilateral sales of military or other equipment or services.

It contracts directly with commercial entities, including commercial airlines and others.

Customer Relationships

Boeing relies heavily on its pre-existing relationships with its customers – some of whom have been with the company for over a century.

In addition to this, Boeing continues its relationships with its existing customers through the provision of support services – ensuring customer satisfaction while keeping Boeing relevant.

Key Activities

Boeing designs, produces, and sells commercial and military aircraft, military systems, space systems, and other integrated solutions for civil, commercial, and military applications.

Key Partners

Key partners include both domestic and foreign government agencies, particularly the US Department of Defence and NASA, which often have specific and exacting requirements for equipment. One example is the partnership with NASA’s Commercial Crew Program to develop and refine Boeing’s CST-100 “Starliner” system to carry crew and cargo into orbit.

Other partnerships include with suppliers and manufacturers. Boeing also partners with other companies, some of which may be its competitors, on major projects such as the International Space Station.

Key Resources

Boeing’s key resources are its Property, plant and equipment, and it’s Goodwill. Aside from financial resources, its engineering and business talent are also key resources.

Cost Structure

Boeing’s key cost is the cost of production for its equipment and its services. Other key costs include research and development and general and administrative expenses.

Revenue Streams

Boeing derives its revenue streams from its three business segments – Commercial Airplanes, Defence, Space & Security, and Boeing Capital.

Source of Revenue/Cost Revenue (FY 2015, million USD) % of Total Revenue
Total Revenues 96,114 100%

Commercial Airplanes

66,048 69%

Defense, Space & Security

30,388 32%

Boeing Capital

413 0%

Other

-735 -1%
Total Costs -88,671 -92%

Cost of products

-73,446 -76%

Cost of services

-8,578 -9%

Boeing Capital interest expense

-64 0%

General and administrative expense

-3,525 -4%

Research and development expense, net

-3,331 -3%

Other

273 0%
Operational Income 7,443 8%