Global Trade issues of Boeing Essay Example | Topics and Well Written Essays - 1000 words

Global Trade issues of Boeing - Essay Example In fact, the company’s stock is part of Dow Jones Industrial Average. Absolute and Comparative Advantage A company is said to have an absolute advantage when it is capable of producing a specific good or service at a lower cost per unit compared to other companies in the same industry (Newquist 2010). It also pertains to the ability to produce a good or service more efficiently than other companies in the same industry. On the other hand, a company is said to have a comparative advantage when it has the ability to produce a particular product more efficiently than any other product (Newquist 2010). As earlier stated, Boeing is currently the leading exporter and manufacturer of airplane in the U.S. This is attributed to the absolute advantage it has acquired through the idea of the economy of scope. Report indicates that Boeing is the only aircraft manufacturer that has implemented the economy of scope making it possible for Boeing to produce two different products in two diffe rent markets at a relatively lower cost than two different firms do (White 2010). This has given Boeing an absolute advantage over other firms in the same industry. This is evident from the fact that Boeing manufactures both commercial and military aircrafts that sell in different markets (Rankin 2008, p.6). According to Benkard (2000, p.1035), all the competitors of Boeing competitor do not use this idea. Boeing also has a comparative advantage in its manufacturing processes. The company is regarded as the best manufacturer of military and commercial aircrafts in the U.S. The company has demonstrated these through quality airplanes it has manufactured for many years now (Benkard 2000, p.1035). Restrictions of trade Newquist (2010) reveals that Boeing is among the leading exporters of commercial and military aircrafts. Despite having enjoyed free trade with many countries that the U.S. trades with, the company has also faced a myriad of trade challenges. One such was witnessed when China imposed trade restriction on Taiwan, which placed Boeing at an awkward position (Bloomberg 2010). It is reported that China forced Boeing to comply by its trade restrictions or risk losing its U.S. arms contract in case it went ahead to sell its military arms to Taiwan that was then at a political dispute with China. China also went ahead to threaten Boeing of cancelation of its lucrative contract and expulsion out of China in case of noncompliance with trade restrictions imposed on it (Naele 2009, p.44). Marketing Marketing of Boeing products is normally done through segmentation. However, since traffic and economic growth rates vary from one region to another, Boeing segments its market geographically. For example, Boeing has focused most of its marketing efforts in Europe and North America regions because of their mature economies. As such, Boeing believes that these regions have a great potential of continuing to buy most of its airplanes (Golich 1992, p.899). In fact, the ability of the company to segment its market geographically gives it the opportunity to ascertain the demand of each segment. For example, Boeing can easily forecast the demand of Europe and North America due to their mature economies. This is due to the high number of air travelers in these regions (Golich 1992, p.899). Strategic Issues Boeing operation and reputation was recently affected due to what can be described as a strategic problem. The company has continually delayed the delivery of Boeing