hec school of management boeing france case study « best in france » may 12, 2009 santiago di ciÓ...
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HEC School of Management
Boeing FranceCase study « BEST IN FRANCE »
May 12, 2009
Santiago DI CIÓFrancisco Juan GRAMISU
Sungho JEON
HEC School of Management
Brief introduction to Boeing
FASTEN YOUR SEATBELTS AND ENJOY THE FLIGHT!
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It’s business
1. Boeing Commercial Airplanes2. Boeing Integrated Defense Systems3. Boeing Capital Corporation4. Shared Services Group
• Boeing first product came to France in 1955, when Air France became the first airline outside the US to fly the Boeing 707
• Boeing France, as a permanent presence, dates from 2002
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Key Benefit Numbers
• Revenues in Europe were of 6B in 2008
• Commercial Airplanes segment revenues were approximately 70% of total revenues in Europe in 2008
• Only 4% of operating assets are located outside the US
• Market Share (2007)*
- By units: 57%- By value: 63%
*Figures published by AVITAS, the leading advisor to the aviation industry.
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Key Benefit Numbers
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Why did Boeing come to France?
DESTINATION:
PARIS
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The Creation of Boeing International
• Boeing International created in 2002 by Phil M. Condit, former CEO
• Objective: to create permanent presence in key markets– Europe: France, UK, Spain, Germany, Italy, Northern Europe and
Eastern Europe– Asia: China, Japan, Australia, South Korea and South East Asia– Middle East: Israel and Turkey
• Markets selected based on:– Business Potential– Maturity of the local Air & Space industry
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The Role of Boeing France
• “…building and strengthening relationships with key stakeholders, including aerospace industry leaders, government and military officials”
• To form and take advantage of Business Opportunities
• To create relationships with potential local partners
• To give a visible presence to the Boeing Company in France
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Boeing‘s Clients in France
• Their expectations are: – Sales: low bidding price compared with competitors– MRO service: fast & direct service from national branch– Alliance with Boeing: for technology relationship (e.g. alliance with Air
France)– Good product and service– Good relationship with airplane manufacturer
French Companies
Air France (72)Corsair (9)
Europe Airpost (14)Blue Line (2)
French Goverment
The french armyMinistry of Defense - Air ForceKC 175 Tankers (14 of them)AWACS
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French presence
• A French presence helps Boeing in:
- Support the Business Objective of the Boeing Company- Look at the local capabilities from an industrial standpoint- Fast service to the clients (e.g. MRO)- It makes Boeing more competitive in sales (specially, vs. Airbus)
• Having a French Branch does not hurts the Boeing company in any way
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Direct production in France?
• Historical reasons: They have always produced inside the US. Main plant in Seattle, WA
• Partner’s Previous Experiences:McDonnell Douglas in China. Government cancelled project creating lack of confidence
• Strategic reasons: Joint Venture model – “Best of Industry Approach”. Boeing 787 model
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Indirect production in France?
• Since 1974, when GE and Snecma (now Safran) made a joint company called CFMI to make aerospace engines, Boeing relies on French suppliers.
• Nowadays, more than 100 French companies serve as providers to Boeing, where the most relevant are CFMI, Thalès, Dassault Systèmes, Michelin.
• France offer a competitive advantage not only with the quality of its enterprises but also because: “the infrastructure is wonderful in terms of roads and trains, it’s very important when you travel to visit suppliers”
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Constraints in France
A LITTLE BIT OF TURBULENCE…
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Constraints in France
• Politics:Relations strained between the French and U.S. governments because of disagreements over the Iraq conflict in 2004
• Government Sponsored Competitors:Airbus: In France and in Europe, a national industry and symbol.European Aeronautic Defense and Space Company (EADS)
• Country Values: "France is still a country where there is a strong nationalism“ (Yves Galland, Boeing France President)
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Adaptation to France
CROSSING THE ATLANTIC
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Boeing´s Culture and Values
• A very “American Company”. American values and culture
• “The American Way” is an easy way
• Big focus on OPENNESS and ETHICS:
- French Corporate Culture
- Transparency and Openness: not always easy to implement
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Transition towards Flexibility
• (2002) Follow “the voice of America”
• Not possible to replicate 100% what it’s being done in the US
• Some departments and issues started to be managed locally (either at country or regional level): HR, Ethic related issues
• Boeing International’s head is a member of the Board: interaction at the same level
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Interaction between Boeing France and HQ
• Sales Campaign:US DRIVEN. “They know what they are doing, they’ve been selling their planes for years… so they are taking the lead.”
• Leveraging the company’s presence in France: LOCALLY DRIVEN.
• “It’s a simple and easy system, and works very well that way” (Jean Marc Fron, Strategy Director Boeing)
• There are still some things to improve…
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Essential Advise
HOW TO LAND SAFELY IN FRANCE
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Essential Advise
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We Thank
• Jean Marc FronDeputy, Strategy DirectorBoeing [email protected]
• Fatima [email protected]
• Caroline [email protected]
• Michael Segalla, [email protected] School of Management, Paris
Boeing France
75, rue du Faubourg Saint-Honoré75008, Paris. Phone. 01 70 37 07 47
HEC Paris
1 Rue de la Liberation78351, Jouy-en-Josas, France
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Bibliography
• www.boeing.fr
• www.boeing.comThe Boeing Company 2008 Annual Report
• www.airfrance.frAir France – KLM Annual Report 07-08
• www.avitas.comAVITAS
• Boeing Frontiers Online Magazine“Boeing France president working on EADS and Airbus home turf”
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Our Team
• Santiago Di Ció1 Rue de la Liberation B2 211Juncal 945, 2º (1062)Buenos Aires, Argentina
• Francisco Juan Gramisu1 Rue de la Liberation B2 125Callao 1330, 1B (1023)Buenos Aires, Argentina
• Sungho Jeon1 Rue de la Liberation BI 043Da-203, Il-Sung Ju-taek, 963-8, Hogye 1-dong, Dongan-gu, Anyang-si, Gyeonggi-do, Korea. (431-081)
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Thank you very much for your time and attention
Q&A
WE HOPE YOU ENJOYED THE FLIGHT!