Intrinsic Value of Boeing Company Research Paper

Intrinsic Value of Boeing Company - Research Paper Example It is the chief leader in innovation and aerospace products and services. The demands of the customers made the company continue to expand its products and services such as development, design, support, sales and manufacture of commercial jetliners, satellites, military aircraft, missile defense, launch systems and services and human space flight (Intrinsic Value of Boeing Company, 2010). The company expanded to include in their services the creation of new and more proficient commercial airplanes. They included to integrate military platforms and defense systems and create advanced technology resolutions (Boeing in Brief, 2011). The company operates in Chicago with more than 165,000 employees across the United States and other countries (Boeing in Brief, 2011). Most of their employees are college degree holders, with those advanced degrees in technical and business fields thus making the company one of the most diverse in terms of talent and capabilities word wide. Boeing has been categorized into two business units namely, Boeing Commercial Airplanes and Boeing Defense, Space and Security (Boeing in Brief, 2011). Boeing Capital Corporation provides for the financial solutions of the two business units (Boeing in Brief, 2011). ... The direct competitors of Boeing are the following companies: European Aeronautic Defense and Space Company, Lockheed Martin Corporation and Northrop Grumman Corporation. Lockheed Martin Corporation or LMT has a market capital of 24.40B, while Northrop Grumman Corporation has 15.28B (Direct Competitor Comparison, n.d.). Boeing and ABC Activity-Based Costing or ABC is a â€Å"method of attributing costs to products based on first assigning costs of resources to activities and then costs of activities to products† (Activity-Based Costing and Quality Management, n.d., p. 453). This method is one of the foremost developments in product costing. As stated in Chapter 8 of Activity-Based Costing and Quality Management, this method is considered as more accurate but requires more time and expense. A research study was conducted to Boeing Commercial Airplane Group (BCAG) in Wichita Division in 1999 to 2000. Paduano, Harris, and Gershenfeld (2000) believed that the Activity-Based Costin g method is worth the study due to its great interest on Boeing’s lean practices involving cost of production and services. With this study, the researchers wanted to find out the effects of using the ABC method and its benefit to the company bearing in mind that ABC management will lead to a more accurate allocation of company’s charges and improvement on costs. According to Paduano, Harris, and Gershenfeld (2000), motivation for the application of ABC rooted from the fact that the method recognizes the true costs which will help the leaders or managers in decision making such as in manufacturing. This method also helps the managers truly understand that in making their critical choices, they