Risk and Return of Boeing Company Research Assignment (Term Paper Sample)

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Risk and return of Boeing Company
The Boeing, being a multimillion company would be considered to be immune to major risks and well placed to major returns from any of its undertakings. However, this may not be the case in reality as it faces several strategic risks just as other r smaller companies. In this regard, the company must be able to take in-depth calculations I order to avoid most of the risks and maximize returns both in the short and in the long run in any undertaking (Antoniak, 45). With regard to the market structures and dynamics there-in, the company must take note of strategic investment plans that would end up keeping them ahead of their competitors and minimizes risks involved.
Taking a theoretical review of the risks and returns associated with the operations that the Boeng Company indulges in, there is a possibility of understanding the reasons behind being decision of investing in smaller aircrafts and maintains its dominance in the market instead of working with the larger airplanes like the Airbus A380. Taking an analytical view of such strategic decisions would help in the full understanding of the returns made by the company as well as the risks associated with such initiatives.
Making investments in smaller aircrafts increases the company’s dominance to a great extent (Aswath, 162). With the easy acquisition of the smaller aircrafts especially by individual people and private businesses helps the company makes increased total sale of its aircrafts within the vast market and captures the unmet demands. With reduced demand by the smaller aircrafts, the company is able to offer better and more regular services to its customers hence becoming more reliable to many of the users of these planes. The smaller aircrafts are on higher demand as compared to the bigger airliners. In this sense, the company is able to deliver increased number of planes each year and make increased returns as compared to a single focus on the sales of the bigger aircrafts that are not highly demanded (Antoniak, 57). The demand of smaller service planes that are used for short distance travel either by individuals or private companies have always seen attracted more demand and this is provides a sales advantage to the companies that produces the smaller aircrafts.
Maintenance of a single airbus A380 would be quite un-economical and would cause major loses to the company in case of a demand for warranty of either some parts or the entire plane in cases of malfunctions. Such maintenance cost would even be worse if the company explicitly specializes in the production of such big planes. Focus on the smaller planes would be more economical when it comes to issuance of warranties a...