Hughes Aircraft Case Study

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Hughes Aircraft Case Study Introduction

SWOT analysis assist organisation in identifying various aspects of an organisation such as strengths and weaknesses. Moreover, SWOT analysis also assists in identifying opportunities of an organisation along with its threats. Therefore, it can be said that SWOT analysis assesses the internal aspects of an organisation. On the other hand, PESTLE analysis focuses on identifying the external aspects of the company by assessing the macro environmental factors such as political aspects, technical aspects along with many other aspects. This study focuses on the case study of Hughes Aircraft along with conducting a SWOT analysis and PESTLE analysis on the company.

Information related to Hughes Aircraft

Company Name

Hughes Aircraft Company

Type of industry

Aerospace and Defence

Headquarters

Westchester, California, United States

Sales/Revenue

 5.3 million dollars

Area served

Glendale, Westchester and Fullerton

Number of stores

4

Competition

Raytheon Corporation, Thompson-Ramo-Wooldridge and many others

USP

To provide cutting edge aerospace and defence technology with premium quality

Target Group

Defence military personnel and airline personnel

Products

Swiss Air Defence System - FLORIDA, Hughes D-2, Hughes H-1 and many others

Website

https://www.hugheshistoricdistrict.com/

Table 1: Detail of Hughes Aircraft

(Source: As per the case study of Hughes Aircraft)

Hughes Aircraft SWOT Analysis

Strength

  • Large market share
  • Innovative products
  • Premium product quality
  • Enhanced security features
  • Strong financial performance
  • Implementation of advanced technologies for the development of the product
  • Wide arsenal of products ranging from Air Defence System to aircrafts
  • Strong research and development team
  • Focus on expanding the range of products

Weaknesses

  • Weak operational performance with respect to defence system
  • Increased issue with the labour
  • Lack of investment in changing technologies
  • Inefficient marketing of products
  • Inefficient financial planning
  • Higher dependency on the contracts from US governments
  • Higher supplier power

Opportunity

  • Increase in the demand for commercial planes
  • Growing market for aerospace and defence market
  • Lower transportation cost

Threats

  • Intense competitions
  • Dependency on political policies of US
  • Constant change in the technologies

Table 2: SWOT Analysis

(Source: Created by Author)

Hughes Aircraft Analysis

Hughes Aircraft company used to deal in the aerospace and defence system and was founded in 1932. Furthermore, as per the case study of Hughes Aircraft Company, it has been observed that the company had around 84,000 employees working for the company and ceased its operations in 1997. Moreover, the company was able to generate around 5.3 million dollars as its net earnings within a small period of time (Hugheshistoricdistrict.com, 2019). Furthermore, as per the case study of Hughes Aircraft Company, it has been observed that the company merged with general motors’ in order to sustain itself after the death of Howard Hughes. The company had various strengths due to which the company was able to secure many government defence projects along with some private projects. As per the views of Engler et al. (2015), quality of the products influences the loyalty of the customers. Therefore, the company focussed on providing better quality equipment to its clients. The company focussed on investing in research and development of new technologies in order to increase the efficiency of the products and devices developed by the company.

Moreover, as per the case study of Hughes Aircraft Company, it has been observed that the company had a wide variety of products in its arsenal which assisted in gaining an advantageous position in the competitive market. However, the company had weak operational capabilities due to which the company lost its grip over various defence related projects. Moreover, the company lost its two members, Ramo and Wooldridge, who became the competitors for the company. In 1953, Ramo and Wooldridge created their own defence and aerospace industries which were able to rival the company created by Howard Hughes. However, the company still had opportunities to increase their financial performance by developing commercials flights and enhance their technologies in order to grab more defence contracts. Lastly, it can be said that the threats related to the company was mainly due to their dependency on the policies and contracts of US governments.

Hughes Aircraft PESTLE Analysis

Political

  • Stable political environment for the aerospace and defense industries
  • Limited risks of military invasions
  • Higher level of corruptions
  • Uncertain political environment with respect to global politics
  • Employee benefits
  • Industrial regulations of the aerospace and defense sector

Economic

  • Strong GDP growth of USA during the period of 1955 to 1957
  • The GDP of the USA around 1955 was approximately 7% (Data.worldbank.org, 2019)
  • The inflation rate of the USA was approximately 1.46% during 1960 (Inflation.eu, 2019)
  • Affordable labour wage
  • Economic growth
  • The unemployment rate during the period of the 1950's was around 4.9% (Datahub.io, 2019)

Social

  • Increase in flight demands
  • Better education opportunities
  • Better development of the society

Technological

  • Implementation of modern technologies for developing commercial planes
  • Advanced research leading to enhanced efficiency of products and devices

Legal

  • Compliance of rules and regulations for industries
  • Better framework related to supply chain

Environmental

  • Initiatives to reduce carbon footprints
  • Initiatives to minimise waste

Table 3: PESTLE Analysis

(Source: Created by Author)

Analysis

Hughes Aircraft Company is an American aerospace and defence contractor operating from California, United States. Moreover, the company had an annual income of around 5.3 million dollars (Hugheshistoricdistrict.com, 2019). As per the case study of Hughes Aircraft Company, it has been observed that the company enjoyed a stable political environment along with complying with the regulations related to the aerospace and defence sector. Furthermore, the risk of military invasion assisted the company to grab several defence contracts along with establishing brand recognition. Furthermore, as per the case study of Hughes Aircraft Company, it has been observed that the company faced several difficulties due to unstable global political environment resulting in losses in their businesses. Furthermore, according to the words of Neuenkirch and Neumeier (2015), strong GDP assists in better development of organisations as well as the country. Therefore, it can be said that the strong GDP rate assisted the company in sustaining in the competitive environment.

Moreover, the GDP of the USA in the 1960's were around 7% which assisted in the development of the country (Data.worldbank.org, 2019). As per the case study of Hughes Aircraft Company, it has been observed that the lower wage assisted in an increase in the production of the company. Furthermore, the increase in the demand of commercial planes assisted in enhancing the financial performance of the company. Moreover, as per the case study of Hughes Aircraft Company, it has been observed that the implementation of modern technology has enhanced the efficiency of the organisation along with strengthening the security system of the devices. Additionally, it can be said that the company conducts its business by complying with the rules and regulations set by the government. Moreover, as per the case study of Hughes Aircraft Company, it has been observed that the company focuses on reducing the carbon footprints of its products in order to create a sustainable environment.

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Reference List

Data.worldbank.org, (2019), Data, Available at: https://data.worldbank.org/country/united-states?view=chart, [Accessed on: 24th August 2019]

Datahub.io, (2019), US Employment and Unemployment rates since 1940, Available at: https://datahub.io/core/employment-us, [Accessed on: 24th August 2019]

Engler, T.H., Winter, P. and Schulz, M., (2015). Understanding online product ratings: A customer satisfaction model. Journal of Retailing and Consumer Services, 27(9), pp.113-120.

Hugheshistoricdistrict.com, (2019), THE BEGINNING OF HUGHES AIRCRAFT COMPANY, Available at: https://www.hugheshistoricdistrict.com/hughes-aircraft-company/, [Accessed on: 24th August 2019]

Inflation.eu, (2019), Data, Available at: https://www.inflation.eu/inflation-rates/united-states/historic-inflation/cpi-inflation-united-states-1960.aspx, [Accessed on: 24th August 2019]

Neuenkirch, M. and Neumeier, F., (2015). The impact of UN and US economic sanctions on GDP growth. European Journal of Political Economy, 40(47), pp.110-125.

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