Introduction
Lockheed Martin is one of the largest security, aerospace, military support, and technology companies. The corporation was formed by merging Lockheed Corporation and Martin Marietta in 1995. The headquarters are in North Bethesda, Washington D.C. The company employs over 115000 employees, including scientists and engineers. The company operated in four segments: Aeronautics, Rotation and Mission Systems, Space and Missile, and Fire Control. The case presented provides an overview of the organization and analyzes the company’s competitive market, financial data, performance, ethics, and the challenges that affect Lockheed Martin.
Case Personnel and their Roles in the Case/Company
The roles of the case personnel are to carry out an effective, equitable, and client-centered case analysis of the company. The personnel has adequately researched the company’s information and offered its overview. Consequently, they provide a review of the company and explain every significant aspect of the company. The clients are assisted in achieving the company’s details, wellness, and autonomy.
SWOT Analysis
The SWOT analysis of Lockheed Martin is essential for describing the company’s strengths and weaknesses, which are the internal factors that affect it, and opportunities and threats which are the external factors. The strengths of Lockheed include that it has a strong backup from the U.S. government, where 85% of its income is achieved from government contracts (Cantone & Mehta, 2020). The company offers services across its four sectors, including ballistic missiles, spacecraft, aircraft, Atlas launch vehicles, munitions ATC systems, radar, and satellites. The customer base is small but stable, and the cooperation has also acquired many awards making it well recognized. The firm operates in an oligopolistic environment.
Lockheed has several weaknesses that affect the growth of the company. The firm highly depends on the U.S. government for projects and revenue. The organization needs to raise cash flow as contenders are lowering that day’s inventory to maintain resources into a channel that significantly affects the drawn-out development (Hitt et al., 2019). Lockheed suffers from low effectiveness and faces challenges in a combination of firms with differentiated working societies. The firm requires a greater interest in innovation and hence has to invest more in innovative technologies. Additionally, the company lacks development and research relevant to contend with the main players in the industry.
Opportunities for the company involve the rise in demand for Defense due to the surge of terrorism cases. All countries are interested in the modernization of Defense hence an increase in demand in the future. The company will benefit from taking new ventures in the new business sectors provided by the government’s arrangements. New markets have been opened by recent fads in buying conduct, allowing the firm to gain additional income and enhance new classes of items. Consequently, lower transport cost has significantly reduced transport expenses, cutting Lockheed’s cost.
The organization faces threats as the products they produce are seasonal, which reduces productivity during the low seasons. The high cost of raw materials, such as crude materials, threatens the organization (Wiegand, 2018). The changing money value is also a threat when the organization operates in different nations and has unpredictable political environments. Finally, legal factors affect the firm in cases obligational laws are unique for each country, and Lockheed might present issues of posing risks.
Competitors
The function of the organization is to supply products all over the world and offer them to May large competitors it needs to face from different countries. Direct competitors of Lockheed Martins are Boeing, General Dynamics, BAE Systems, Almaz-Antey, Northrop Grumman Corporation, and Raytheon (Wiegand, 2018). The indirect competitors of the organization include Embraer, Saab Group, Jagdflugzeug GmbH, Eurofighter, and Leonardo.
Main Customers and Buying Criteria
Lockheed Martin is responsible for serving domestic and international customers with its products. The main customer of the organization is the agencies of the U.S. government, which includes the U.S. Department of Defense and federal government agencies. The customers buying criteria are assessment where the strengths and vulnerability are gauged, strategizing, preparation, and engagement.
Problems Presented in the Case
The budget uncertainty poses a relevant challenge to the organization on the growth and investment in the business. The first challenge is a decline in the federal government’s budget, which is expected to affect the operations of the company and the need for defense spending (Hitt et al., 2019). The federal government is the major customer of Lockheed; hence reduction of its budget for the purchase would affect the company’s market. The second problem presented in the case is the risk from the international market. The International market is highly unpredictable and can potentially have higher volatility in the political environment and foreign economics.
The third challenge is related to the regulation that is put in place by the defense market. The U.S. government makes the customer base limited by imposing constraints. International Traffic in Arms Regulations is responsible for giving these restrictions. Restriction minimizes the sales for the company. The fourth problem that affects Lockheed Martin is the failure to control costs. The company provides unique products but fails to maintain a favorable cost, especially for the F-35. The versatile demand for F-35 has carried high cost hence the struggle to provide the required features at an affordable cost (Wiegand, 2018). The problem has resulted in some countries threatening to reduce or cancel contracts unless Lockheed meets the milestone needed.
Solutions to the Problems
The challenge of the change of budget by the government on the purchase of products shows that the company depends on the government. The company should opt for economic diversification to help maximize its market. Decentralization can ensure the target market is not always the government on a large percentage and attract other customers. The company can maximize sales internationally and target to reach more markets.
The second challenge is related to the risks of international markets. To avoid penalties and restrictions, the company should be up to date with the restriction policies they supply the nation and follow them always. The company should meet the specified regulations and requirements to deal with the problem of regulations in the defense market. On the fourth problem related to controlling cost, especially for the F-35 program, Lockheed should consider using EELs to allow the government to track the lifespan and usage of major E-35 parts, which will provide the asset in making smarter and more cost-effective buying and, maintenance practices (Wiegand, 2018). The company should ensure parts are delivered with accurate electronic logs.
One specific problem chosen to be solved is the issue of regulations the regulation in the defense market. The final solution to this problem is keeping up with regulatory changes imposed each time to avoid loss of revenue. To implement this solution, the company should plan its actions necessary to gain insight into the regulations in the defense market, keep up-to-date information and address the changes as they come to avoid consequences.
Conclusion
In conclusion, Lockheed Martin is an aerospace, military support, and technology company. The case analysis offers information on the company and explains significant aspects of the company. The company’s SWOT analysis assesses its strengths, weaknesses, opportunities and threats that affect its success. Lockheed has both direct and indirect competitors in the industry, and the company’s main customer is the U.S. government. The analysis of the problems presented in the case assists in coming up with solutions and implementing one particular solution.
References
Cantone, M., & Mehta, S. (2020). Lockheed Martin: Strengthening its Foothold in Saudi Arabia. In SAGE Business Cases. SAGE Publications: SAGE Business Cases Originals.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2019). Strategic management: Concepts and cases: Competitiveness and globalization. Lockheed Martin Case 20. Cengage Learning.
Wiegand, C. (2018). F-35 Air Vehicle Technology Overview. 2018 Aviation Technology, Integration, and Operations Conference.