Embracing technological and budgetary/regulatory changes could require Lockheed Martin to shift its business level strategy and compete in a new space. Discuss this shift and the key challenges associated with it.
Lockheed Martin is deeply involved within the defense market, which has been greatly impacted over the years by many regulations. They have to deal with trade embargos and restrictions with certain countries, and must keep national security in mind which is dictated by the International Traffic in Arms Regulations or ITAR. This regulation allows the president to control what products and information can be included in a contract with a company or agency outside of the United States. There is a lengthy contract approval process
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When countries are in war they need to have the latest and greatest defense equipment to protect their citizens. Yes you can choose one fighter plane over another because it has different features, but when it comes down to it you still need to have a fighter jet to use. The same can be said about many products in the defense industry, they might be able to choose a different version created by you or someone else but they are still going to need to buy a product to be able to defend themselves.
Bargaining power for buyers is going to be when there is not much fighting going on in the world. This is because companies like Lockheed are going to be very limited on the work they can do and will be more willing to sell a fighter jet at a discounted rate, but still making profits, rather than not selling any and having no profits coming in. Lockheed Martin will also be able to get their raw materials at a cheaper price which then allows them to produce
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Does Lockheed Martin have a sustainable competitive advantage in the defense industry? If so, what is the source?
Looking at Lockheed Martins background and industry in which they are in you are able to create a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths for Lockheed Martin would include many things. They are committed to delivering superior returns for shareholders while leading performances and good citizenship. The four operating principles that they use are; secure, extend, expand, and enable. Secure is to secure the existing programs by preforming with excellence. Extend – the value of our platforms by shaping follow-on business and tailoring our existing capabilities for new applications. Expand – our position within targeted segments with market-based strategies. This also means ore pursuits internationally, and greater synergies between Lockheed