Report Prepared by:
General Dynamics – Through the Lens of a Strategy Consultant General Dynamics – Through the Lens of a Strategy Consultant
General Dynamics (GD) has realized a long-standing history of success delivering product and service solutions since being formed in 1952. They have purposely divested themselves of technology, product and service offerings in an effort to remain focused on their core competencies and primary customer; the United States Department of Defense. While GD’s primary customer remains the DoD, they have diversified their offerings to adjacent markets within the DoD (e.g, Information Technology and Cybersecurity solutions). GD has also acquired Gulfstream and Jet Aviation, both companies that deliver aircraft and support services within the privately owned aircraft industry in an attempt to diversify their customer base. The supporting information and recommendations focuses, primarily on GD’s involvement in the Defense industry and further concentrates on the Land Systems and Information Technology business segments; two of four business segments which GD operates. Within the land systems, or combat vehicle customer base, GD retains the majority market share and, thus, creates a oligopolistic condition within this niche community. While there are manufacturers that are capable of delivering product solutions, GD owns and retains the design and production rights to the M1 Abrams main battle tank and the STRYKER combat vehicle platforms. While the diversification into the sale of private aircraft industry, the market is more cyclic and volatile due to a perfect competition condition. Primary competitors being Cessna, Hawker, Bombardier and Dassault Falcon. I recommend conglomerate diversification for expanding product and service offerings for new customers, possibly within the DoD. By leveraging the robust customer base, relationships and track record of delivering superior combat vehicle solutions, GD can capitalize on emerging opportunities within the information technology, cybersecurity and cloud computing domains. This also allows GD to bring technology spin-offs or variants to new customers, creating value and decreasing their reliance on a single customer community.
Table of Contents
QUALITY AND CONTROL7
Porter’s Competitive Forces AnalysisA-2
External factors evaluation (EFE)A-3
Internal factors evaluation (IFE)A-4
Industry Attractiveness – Land SystemsA-10
Industry Attractiveness – AerospaceA-11
Industry Attractiveness – Information TechnologyA-12
Business Strength – Land SystemsA-13
Business Strength – AerospaceA-14
Business Strength – Information TechnologyA-15
GD and its business units operate to provide products and services, primarily, across the Defense industry. While the Defense industry remains relatively cyclic, it has experienced steadily increasing growth since the war or terrorism began more than nine years ago. GD is one of the top five Defense contractors within the Aerospace and Defense Industry (NAICS 336992 - Military Armored Vehicle, Tank, and Tank Component Manufacturing). To distribute their products and services, GD relies primarily on the Program Executive Office for Ground Combat Systems (PEO GCS) located in Warren, MI. Across the portfolio of programs that PEO GCS manages, GD produces and services more than 50% of the platforms used in combat today. These platforms comprise the majority of the combat vehicle fleet density, considering the M1 Abrams main battle tank, STRYKER and Light Armored Vehicle (LAV) variants fielded today. While the current defense spending is estimated to be 4% of the...