Lockheed Martin Case 2011
Executive Summary
Lockheed Martin is a leading security and defense company based in Bethesda, MD with operations that span the globe. Lockheed Martin experienced a positive turnaround under new CEO Robert Stevens’ leadership, and is now entrenched as a leading competitor in the Aerospace and Defense (A&D) industry. They maintain an extensive business portfolio and continue to increase shareholder value. However, recent issues with contract mismanagement and cost overruns involving the government F-35 program leave a negative outlook on their operations. They also face increasing pressure to acquire and retain key employees from a diminishing talent pool. Government budget cuts threaten to hurt revenues, thus making it important for them to find new revenue streams.
Problems 1. Contract Mismanagement 2. Overreliance on U.S. government 3. Unattractive to key talent
Industry Analysis
Lockheed Martin operates in the Aerospace and Defense industry. It is highly competitive with the key success factors being innovation, quality of management, contract management, attracting and retaining key workers, and program performance. (See appendix 2 for industry matrix)
The Aerospace and Defense Industry is best defined as an Oligopoly, while the civil aerospace sector is defined by a Duopoly. 90 percent of industry revenues come from the twenty largest companies (Hoovers, 2011). There is no one SIC code that best fits the industry due to the various sources of revenue within the industry. The SIC codes that apply are: 3761 guided missiles and space vehicles, 3721 aircraft, 3724 aircraft engines and engine parts, 3728 aircraft parts and equipment, 3764 space propulsion units and parts, 2769 space vehicle equipment. The industry as a whole is made up of around 1300 companies, most of which specialize in few areas, such as engines and navigation systems, and are subcontractors to the largest companies (Hoovers, 2011).
Major players in the industry starts
Lockheed Martin is a leading security and defense company based in Bethesda, MD with operations that span the globe. Lockheed Martin experienced a positive turnaround under new CEO Robert Stevens’ leadership, and is now entrenched as a leading competitor in the Aerospace and Defense (A&D) industry. They maintain an extensive business portfolio and continue to increase shareholder value. However, recent issues with contract mismanagement and cost overruns involving the government F-35 program leave a negative outlook on their operations. They also face increasing pressure to acquire and retain key employees from a diminishing talent pool. Government budget cuts threaten to hurt revenues, thus making it important for them to find new revenue streams.
Problems 1. Contract Mismanagement 2. Overreliance on U.S. government 3. Unattractive to key talent
Industry Analysis
Lockheed Martin operates in the Aerospace and Defense industry. It is highly competitive with the key success factors being innovation, quality of management, contract management, attracting and retaining key workers, and program performance. (See appendix 2 for industry matrix)
The Aerospace and Defense Industry is best defined as an Oligopoly, while the civil aerospace sector is defined by a Duopoly. 90 percent of industry revenues come from the twenty largest companies (Hoovers, 2011). There is no one SIC code that best fits the industry due to the various sources of revenue within the industry. The SIC codes that apply are: 3761 guided missiles and space vehicles, 3721 aircraft, 3724 aircraft engines and engine parts, 3728 aircraft parts and equipment, 3764 space propulsion units and parts, 2769 space vehicle equipment. The industry as a whole is made up of around 1300 companies, most of which specialize in few areas, such as engines and navigation systems, and are subcontractors to the largest companies (Hoovers, 2011).
Major players in the industry starts
Bibliography: Bruno, M. (2008, December 1). Managing Concern. Aviation Week & Space Technology, 169(21), pp. 62-62. Figlar, M. (2010, February 17). Lockheed Martin: Changing the Culture of Leadership. BusinessWeek.com, pp. 2-2. Forbes. (2011). Buy/Hold or Sel Analysis. Retrieved November 5, 2011, from www.forbes.com. Hoovers. (2011, November 14). Lockheed Martin Company Overview. Retrieved November 14, 2011, from Hoovers a D&B Company: http://0-subscriber.hoovers.com.library.acaweb.org/H/company360/overview.html?companyId=10903000000000 Hoovers Industry Week. (2009, May). Maintenance Outsourcing As a Global Strategy. Industry Week, 258(5), pp. 22-22. Lockheed Martin. (2009, December). Ares I Experimental Flight a Success. Retrieved November 14, 2011, from http://www.lockheedmartin.com/data/assets/ssc/NewHorizons/NH122009.pdf Lockheed Martin Lockheed Martin. (2009, June). Our Culture. Retrieved November 9, 2011, from Lockheed Martin: http://www.lockheedmartin.com/aboutus/culture/index.html Lockheed Martin Lockheed Martin. (2010, March 12). 2010 Proxy. Retrieved November 9, 2011, from http://www.lockheedmartin.com/data/assets/corporate/documents/ir/2010/2010-Proxy.pdf Lockheed Martin Lockheed Martin. (2011, November 9). Total Value. Retrieved November 9, 2011, from Lockheed Martin: http://www.lockheedmartinjobs.com/totalvalue.asp PayScale Ratnam, G. (2011, July 26). Lockheed Profit Rises 3.9% on F-35; 2011 Outlook Raised. Retrieved November 14, 2011, from http://www.bloomberg.com/news/2011-07-26/lockheed-profit-rises-3-9-on-f-35-orders.html Sanati, C