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Excellent Technology Base - Essay Example

Excellent Technology Base – The Corporation is well known in its wake of competition by providing the best of best equipment with pioneered technology. Technology development can be seen under various segments of the company; in military support the department of SKUNK works is responsible for providing the world with the stealth technology, the Aeronautics department is well known for providing the most potent military & commercial aircrafts all around the world, the space systems have provided the world with the Hubble space telescope which is responsible for over 80% of the discovery in space under NASA.

Diverse portfolio of programs – With the corporation’s strength in various business segments such as Aeronautics, Space Systems IS&GS & Electronic Systems, every business segment supports its own projects in form of company targets & innovation or providing programs for college students & graduates by creating the next generation leaders in engineering & technical support. Positive Cash flows – “The Company has reported to have heavy liquidity in assets as it has been able to maintain 2 years of surplus (backlog of $80.9 billion in fiscal 2008 & $78 billion in fiscal 2009) positive cash flows.” [phx corporate2] With heavy amount of sales & high turnover during the times of war & crisis, the company is able to combat the credit crunch faced by the economy & has created enough liquidity in case of any fall in the profit margin

Weakness:

Heavy dependence on US government: “nearly 80% of the revenue for the company is generated from the US government, with stringent rules & regulations; the company is forced to abide by the conditions stated by the government which means a lot of red tape. Any violation of these laws can result in heavy penalties.”[wetfeet3] Developing space systems: The Company should further focus on its space systems. The least amount of revenue generation is from this particular unit which is also responsible for lowering the company’s net sales. The primary reason for this is because of the high cost of capital involved in the developing satellites & other system platforms.

Opportunity:

International demand for aircrafts: The Corporation with its pioneered technology in the aeronautics section has a very high demand for supplying military & commercial cargo systems throughout the world. According to a survey from Datamonitor, the Corporation is expected to further build at least 4,500 fighters within the next 20 years which is at least 7 times than the current production. Global war against terrorism: One of the major opportunities the company has in hand is increase in the defence spending post the 9-11 era. The increase in military funding is mainly because of the hostile situation on international terrorism.

Threat: Competition: With time there are various other players involved in providing the world with the best of equipment, companies such as Boeing, Raytheon, Northrop Grumman Corporation & General Dynamics Corporation. Each of these titans are well known in their own perspective of providing the best with their technology base. Political instability: With Barack Obama presiding the US government, the company faces a threat of decline in government spending on military supplies as with the new administration in place; there is a possibility of spending on economic stability rather than spending on the defence.

Satellite Technology: Company’s faces a major threat from the failure of their Satellite launch system & this has marked negatively on the company’s image. In 1999, the company had suffered a lot due to 3 launch failures as a result the company’s profit margins fell sharply during the specific year. Outsourcing: With cheap labour coming in demand from the world to reduce cost & expenses, various agencies all around the world would cope for cheaper labour of providing the best of best equipment, the company faces a threat of outsourcing labour force mainly from India & China.

PEST Analysis: Political factor: “Lockheed Martin is a global leader in supply of defence equipment based on the turnover in 2009 fiscal year. 85% of the company’s revenue is from the spending made by the United States government.”[wetfeet4] Lockheed Martin is highly sensitive to changes caused because of the political instability which is caused by the government creates a direct hit on the company’s revenue. “Lockheed Martin has declined its 2010 expectations because of the Obama administration which may decide to slash their budget which includes defence as a part of it as well, as a forecast the corporation might suffer heavy losses” [manufacturing.net5]

Economic Factor: The Corporation’s revenue generation is made by producing, operating & providing after sales support for its clienteles, which are always government agencies (mainly the US government- Department of Defence). Company’s net income & revenue generation sustainability is mainly because of the civilian contracts which the company has taken in place, although they do not have much of significance it helps the company to sustain at times of global peace. With the company’s pioneered technology, the company has decided to develop and focus on world climate issues & providing the world with sustainable energy so as to provide solutions to the world against pollution & renewable sources of energy.

Social Factor: “Within the next decade good number of employee strength are to retire from Lockheed Martin Corporation with an approximation of 100,000 employees. Therefore the company may forecast tremendous pressure under pension costs which can impact heavily on the company’s profit margin. To meet its obligation to its retirees, the existing funds of the company are currently lying in their investment accounts are delivering low interest rates & thus in this relation the company might suffer its mark on the profit line. With the primary focus on the future stake of its employees, the corporation is helping widen the workforce of the future by providing internships for college students & graduates. The corporation also builds its responsibility to educate the community on several imperative concerns & the next generation of techies.” [googlefinance.com6] [forbes.com]

Technological Factor: Lockheed Martin Corporation maintains its brand of pioneered technological advances around the world & is till date the titan. Although the company faces fierce competition in commercial aviation from Boeing the company has decided to move on to a different category of commercial transportation. Thus with their advance technology, the company has a focus on supersonic technology & decided to use this technology on commercial transportation.

This is a major opportunity for the company to amplify its revenues by to focusing on this particular segment. Lockheed Martin forecasts heavy demand and sales based on the current economic situation which will reduce time & increase efficiency of civil aviation. With the company’s technology base the company has also decided to solve the aviation industry’s major problem of designing & building aircrafts with their sophisticated electronic & stimulation systems.

CONCLUSION:

Although the company is at the top of the lead with its technology base, the company faces threats from its competitors & the political instability, being this situation the corporation still instigates the fact of surviving the phase of abrupt events & competition. The corporation has faced immense heat from the internal & the external environment & the company still stands anchored with its base rooted deep with the corporate objective to lead the way with innovation!