Content

1. Introduction………………………………………………………………… 2

2. Description…………………………………………………………………. 2

3. S.W.O.T……………………………………………………………………. 4

4. Market analysis……………………………………………………………... 6

5. Conclusion………………………………………………………………….. 7

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1. Introduction
The main purpose of this report is to provide analytical information regarding Lockheed Martin
Corporation. This report is divided into 3 parts. The first part describes company`s history and
profile, all operations, current value and future plans for development. The second is S.W.O.T.
analysis which will illustrate strengths, weaknesses, opportunities and threats of the company on
the global market. The last is market analysis that includes the company`s last five years
performance on the home market. It must be clarified that S.W.O.T and market analysis are done
on one segment of the company which is Aeronautics (lockheedmartin.com, 2016).

2. Description
History

Initially, there were two separate companies Lockheed Corporation and Martin Marietta
Corporation. They merged in the 1995 year and formed one of the worlds` largest defence
companies. The first chairman was Daniel M. Tellep and CEO Norman R. Augustine
(lockheedmartin.com, 2016). Over the last 20 year the company deal with different countries but
mostly with USA. It provided the government air vehicles and various security technologies. It
received prestigious awards, such as Malcolm Baldrige National Quality Award or FAA Best of
the Best Award for Work with Small Businesses (ibid).

Profile

Lockheed Martin Corporation is international safety and aerospace company that focuses on
investigation, style, improvement, production and maintenance of innovative technology system,
goods and services. Currently, Chairwoman, President, and Chief Executive Officer is Marillyn
A. Hewson. The company`s headquarter is located in Bethesda MD but it has a lot of plants
around the world. It is the main supplier of the U.S. government in various defence technologies.
In 2014, 79% of $45.6 billion net sales were from the U.S. Government. Besides, it deals with
foreign countries as well as private sectors. The company operates on five segments, which are:

Aeronautics – the most popular segment of the company and it generated approximately net
sales of $14.9 billion, 32% from total sales in 2014, this segment is connected with designing,
improving and producing air vehicles.

Information Systems & Global Solutions (IS&GS), with approximately $7.8 billion which is
17% from total sales in 2014. This part of the company is responsible for advance technology
systems and combining IT solutions and administration services.

Missiles and Fire Control, with approximately $7.7 billion, that is equal 17% from total sales in
2014. This segment engaged in security organization. It provides strategic missiles, fire control
systems and other technical services.

Mission Systems and Training, with approximately $7.1 billion which is 16% from total net
sales in 2014. It provides ship and submarine operation and battle technologies such as different
sensors and radar systems. Besides, provides training and simulating services.

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Space Systems - with approximately $8.1 billion 18% from total net sales in 2014. It explores,
upgrades and produces satellites, world-wide missile and space transportations systems (ibid)

Logo of Lockheed Martin:

Source: Lockheedmartin.com

Mission:  We solve complex challenges, advance scientific discovery and deliver innovative
solutions to help our customers keep people safe and provide them essential services.

Vision: Be the global leader in supporting our customers to strengthen global security, deliver
citizen services, and advance scientific discovery.

Values:

 Do What's Right
 Respect Others
 Perform With Excellence

Current value

According to Google Finance, market capability of Lockheed Martin Corporation is $66.18B.

The cost of one share is equal to 213.93 USD and it has 303.00M outstanding shares
(Google.com, 2016).

Future plans

Lockheed Martin understands the importance of research in defence business. Therefore, it pays
great attention to research, development and innovation of its products. In near future it plans to
increase capabilities of all segment of its business. Besides, the company plans to make more
international trades. Then they are researching ways of reducing cost of production (forbes.com,
2016).

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3. S.W.O.T. Analysis

STRENGHTS WEAKNESSES

 Strong relationships with US Government  The company mostly depends on US

 Innovative technologies and products government contracts

 The World`s largest military contractor  Rely on suppliers and partners

with wide range of products

OPPORTUNITIES THREATS

 More international sales  Strong competition

 Accelerate production of F-35  Cyber and other security threats

 Slowdown in the global economy

 Laws, regulations and international

barriers

Strengths

The company has very innovative products that have competitive advantages among its competitors. As

an example, F-35 project that has the enhanced hide and seek supremacies. (Lockheed Martin, 2016).

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Lockheed Martin is leader in defence and global safety companies. Especially, in Aeronautics besides

various air vehicles it also provides additional upgrades and trainings (Annual report, 2014).

Weaknesses

The company highly depends on US government contracts which occupied 79% from net sales in 2014

(Annual report, 2014). The company has cut 4,000 job positions because the US government reduced

spending. Over the last 7 years the company has cut 30,000 job positions (CNN, 2013).

In majority situations the company relies on suppliers and partners. If they do not provide required

materials on time the company can fail its performance. Especially, there are some unique suppliers

without substitutions. For example, in 2015 one supplier experienced accident and it could not provide

materials. It was the only source of that material (annual report, 2014).

Opportunities

There is strong interest in products of the company among international customers. Especially, in the

Aeronautics segment, around 3,100 orders of F-35 are expected from U.S. and internationally (Google

books, 2010).

F-35 is one of the most successful projects of Lockheed martin. There is massive interest on this

program. But company is not producing it with full speed because it is still testing. If the company

increases production rates it has great chance to rise up its global rank and revenue (Yahoo finance,

2016).

Threats

In 2015 even developed countries experienced economic slowdown and in 2016 it is also expected

(Bloomberg, 2016). As a result, countries cut spending that can negatively affect company`s business.

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The company operates in oligopoly and it has few but very strong competitors. One of them is Northrop

Grumman which has beaten Lockheed Martin and Boeing and won the Pentagon`s biggest contract over

the last 10 years that totally costs around $80 billion (NY times, 2015).

4. Market Analysis

Supplier Power (medium):

Although there are various supplier companies, not all of them meet very high requirements of
Lockheed Martin. Especially, large engine manufacturers with few competitors. Besides, there
are some sole suppliers without competitors. However the company still can negotiate with
them in order to get the best contract. Other components like steel and plastics or other minor
materials are a lot of in markets and prices are determined by market which means that
suppliers of those materials do not have suppliers power at all.

Buyer Power (high):

For Lockheed Martin bargaining power of buyers is very high because 79% of whole net sales of
the company were from U.S. Government (annual report, 2014). In addition, there are strong
competitors. These factors give strong power to the buyers.

Competitive Rivalry (high):

Lockheed Martin operates in oligopoly. It means that it has few but powerful competitors. Two
of them are Boing Company and Northrop Grumman Corporation. The market shares in
Aeronautics, Lockheed Martin has 36.51% of share, Boeing has 37.72% and Northrop has
23.87% (CSI market, 2014).

Threat of Substitution (medium):

Nowadays, there are different substitutes to aircraft travel such as high speed trains and ship.
However, for long distance air vehicles have major advantage of speed. Besides more and more
people are using internet for communicating purposes that also reduces need to aircraft. On
other hand competitors also have high quality products that can substitute Lockheed`s
products. But Lockheed Martin has some very innovative products with competitive
advantages. One example is F-35 with advanced supremacies. Therefore Threat of substitution
is at medium level.

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Threat of New Entry (low):
The Threat of new entrants is very low and there are several reasons for that. First of all it
requires huge amount of capital because majority of contracts are long term that means money
from sales will not come immediately. In addition, there are different governmental regulations
and barriers. Besides money, it requires specialized workers and technologies. Other
competitors have great reputation and relationships that also make difficult to get contract
(Tippie school of Management, 2013).

5. Conclusion

To conclude, this report covered analytical information about Lockheed Martin Corporation

which includes brief history and profile of the company. Besides, it described five operations

and future plans of the company. Further, there were provided logo, mission statement and

some analysis regarding advantages and disadvantages of the company. Furthermore, there

was market analysis of the company on home market. These two analyses were done on

Aeronautics segment of the company.