Northrop Grumman is one of the leading military contractors in the world. The company has maintained its position for several years despite the tough competition around. Its business is mainly divided into four major sections: Electronic Systems, Aerospace Systems, Technical Systems and Information Systems (Wilkinson & Kannan, 2013). The company competes with many other companies in the United States for some services and programs. Some of its competitors include Boeing, Lockheed Martin, General Dynamics and Raytheon. Jack Welch’s 5-slide methodology will be useful in understanding what the external environment looks like, what the company has been up to, what is around the corner and what the company can do to win (Welch & Welch, 2005).
What the Playing Field Looks Like
Lockheed Martin is one of the leading military contractors in the world. It serves both the commercial and the civil sectors. It mainly concentrates on the defense side of the government contracts, especially of the aerospace systems. It also manufactures products such as space vehicles, aircraft components, aircraft, and missiles. It is the leading competitor of the Northrop Grumman Company; this is because the firm has the technical expertise and can price the long-term contracts at a relatively lower price. Its big size places it in a position to enjoy the economies of scale in sectors like purchasing, designing and manufacturing.
Boeing also acts as the great competitor to Northrop Grumman. It has a good reputation as the world greatest aerospace company. It has invented many products including the famous 787 Dreamliner jet. It also produces satellites, and launches systems and missiles defense systems. There are also some new entrants in this industry like General Dynamics Company and Raytheon.
What Competition has been Up To
As a company, Lockheed Martin has some strengths and weaknesses. It main strength is that it operates in four different categories, which are electronic systems, Aeronautics, global solutions and the information security (Fleisher & Bensoussan, 2015). It has been able to meet the demand of its customers due to diversified products. The company has a strong research and development department. It has occupied the top spot on the list of U.S. contractors. Finally, the employees of Lockheed Martin are said to be very competent.
Its weaknesses include the fact that it mainly relies on other countries for financial funds. It also does not have large private clients because it largely depends on the government contracts (Fleisher & Bensoussan, 2015). That means that if the government does not offer contracts to the company, then the company will have fewer clients and thus less income. The other outlined weakness is that the company deals with budgets of low prices.
As a company, Boeing has both strengths and weaknesses. It main strengths is that the company can manufacture different product categories for the sole purpose of meeting the demands of the clients. The different types of products create the stability of the company. Its products include integrated defense system, space and communication, military and missiles system and commercial planes. Another relative strength possessed by Boeing is that the company can maintain top quality products. For example, it has been said “Boeing builds the best products in the world, and its standards are second to none” (Arkell, 2003). It is also believed that the company can develop sophisticated aircrafts that meet the dynamic demands of the 21st century aviation industry.
Its main weaknesses include their high spending on research and developments. This has affected the net earnings of the company. It is believed that it spends approximately $3.3 billion in the research and development (Hellman, 2013). The other weakness is over-diversified activities of production that has led to their decline in performance. The type of management style is semi-autocratic, and this has resulted in some labor problems such as the decrease in the productivity of the employees (Hellman, 2013).
Some companies like the General Dynamics Company do produce Aerospace products. The company is not segmented into many departments, and thus it concentrates in one line of production. This creates an opportunity to come up with creative products than those of their fellow competitors.
The other competitive company is called Raytheon. It has conducted several activities related to research and development. It is so as to enhance the existence of its products and services. It has also make some efforts in developing new services and products so that to meet the requirements of its customers which change over time.
What Northrop Grumman has been Upto
Northrop Grumman has some values that guide the daily activities of its employees. The first value is that the company takes responsibility for ensuring that their products are of high quality. The company also aims at achieving the satisfaction of its customers. In addition, the company applies leadership principles in its activities, which are founded on their talents and use of advanced technology. The company provides innovative systems, solutions and products to the government and its entire customers.
The drivers of profitability within the company include the following factors. One, the segmentation of the production sector has been its main source of income. The company has left some of its programs and products that are lagging its potential to grow so that it may concentrate on those products that increase its profits margins. The contract with the defense forces has also contributed to the maximization of profit margins of the company. The U.S. defense industry invests with the Northrop Grumman Company because it is the leading company in the production of the aircraft parts.
What’s Around the Corner
The competitive nature of the industry has made all the companies to come up with their means of surviving the cutthroat competition. For example, for Northrop Grumman to survive, it has increased the potential of marketing its services and products and providing its customers with the required equipment and financial aid so that the delivery of the products and services would efficient and effectively. It has vertically integrated its supply chain; this is by an effective oversight of their suppliers and their subcontracts so as to maintain their dependable source of the raw materials.
Boeing has a strong backlog, and this is expected to keep it busy in the future years. It has also started the industry in other parts of the world, for example, the Middle East, Asia- Pacific and also in the African regions. As the industry grows internationally, then there will be an increase in demand from the defense and security sectors. For the past years, the Boeing has grown its number of satellites and thus increased its opportunity.
Lockheed Martin has made some changes in the last years. It has grown its international market share so as to reduce the level of dependency on the domestic market. The company also has introduced more innovative products, and this was to facilitate its survival in the competitive environment.
Winning Strategy
Northrop Grumman Company has increased the expertise in its operations, and this facilitates the creation of quality products and services. It has also vertically integrated its supply chain so that to maintain a readily available flow of raw materials.
References
Arkell, D. (2003). Boeing Frontiers Online. Boeing.com. Retrieved 18 February 2016, from
http://www.boeing.com/news/frontiers/archive/2003/july/i_ca1.html
Fleisher, C. S., & Bensoussan, B. E. (2015). Business and Competitive Analysis: Effective
Application of New and Classic Methods. Upper Saddle River, NJ: Pearson.
Hellman, J. (2013). The Boeing Company: A Short SWOT Analysis. Valueline.com. Retrieved
18 February 2016, from
http://www.valueline.com/Stocks/Highlights/The_Boeing_Company__A_Short_SWOT_Analysis.aspx#.VsW4jUDpC1s
Welch, J., & Welch, S. (2005). Winning. New York: HarperBusiness Publishers.
Wilkinson, T. J., & Kannan, V. R. (2013). Strategic management in the 21st century. Santa
Barbara, Calif: Praeger.
