Strategic Audit Report: Executive Summary
Mike34
SFASWorksheet.docx
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Strategic Factor Analysis Summary
LOCKHEED MARTIN
|
SWOT # |
FACTORS |
WEIGHT |
RATING |
WGTD SCORE |
COMMENTS |
|
S1 |
Full support from the American government |
0.3 |
4 |
1.2 |
Assuring financial backers (Williamson, 2018). |
|
S2 |
Comprehensive coverage of four key market segments |
0.1 |
4 |
0.4 |
Which is helpful for the corporation since it broadens its income stream (Williamson, 2018). |
|
S3 |
Superior financial results year after year |
0.1 |
3.5 |
0.35 |
which entices stockholders and investors |
|
W1 |
Constant reliance on the United States government |
0.15 |
3 |
0.45 |
In accordance with national budget plans |
|
W2 |
Inaccurate demand projections |
0.1 |
1.5 |
0.15 |
There is a higher rate of business opportunity loss at the company compared to its primary rivals. |
|
O1 |
new and developing market |
0.05 |
1.5 |
0.075 |
Facilitated by bilateral free trade agreements |
|
O2 |
a rise in consumer expenditures |
0.1 |
3.8 |
0.38 |
Investor interest is expected to rise as the economy expands. |
|
T1 |
Constant, fierce rivalry |
0.15 |
3 |
0.45 |
More rivals might join the market as a result of the economy's expansion, cutting into the firm's market share. |
|
T2 |
Liability laws in various nations |
0.1 |
2.5 |
0.25 |
Various liability claims may be filed against the company, and it must comply with the laws and regulations of each country in which it operates. |
|
T3 |
Enhanced environmental protections |
0.05 |
2 |
0.1 |
Some of the firm's wares may have compatibility issues with outcomes from the 2016 Paris Climate Conference. |
|
|
TOTAL SCORES |
1.2 |
|
3.805 |
|
TOWS Analysis
|
LOCKHEED MARTIN TOWS ANALYSIS
|
||
|
Internal Factors
External Factors |
Strengths (S)
S1: Full support from the American government S2: Comprehensive coverage of four key market segments
|
Weaknesses (W)
W1: Heavy dependence on US government W2: Inaccurate demand projections
|
|
Opportunities (O)
O1: new emerging market O2: a rise in consumer expenditures
|
SO Strategies
S1/O1- Emerging nations who are trying to strengthen their national security regard the United States' support as a positive sign. Lockheed Martin now has a leg up on the competition thanks to this. |
WO Strategies
W2/O1- The increase in purchasing power means an increase in demand. Poor demand forecasting can hinder the company’s ability to meet future demands, which can be an opportunity for the competition. |
|
Threats (T)
T1: Constant, fierce rivalry T2: Liability laws in various nations |
ST Strategies
S2/T2- Because of the intense rivalry in the military and aerospace market, the firm has branched out into providing goods for other sectors, including the healthcare industry, the renewable energy sector, the intelligent distribution of energy, and compact nuclear fusion (Censer, 2020).
|
WT Strategies
W1/T2- The military budget decrease is more likely to have a negative impact on the corporation, resulting in a loss of market share. Less government-dependent rivals will strengthen with a wider variety of contracting opportunities. |
Recommended Strategy.
When you examine Lockheed Martin's TOWS projects thoroughly, you can see that the corporation has done well in recent years by expanding into new countries and selling its goods in those regions. Healthcare, sustainable energy, intelligent energy distribution, and compact nuclear fusion have been the company's primary interests in the past (Censer, 2020). Therefore, I believe that the corporation should pursue a strategy of diversification. Diversification is a business strategy used to expand into new markets by producing and selling new products and services. It is one of the four growth strategies shown by the Ansoff Matrix. Diversification tactics may be divided into subgroups that are either linked or unrelated to one another. As part of its diversification strategy, the company will develop new products and services in unrelated industries.
This course of action is dangerous since the firm lacks the required capabilities. When a firm adds new items, it does so by using its existing resources, expertise, and infrastructure. Lockheed Martin is a strong match for this approach since they have the necessary personnel and resources to execute it. After doing extensive research on market demands and consumer preferences, Lockheed Martin should implement the relevant diversification plan by acquiring successful firms or developing new products in non-core sectors. Utilizing its strong brand recognition and financial stability, the company has been expanding into new areas by purchasing existing enterprises in those regions. In 2011, they acquired QTC, an outsourced medical assessment firm, for $649 million (Clabaugh, 2011). They are also exploring new categories within the beverage industry. The company is now working on a technology to filter seawater for human consumption. Even if the market is extremely volatile, the company will be able to survive if the associated diversification growth strategy is implemented.
References.
Atherton, K. (2013, March 18). Using Graphene, Lockheed Martin Wants To Turn Salt Water into Drinking Water. Popular Science
Censer, M. (2020). Lockheed Martin Ventures Made Nine New investments in 2019. Inside the Pentagon, 36(6)
Clabaugh, J. (2011, August 22). Lockheed Martin to acquire QTC Holdings. Biz Journals.
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