July 27, 2013
Bus-421 Strategic Management

Executive Summary

Given the likelihood of huge cuts in the procurement of military equipment by the U.S. government over the next 10 years, recommend to the CEO of Lockheed Martin how the company should prepare for the loss of its most important customer.

The following is a summary of the challenges and issues facing Lockheed Martin Corporation as the company and Marillyn Hewson, the CEO, face cuts to their revenue by the United States Department of Defense, which accounts for 83% of their total revenue. Their challenge is to maintain the profitability and integrity of the company. This report will discuss the three key issues facing Lockheed Martin, which are; the U.S …show more content…

They have to maintain their competitive advantage through superior customer service to all their clients.

Industry and Competitors

Lockheed Martin Corporation operates in the aerospace defense industry. According to the Standards and Poor’s Stock report, the outlook on the industry is cautiously optimist.
“We continue to see improving commercial air traffic, driven by recovering global economic trends, as driving strong commercial aerospace results. However, we also see continued pressure on the defense budgets going forward, as politicians seek to rein in large federal budget deficits.” (Standards and Poor’s Stock report, July 2013)

Their Key Rivals include, Boeing, Northrop Grumman, Raytheon and General Dynamics Corp, however they have a competitive advantage over these companies because of their cash flow, product offerings and reputation for reliability.

Lockheed Martin is operating with a Focused Differentiation Strategy, “aimed at securing a competitive advantage with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers.”(Thompson 2012) This strategy allows them to cater to global governments and meet their defense product needs. This is a successful strategy for Lockheed Martin because it is designed to appeal to the unique preferences of the world governments. These governments are