Case Analysis - Lockheed Martin

Lockheed Martin
Camaryn Jackson
Brenau University

I. Strategic Profile and Case Analysis Purpose

This section briefly analyses the critical factors that are affecting the Lockheed Martin’s past strategy and also it current performance. Lockheed Martin’s strategy was initially based in creating common designs that has affordable variants meeting the individual requirements for their different services customers. The drawdowns in Afghanistan and Iraq have seen its stocks drop from $120 in the mid 2008 to $ 80.9 recently. (Hitt, Ireland,Hoskisson, 2015, p. 259) This was after the company banked their dependence nearly fully on the U.S. defense spending. As matter of fact, out of the 78 percent sales on military arms, 82 percent comes from the purchases made by the Americans. (Hitt et al, 2015, pg.259)

The funding from the Americans has been threatening in times of economic crisis thus; resulting to uneven cash flows and unprecedented layoffs. The recent downsizing of its workforce from 146,000 to a record 123,000 has forced Lockheed Martin to shut down some of its key projects and is now faced with forecasting reductions to meet the demand of new and existing products.

Another fact that is affecting Lockheed Martin’s current performance is the delays being caused on the F – 35 products. This particular weapon was scheduled to fetch almost $1.51 trillion in the overall and final tally. (Hitt et al, 2015, p. 259) This might not be achieved due to the political climate that currently threatens and has an effect on the project scope. Also, the prevailing production delays are also factors that are preventing the company from enjoy the trillions earlier mentioned. It is clear that Lockheed Martin thrives in times of unrest and suffers in times of peace and tranquility. One last performance issue that currently grapples this company, is the fact that, Lockheed faces a challenge in delivering their products within 10 to 20 year production and development lead time.

II. Situation Analysis
A. General environmental analysis

The power of suppliers is factor to consider in this particular analysis. Since many contracts are given a cost plus provision by governments, the use of low quality inputs to provide high quality products helps to lower the effects of high costs from the raw material suppliers. It all leads to the management of its toxic waste materials
B. Industry analysis

The power of buyer’s factor is the current and most serious factor affecting Lockheed Martin’s business. This evidenced by the recent cuts done on F-35 productions. Since the United States accounts for more than 80% of Lockheed’s revenue, if it cuts is budget on military warfare, Lockheed shall face massive risks.