Lockheed Martin SWOT & PESTLE Analysis

Strength

1. Strong product portfolio: With more than 200 specialized products that Lockheed Martin offers, its product portfolio is strong enough. It has products not just for air, water and land but space as well. Advanced Train management system, Laser weapon system, Aegis combat system, Warfare Destroyer, Surveillance radars, Airborne Lab, Tactical missile system, Logistic information system, Training systems, Simulators, Combat trainer, Cognitive control and demand, Common Vehicle, Cyber warfare, Fighters, Transceivers, GPS, Hybrid Airship, Ballistic Missiles, Spectrograph, Meteorological instruments, Oceanographic instruments, Helicopters are few products just to mention. Moreover, it has starting working towards adding onto new products to this portfolio with its research in neuroscience for brain simulators as well. In area of artificial intelligence, it is researching to enhance existing products’ capabilities by infusing it with AI. In area of cyber security as well, it is creating systems which are safer and difficult to crack. Such a wide and diverse range of products under single name, Lockheed Martin, is its biggest strength.

2. Provides customers with multi-layered and integrated air and missile defense: Lockheed Martin is known for its multi-layered and integrated air and missile defence systems viz. PAC-3, Aegis Combat System, THAAD, etc. These systems continue to improve and serve as the strengths of Lockheed Martin. PAC-3, a high-velocity interceptor, defends against incoming threats, including tactical ballistic missiles, cruise missiles, and aircraft. A contract worth $944 was won by Missiles and Fire Control or MFC for production and delivery of PAC-3 which shows the continued demand for these systems in the market. Apart from this, a plan to purchase the Aegis Combat System from Rotary and Mission Systems or RMS which are used to intercept a medium-range ballistic missile and track and destroy multiple live targets were approved by Japan’s cabinet. THAAD or Terminal High Altitude Area Defence system also came up with its first intermediate range ballistic missile intercept, and the 15th successful intercept in 15 attempts for the THAAD system since 2005. THAAD system continues to prove its ability to intercept and destroy many classes of ballistic missile threats to protect citizens, deployed forces, allies, and international partners around the globe.

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Weakness

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Opportunity

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Threat

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Political

1. Succumbing to political pressures: The philosophy of the ruling party, stance on international crisis and decisions related to it, have an immense impact on the Defence budget which in turn affects the Defence manufacturing companies like Lockheed Martin. The impact could be in terms of higher regulations, budget constraints, proliferation etc. One such example is when Lockheed Martin succumbed to the political pressure from the Donald Trump’s government which made it reduce its price for its best-selling product, F-35 in 2017. For the first time in history of aerospace manufacturing the cost charged for Air Force version of F-35 was brought down to less than $100 million. This was result of intense week-long discussions between Lockheed Martin and the U.S. government which were already been delayed. Lockheed Martin had to accept this offer as the U.S. Government plans to buy 2400 of such F-35 from it and it could not loose upon such a big contract. This is not just one incidence when the U.S. government has tried to bring down prices, even earlier governments have attempted doing this, at that time, the prices were reduced from $108 million to $102 million. This and many such political pressures are faced by Lockheed Martin where to stay in business it has to crunch its contribution margins.

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Economic

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Social

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Technological

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Legal

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Environmental

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