Currently, among the largest defense companies in the world is Lockheed Martin Corporation. While the company is arguably on top of its peers, it still shares the spot with two other companies, namely Northrop Grumman and Boeing. With a combined revenue that makes up a total of approximately 1% of the USA's GDP, it is not surprising that these companies appear in each of the existing Fortune lists. In essence, Lockheed Martin Corporation (LMT), appears on the Global Most Admired Companies, Fortune 500, America's Most Admired Companies, and the Global 500 lists. LMT, together with the two companies mentioned above, is the largest arms-producing companies on the Globe. It is in this context that this proposal aims to scope LMT's profile, marketing mix, and operational strategies to understand, thus better create a marketing plan for the company.
Lockheed Martin Corporation Company Profile
As indicated above, LMT is among, if not the most prominent, defense companies of the world. However, before appreciating the greatness of the company in recent times, it is imperative to consider the origins of the company and its development into what it is at the moment. Consequently, Lockheed Martin Corporation was formed through the merger of the Lockheed Corporation and the Martin Marietta Company in the year 1995. Before the final merging of the companies in 1995, the initial talks on the merger can be traced back to March 1994 when Lockheed Corporation and Martin Marietta announced their $10 billion mergers on August 30, 1994. Since then, the headquarters of the merged companies were based in Bethesda, Maryland. It is worth noting that LMT was not the only company that resulted from the merger as smaller companies such as L-3 Communications and Martin Marietta also spun off from the merger. While the former is a defense company in its own right, the latter is a manufacturer of industrial materials mostly used in the defense industry.
During the merger, the company reportedly received billions of dollars in subsidies from the government to finalize the process. Moreover, the executives of the company also received massive bonuses from the government Norman R. Augustine, the CEO of Martin Marietta company, receiving an $8.2 million bonus. While many skeptics may fault the American government, among them previous Democrat presidential contender Bernie Sanders, most officials in the federal system appreciated the contribution of both companies to the National Defense's arsenal. Upon merging, both companies contributed essential products to the portfolio. While Lockheed contributed the Trident Missile and the P-3 maritime patrol aircraft, for example, Martin Marietta brought in Titan Rockets, the Space Shuttle External Tank, and Sandia National Laboratories. By the fall of the 1990s, LMT acquired a stake outside the defense industry through the development of texture mapping chips and the entire graphics model utilized in the Sega Model 3, an arcade game popular in America at the time.
In 2001, LMT sold its Lockheed Martin Control Systems to BAE systems and also the Aerospace Electronic System business to the same buyer. The resulting group encompassed Lockheed Martin Space Electronics and Communications, Fairchild Systems, and also Sanders Associates. It is also in the same year that the group won the contract to construct the F-35 Lightning II for the US Airforce. The tender stipulated that the company was required to produces 3000 aircraft as the initial order. It is also worth noting that in the 2000s, the company also handled a significant amount of controversy and even paid the US government $7.1 million due to allegations against the company's predecessors' false cost submissions to NASA.
During the 2010s, the significant activities and events that surrounded the company included the closure of the company's Eagan, Minnesota location. The closure was a result of strategies aimed to increase productivity and optimize capacities in other locations across the continental USA. Another significant event was the acquisition of the Quantum Computing System acquired from D-Wave Systems. Upon completion of the acquisition, the two companies signed a contract, including the manufacture of one mores system and the maintenance and servicing of the existing systems. Moreover, the company as well acquired the overhaul assets from Aveos Fleet Performance from Montreal, Canada. Later in the next year 2014, the company also acquired Beontra AG, a business in the airport management industry providing commercial airport solutions. Later that year, LMT received a contract from the Pentagon to construct a space fence designed to trace debris and help prevent the damage of satellites and spacecraft. The company also relinquished 40 F-35 fighters to South Korea in a deal to last from 2018 to 2021. Additionally, towards the end of 218, the company also received a $480 million contract by NASA for Commercial Lunar Payload Services.
Currently, the start of 2020, saw LMT receive a contract from the Naval Sea Systems Command. Similar to most of the contracts that the company had received from the Department of Defense, the contract was worth a significant amount of $138million. According to the contract, the Rotary and Missions Unit of the Company was required to develop and test the AEGIS Advanced Compatibility Build 20 combat system. Over the history of the company, LMT enjoyed a good reputation, especially concerning its contracts with its associates, its biggest client, the USA government. Nonetheless, the company got a negative review after the Pentagon found at least 800 software defects in the F-35 fighter jets. Similar reports from 2018 and 2019 indicated defects in the same regard.
In terms of finances, LMT has enjoyed huge profits from its deals and contracts with its biggest clients who, as indicated above, include the USA and South Korean governments. From the reports on the 2019 fiscal year available on the company's official website, LMT made a total of $6.230 billion and annual revenue of $59.812 billion, which was an 11% increase compared to LMT's previous fiscal cycle. The table below indicates the financial statistics of the company for the previous five years.
|Year||Revenue in $ Millions||Net Income in $ Millions||Assets in $ Millions||Share Price in $||No of Employees|
Lockheed Martin Corporation 5 Year Financial History
Inferring to the numbers above, it is clear that Lockheed Martin has been progressive in the last five years of the company's history. One of the notable changes of the company includes the steady increase in the value of the company's share price from a low of $187 in 2015 to a high of 389 during the 2019 fiscal year. Additionally, the company's net income has also increased exponentially over the five years, with the revenue almost doubling in value. Apart from that, the number of employees has stayed relatively the same with a reduction of only 16,000 employees when one compares the 2015 and 2019 fiscal years.
Current Marketing Situation
Currently, Lockheed Martin employs a marketing strategy that involves the engagement of potential clients through various media. The company uses both traditional and digital media in the attraction of its customers, who are majorly either large corporations or governments. For example, the company leverages its brand recognition and excellent track record to attract customers. Moreover, they also depend on the references of their satisfied clients who recommend the company to their associates. In this regard, the company does not engage in the traditional marketing strategies that other corporate institutions use; instead, the company has a system that makes the clients search for the buyer. For example, according to the 6 Steps to Marketing to Lockheed available on the official company website, the conglomerate encourages potential clients to do their research on the company, including having them review their annual reports to understand its portfolio better. It is also worth noting that the company also uses influencers and other procurement specialists to acquire new clients.
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