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Lockheed Martin Strategic Expansion
John G Castillo
Purdue Global University
MT460: Management Policy and Strategy
Professor Keith Thurgood
May 9, 2022
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Company Overview
Lockheed Martin is based out of Bethesda, Maryland, and was originally two different
companies that merged. Glenn L. Martin established the Glenn L. Martin Company in Los
Angeles, Ca. on August 16, 1912. Allan and Malcolm Lockheed created the Alco Hydro-Aero
plane Company on December 19, 1912. The latter was known at the time for shattering speed
and distance records with seaplanes (A Merger of Equals, 2018). The merger between both
companies was completed on March 15, 1995, and at the time were the second and third largest
American defense contractors. Lockheed Martin is ranked 57th on the Fortune 500 list and is the
largest contractor for the US Defense Department. The products researched and developed
include aeronautics, missile and fire control, rotary and mission systems, and outer space. One of
their latest and most successful projects would be the F-35 aircraft, which is known as the most
advanced fighter jet in the world. There are three different versions available, which are: The F35A Lighting II operates from conventional runways, is the most common type used by the
United States and is also available to most international allied approved customers. The F-35B
can take off and land like a helicopter, which makes it useful for operating on short distances.
This model is used by the US Marine Corps, United Kingdom, and Italian Air Force. The F-35 is
a fifth-generation fighter jet that is logistically supported by over 298,000 American
manufacturing jobs, and 1,650 suppliers, with an annual economic impact of $65 billion
(Economic Impact, 2022). With over 350 facilities worldwide the overall target market for
Lockheed Martin would be the US military and allied-approved countries across the globe to
protect national interests.
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Strategic Planning
Strategic planning traditionally involves using five basic steps in the planning process,
which are Mission & Objectives, Environmental Scanning, Strategic Formulation, Strategic
Implementation, and Evaluation & Control. In Lockheed Martin’s case, its Missions &
Objectives would be to provide the most advanced technological products available in the world.
This also means being the leader and second to none. The fields that the company plans to
research and produce in would include land, sea, air, and space. Environmental scanning would
be the current and future environment the company will produce in, such as economic and
political climates. There needs to be research to see what products Lockheed Martin can produce
will be needed and the order of priority for these products by current and potential
customers. Strategic Formulation involves creating directions the company can go with their
products produced and the risks involved with going in certain directions with new and existing
products (Thompson, A. 2019). Lockheed Martin can go in many directions with its vast catalogs
of products and training programs, so having a strategic plan is vital in ensuring value for its
stockholders.
Expansion into the international market
The company would like to pursue an opportunity to expand research and production
within eastern Europe because of the escalation of conflict with NATO and potential NATO
members from Russian aggression. This conflict has caused an immediate and possibly
prolonged need for military defense equipment and training, which Lockheed Martin can
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provide. The cost to protect the area which consists of NATO nations will only increase in the
near future. According to the International Peace Research Institute, world military expenditures
will be already set to pass $2 trillion, with the US leading at $801 billion in 2021. Russia who is
the aggressor against Ukraine was already set to spend $65.9 billion in their buildup to the
invasion (Manolache, 2022).
Reasoning why entering the international market
Lockheed Martin’s research and development is in high demand on the current battlefield
which has evolved from previous wars due to the introduction of drone technology. This new
technology has been a game-changer and is one of the reasons Ukraine has been able to hold its
ground against the Russian invasion. Currently, Ukraine has been able to sustain its defense by
using Turkish Bayraktar drones purchased years before, but as the inventory is destroyed or lost
in battle more will be needed to replenish (Detsch, 2022). This is where Lockheed Martin can
step in with their unmanned aerial systems such as the Stalker, X-44, Polecat, and Dark star to
name a few that have been developed by the Skunkworks team, a division within the company
(Lockheed Martin Corporation, 2022). Since all the NATO nations are within proximity of each
other in eastern Europe spending over $1 trillion on defense, it only makes sense for Lockheed
Martin to expand facilities within the area, preferably in a NATO ally for security purposes. As
the battle continues in the region, the need for cutting-edge technology will only increase as
strategies are developed to bring an end to this conflict without resorting to nuclear options
(Routley, 2022). A popular weapon/product that is in high demand during the conflict is the
Javelin missile system. According to The Defense Post, there have been an estimated 5,500
Javelins delivered to Ukraine since the invasion began (Bisht, 2022). Currently, the weapon is
manufactured at Lockheed Martin’s Pike County Operations in Troy, Mississippi. The Javelin is
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the top item requested by Ukraine because of its effectiveness and would present an excellent
opportunity for Lockheed Martin’s expansion into the Eastern European NATO nations and
ramp up more production. According to a CNBC report, the United States has a commitment of
over $3.4 billion since last February and some of these funds could be used for the initial startup
of a facility with other NATO nations contributing to the funding. According to Lockheed
Martin, they have had a partnership with the German Bundeswehr, their version of the aerospace
and defense department for over 50 years and would be an excellent place to begin strategic
planning for the project (Germany, 2021)
Competitive Analysis
A competitive analysis of the proposal starts with the evaluation of the macro
environment, which unfortunately begins with the conflict in Ukraine. The conflict has spread
uncertainty throughout Europe as the reasoning behind Russia’s invasion has other nations
wondering if they are next. The purpose of NATO is brought under the spotlight and has been
given top priority by all the governments within the region to ensure their respective countries
have all their defense capabilities available and ready to defend. Competition for Lockheed
Martin does exist with Raytheon’s Stinger missiles which are used against Russian aircraft, but
according to CEO Greg Hayes during the last quarterly call with investors production will not be
able to ramp up until 2023 due to shortages in parts (Ben Fox, Associated Press et al., 2022).
Cooperative forces are strong within the industry and ironically the Javelin F-Model missile is a
joint venture project with Raytheon Missiles & Defense. The conflict could see even more joint
ventures with the issues involving supply chains, especially semi-conductors being in short
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supply. According to The Wall Street Journal, the United States senate has a pending bill for $52
billion to boost domestic semiconductor manufacturing and counter the Chinese technology
threat (Hayashi, 2022).
International Strategy
The international strategy that would economically and strategically work best would be
a “Think Global Act Local” transnational strategy. This fits the strategic planning of helping
produce the Javelin locally to help ease the logistics distance currently from the United States
and instead in Germany as previously stated. That Lockheed Martin already has a partnership
established with the German Bundeswehr will give Lockheed Martin a blueprint on the crossborder strategic move and how to proceed with the project on making it successful.
Diversification Strategy
The value of expanding into the international market is almost a necessity in order to gain
confidence from your clients to show knowledge of the world market and how it works. The
world market sector varies from country to country and each client requires a tailor-made
program depending on what their needs are. This begins with world-class engineering talent,
research, and its vast wealth of international business relationships. Lockheed Martin works best
with its current plan of using joint ventures to manufacture and create products using a $200
million evergreen fund that has invested in over 35 companies world-wide. US government
funding is expected to reach $33 billion for Ukraine alone, with $20 billion going to the
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country’s armed forces (Brennan, 2022). Part of this funding can go towards Lockheed Martin’s
research and development of not only Javelins but other defensive along with offensive
capabilities for Ukraine.
SMART Goals
SMART goals that can be presented would be the achievement of global expansion in
Eastern Europe with NATO members. This would be accomplished by expanding the joint
ventures we currently have with the German Bundeswehr by using US government funding to
develop and build new manufacturing facilities. This would help overcome the current logistical
supply chain issues that currently exist. The timeline for this plan can become implemented as
soon as government funding can be approved and passed by congress. This would be a long-term
plan with no foreseeable end as long as Russia and China present threats to the US and its allies.
The development of these types of products that Lockheed Martin researches and creates for
production will always be in demand as developing nations grow and see the need for their own
defenses against foreign threats. Any thoughts or theories of world peace by de-escalation and
disarmament have been shattered by the actions of Russia and constant saber-rattling from China
against Taiwan and surrounding nations. This has presented a sobering reality that nations can
hope for peace but in the same breath but also build a strong and capable defense to be ready to
defend against unwarranted incursions from other nations.
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SOURCES:
Bisht, I. S. (2022, May 3). Lockheed Martin to Ramp Up Javelin Production. The Defense Post.
https://www.thedefensepost.com/2022/05/03/lockheed-ramp-up-javelin-production/
Economic Impact. (2022, January 1). Lockheed Martin. Retrieved April 29, 2022, from
https://www.f35.com/f35/about/economic-impact.html
Germany. (2021, August 23). Lockheed Martin. Retrieved May 8, 2022, from
https://www.lockheedmartin.com/en-de/index.html
Ben Fox, Associated Press, Aamer Madhani, Associated Press, & Dan Huff, Associated Press.
(2022, May 3). Push to arm Ukraine may put strain on U.S. weapons stockpile. PBS NewsHour.
Retrieved May 8, 2022, from https://www.pbs.org/newshour/politics/push-to-arm-ukraine-mayput-strain-on-u-s-weapons-stockpile
Hayashi, Y. (2022, April 28). The Russia-Ukraine War: April 27, 2022. WSJ. Retrieved May 8,
2022, from https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-04-27/card/chipshortage-limits-u-s-s-ability-to-supply-weapons-to-ukraine
Brennan, D. (2022, April 29). How Joe Biden’s $33bn Ukraine War Plan Compares to NATO
Defense Budgets. Newsweek. Retrieved May 9, 2022, from https://www.newsweek.com/bidenukraine-russia-war-nato-defense-budgets-1702104
Small Business Innovation Research. (2022, April 12). Lockheed Martin. Retrieved April 30,
2022, from https://www.lockheedmartin.com/en-us/suppliers/sbir.html
Aerospace & Defense Market Analysis, Size And Trends Global Forecast To 2022–2030. (2022,
January 1). Https://Www.Thebusinessresearchcompany.Com. Retrieved April 3, 2022, from
https://www.thebusinessresearchcompany.com/report/aerospace-defense-global-market-report
Business Areas. (2021, March 11). Lockheed Martin. Retrieved March 26, 2022, from
https://www.lockheedmartin.com/en-us/who-we-are/business-areas.html
Directed Energy. (2021, July 15). Lockheed Martin. Retrieved March 26, 2022, from
https://www.lockheedmartin.com/en-us/capabilities/directed-energy.html
Thompson, A. (2019). Crafting & Executing Strategy: The Quest for Competitive Advantage:
Concepts and Cases (22nd Edition). McGraw-Hill Higher Education (US).
https://bookshelf.vitalsource.com/books/9781260157369