Free «Capstone: Lockheed Martin» Essay
Table of Contents
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- The Impact of the Company’s Mission, Vision, and Primary Stakeholders on Its Overall Success
- Five Forces of Competition and Their Impact on the Company
- SWOT Analysis
- Capitalizing on Strengths and Opportunities while Minimizing Weaknesses and Threats
- Strategies to Maximize Competitiveness and Profitability
- A Communications Plan to Market Strategies to All Stakeholders
- Corporate Governance Mechanisms and Their Effectiveness in Controlling Managerial Actions
- The Effectiveness of Leadership and Recommendations for Improvement
- Efforts to Be a Responsible Corporate Citizen
- Related Management essays
Lockheed Martin is one of the largest American corporations. Established in 1994 after the merger of two companies Lockheed Corporation and Martin Marietta, the firm has grown to be a formidable force in the industry where it operates. The company has its headquarters in Maryland and employs thousands of employees around the globe. Lockheed Martin includes four main sectors, namely global aerospace, advanced technology, security as well as defense. Presently, the company is the world’s principal defense contractor. At the same time, the corporation is one of the extensively publicly traded establishments in the USA. Since its inception, it has significantly risen in value. Moreover, its share value has grown as well since the time the company became a publicly traded corporation. Over the years, Lockheed Martin also acquired other companies, becoming one of the strongest businesses in the USA with branches in many other nations. Lockheed Martin's strength makes it one the companies attracting the attention of many, particularly in the defense and security sector. Thus, the study of the company’s mission, vision, stakeholders, and its SWOT analysis as well as the identification of the ways to maximize profitability can help identify the effectiveness of its leadership and show that the company strives to be an ethical corporate citizen.
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The Impact of the Company’s Mission, Vision, and Primary Stakeholders on Its Overall Success
Lockheed Martin's corporate mission and vision align with the company’s work and effort to be a leading global company that differs from other players in the industry. The mission statement is to be a company that offers solutions to its customers’ most complicated problems. At the same time, the vision is to be a global leader in helping clients strengthen the world's security, deliver quality services, and advance scientific discovery (Lockheed Martin, 2011). The company’s primary stakeholders are institutions, with financial corporations being the major ones. In its mission to offer solutions to complex problems, the company applies innovative approaches and employs only highly experienced employees to foster a trusted environment right from the customers and throughout its supply chain. Their vision to be a global leader has influenced the corporation’s growth to become one of the largest companies in the world and a global major military contractor. Having financial institutions as the major stakeholders also impacts Lockheed Martin's success. These institutions have the much-needed resources necessary for the success of this company (Neitzel, 2011). Therefore, the mission, vision, and the primary stakeholders significantly contribute to the overall success of the company, making it one of the global largest corporations.
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Five Forces of Competition and Their Impact on the Company
Porter’s model helps identify five major forces of competition that affect Lockheed Martin. One of these forces is the new entrants (Dobbs, 2014). This power affects Lockheed Martin through the new companies, such as Boeing, that increasingly obtain military contracts from the government. Together with this force, there is competitive rivalry that stems from a fierce competition in the technology industry. The consumer bargaining power, which is the third competition force, affects the corporation as well (Dobbs, 2014). With the company having a small customer base, consumers have a strong bargaining power, which brings some disadvantage for the company. At the same time, the corporation has many competitors that offer similar products. Given the availability of options, it is easy for consumers to shift to the competitor's products. This force is evident in the stiff competition for the government contracts. Lastly, the bargaining power of suppliers is another force that has some influence on Lockheed Martin’s business (Dobbs, 2014). Although the corporation manufactures its products, it also relies on suppliers for various things. These providers play a crucial role in how the organization prices its products.
Competition is good and bad at the same time. For Lockheed Martin, competition drives the company to be better by prompting it to develop better products. Furthermore, competitors entice it to shift its focus to acquiring private clients in an attempt to expand its rather limited customer base. However, competition also affects the company negatively. By increasing the struggle for government contracts, Lockheed Martin receives fewer contracts, which reduces its revenue and market share, ultimately affecting the value of its stocks.
The success of a business largely depends on their ability to identify its assets, flaws, prospects, and risks. Lockheed Martin’s strength includes having a strong backing and working relationship with the US Government. A huge percentage of the organization's revenue comes from the government contracts. Additionally, the company has diversified its operations by having separate sectors dealing with different things. Such a diversification is important in that should one division fail, others remain operational. Since its inception, Lockheed Martin has maintained a consistent and positive financial growth, becoming the preferred choice for many investors. Another major strength of the corporation is that it mostly gets into long term contacts that guarantee revenue generation for more extended periods. Additionally, even though it has a smaller customer base as compared to many other companies, Lockheed Martin's customer base is stable.
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Despite its abundant merits, the enterprise has also its weaknesses. One of the major weaknesses comes from the fact that the business receives the majority of its revenue from the US government. Having most of its military contracts come from the government makes the company vulnerable to the government’s decisions, such as cutting on military expenses, as they have the potential to reduce the company’s revenue significantly. Nevertheless, the company has also numerous opportunities to capitalize on to generate even more revenue. Being a world’s top military contractor, Lockheed Martin is at advantage due to the rising need for defense in many nations as it is caused by the ever-increasing terrorist threats. Additionally, many nations now modernize their military operations, thus giving the company an excellent opportunity to provide its advanced technology to such countries. Finally, the major threats facing the company arise from its vulnerability to the US government’s reduced spending in military operations, a change in regulations, and the competition from other states.
Capitalizing on Strengths and Opportunities while Minimizing Weaknesses and Threats
From the SWOT analysis, one can see that being a global force, Lockheed Martin has numerous opportunities to take advantage of its strengths. Firstly, the company has the government as its primary client. Additionally, even though its customer base is small, this clientele is quite stable. Consequently, the company should capitalize on increasing the number of its clients. The management should also focus on attaining private customers to cushion the company from fluctuations resulting from the government’s decisions. With the current threat of terrorism threat facing many nations, Lockheed Martin should also work on obtaining contracts with foreign governments to supply security apparatus to these countries. Additionally, since many nations modernize their military operations, the company should use this trend for its benefit by providing these services to them (Neitzel, 2011). At the same time, the corporation can minimize its risks and threats by eliminating its reliance on the government for revenue and focus on private clients. Such a reliance places the company at risk of decisions that affect military and security operations. The business should also focus on and ensure that it maintains sound financial records to attract more clients. The company should also ensure that its technology remains up to date if it wants to keep up with the increasing competition from other rising companies.
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Strategies to Maximize Competitiveness and Profitability
There exist various competitive strategies that a company can employ at different levels to maximize its profitability and competitiveness. Since Lockheed Martin specializes in manufacturing products, it can focus on investing in low-cost production to give them a competitive advantage over its competitors (Hitt, Ireland, & Hoskisson, 2012). Unlike some countries that have a reputation of being low-cost manufacturing states, the USA has a relatively high cost of production. Therefore, when competing with a company sourcing from these low-cost manufacturing nations, Lockheed Martin might be forced to price its products higher that its competitors. At the planning level, the company could focus on differentiating itself and its products from those of competitors. Achieving this would require the company to manufacture products that meet the needs of consumers and those that target customers can easily identify. When marketing its products, Lockheed Martin should ensure that its marketing strategy is aimed at potential buyers and not the general population. In the defense and security sector, the company could target those governments that want to modernize their defense departments and those private companies that offer security services. Promoting to a particular group has a greater success rate as compared to untargeted marketing. In Lockheed Martin’s case, a focus on private enterprises will help improve its rather limited customer base.
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A Communications Plan to Market Strategies to All Stakeholders
Stakeholders are a fundamental part of a company. They can shape a corporation's success. Consequently, before any final decisions are made, a proper communication with this critical group of people is essential. In this case, Lockheed Martin’s major stakeholders are institutions. Consequently, the company should make use of the formal channels of communication to relay the message to its stakeholders. Such channels include facilitating meetings since they are among the most shared and efficient ways of communication with the appropriate audience. Additionally, the company can publish some of the intended strategies in newsletters and distribute them to these individuals and institutions.
In communicating with stakeholders, it is important to ensure that communication is not done for the sake of discussion. Such messages must contain the actual objectives of the company coupled with transparency. Additionally, the company should make a map of its stakeholders and show how they interact with the enterprise. This can be done by clarifying the role and importance of stakeholders (Timm, Hum, & Druckenmiller, 2016). Furthermore, the messages should be structured in such a way that they fit all stakeholders. While selecting the communication channel for different stakeholders, the company should consider the potential outcome of each method. A room for feedback from the interested parties must be left as well as some room for engagement.
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Corporate Governance Mechanisms and Their Effectiveness in Controlling Managerial Actions
In companies dealing with defense operations, decision-making is involved since poor decisions can cost the company dearly. Additionally, with the government being the primary client for security and defense sector, the governance strategies that Lockheed Martin adopts significantly affect its chances of acquiring such important contracts. The company assumes value–driven management. Taking a value-based approach translates into distinct and shared values in the corporation instead of focusing on external measures and rules. Additionally, the adoption of such a strategy results in self-regulation and self-governance, thus leading to a better outcome. Furthermore, in its governance, Lockheed Martin applies an ethics program policy to govern operations in the company (Gonzalez-Padron, Ferrell, Ferrell, & Smith, 2012). In modern world, especially when dealing with the government, it is possible for a company to get politicized. However, with the presences of ethics program and value-driven management, the company has remained stable and partisan in political issues. In Lockheed Martin, ethical program does not focus on how operations should be done in the perfect world. Rather, the program concerns making sure that employees follow the set regulations and policy of the company and that the management detects irregularities in any activities of employees. However, the program can create tension where the policy contradicts the values and beliefs of the employees. Nevertheless, the company has managed to maintain the right working environment and achieve its goals over the years.
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The Effectiveness of Leadership and Recommendations for Improvement
Lockheed Martin developed into a leading global company. For this to happen, effective leadership is required. Given that the majority of its stakeholders are institutions, the company has a board of directors responsible for decision-making. The organization’s leadership does not focus merely on achieving results, but they focus on attaining the right results (Lockheed Martin, 2011). The commitment to the company’s leadership exemplifies the importance of adopting a culture of business results, based on profound personal honesty, responsibility, and brilliance as well as strong critical thinking abilities, communication, and teamwork. The leadership of Lockheed Martin is also committed to the mission and vision of the company, and they focus on making the company a leading global enterprise. Despite the effectiveness and success of the company, the management still has room for improvement. Although the nature of Lockheed Martin’s activities necessitates the need for strict rules, a regulations and ethics program, the management should ensure the shift of focus from governments as the main clients to include other private corporations that may need the company’s products and services.
Efforts to Be a Responsible Corporate Citizen
Lockheed Martin puts efforts to be not only a globally recognized company but also an ethical citizen. In being a good citizen, the company assumes its social responsibilities concerning its internal and external stakeholders and society as a whole (Lockheed Martin, 2011). Lockheed Martin is one of the socially responsible corporations in the world today. In a bid to be an ethical citizen, the corporation has a strict ethics program. The nature of its operations necessitates this program to avoid the government’s involvement in the company’s internal affairs. This initiative is the company’s attempt to show itself as ethical corporate citizens and as a transparent corporation. At the same time, since companies have a social responsibility towards society, Lockheed Martin also engages in various activities of such kind. Thus, it employs people from all walks of life, thereby promoting diversity. Additionally, the company empowers its employees and builds a safe working environment for them. Furthermore, the company is committed to using resources wisely to avoid overexploitation and ensure that its products have the minimum possible impact on the environment. The company also engages in an initiative to reduce carbon emissions, and it has achieved a 30% reduction in absolute carbon emission. It also made 23% reduction in water usage and 39% in land-waste fill (Lockheed Martin, 2011). Additionally, the company participates in numerous philanthropic activities and donates generously to technology and innovation.
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Lockheed Martin is the world's biggest military contractor. The enterprise has a mission of providing solutions to its customers’ complex problems and a vision of being the world’s leader in ensuring security as well as delivering quality services and advanced technology. The company has institutions as its primary stakeholders. However, Lockheed Martin faces competition from other enterprises, international companies, and it is vulnerable to the government's move to regulate security technology. From the SWOT analysis, one can see that the company has a small but stable customer base and a good working relationship with the US government. At the same time, the company has diversified operations and it receives contracts that guarantee long-term revenue. The principal weakness is reliance on the government for revenue, which is also a significant threat to the company as it is bound to suffer when the government imposes legislations affecting military operations. The opportunities rise from the current terrorism threat, the modernization of the military in many countries, and private clients. The company can maximize its profitability through embracing low-cost production, differentiating itself, and targeting private clients. It adopts value-driven management and a strong ethics program in its governance. Still, the company should reconsider its focus on the government as its primary customer. Finally, Lockheed Martin an ethical citizen with a solid social responsibility.