Business strategies play an important role in an organizational structure. They influence the rates and quality of outputs, the management style of play, and the decision-making processes. Business strategies are strategies engaged by an organization with the intent to reinforce efficiency of operations. Lockheed Martin comprises an organization that employs various strategies in daily operations. Lockheed Martin is an American company that develops defense, security, aerospace, and other advanced technological components. The corporation was established in 1995 through a merger between the Lockheed Corporation and Martin Marietta.[Click Essay Writer to order your essay]
The organization has functional-level strategies, business-level strategies, corporate-level strategies and global strategies. Functional-level strategies are business frameworks that influence the alignment of management decisions to specific functional segments of the corporation. There are several functional-level strategies at Lockheed Martin. The first set of strategies address the marketing function in the organization. The company employs its websites, and social platforms to create awareness on their products and address client problems. Another functional-level strategy at Lockheed involves the recruitment of only the best talent into the corporation. In recruitment, the organization employs frameworks that reinforce diversity. The company further funds several research and development programs. [Need an essay writing service? Find help here.]
In addition, Lockheed Martin employs several business-level strategies. Business-level strategies are frameworks, which promotes an organization’s productivity above those of its competitors. They reinforce the need for provision of value to the final client. As a business-level strategy, the company subscribes to cost leadership. It ensures that it earns above-average returns on its capital investment. From cost-leadership, Lockheed Martin can earn abnormal profits on its sales. The company further engages differentiation. In extending value to the client, the corporation determines the price of the high-tech tool based on the quality of the material that was used. Another business-level strategy involves the company’s alignment towards sustainability. By reinforcing its reputation through branding, the company can differentiate themselves from other competitors in the market, and that gives it a market advantage. The low-cost framework limits the span and number of markets in which the company operates. Currently, Lockheed only engages the United States government. This framework allows the reinforcement of quality to the small target markets.
The Lockheed Martin Group further engages corporate-level strategies. Corporate-level strategies affect both the internal and external functions of the organizations. There are three types of corporate-level strategies namely value-creating, value-neutral, and value-reducing strategies. The Lockheed Martin Corporation aligns its operations towards the value-creating strategy. In the strategy, the company intends to secure a bigger market share. In recent times, the company has rebalanced its portfolio. The rebalanced portfolio allows the pursuing of innovation that can be used to produce equipment that is more efficient. The use of a rebalanced portfolio allows Lockheed to become leaner. This has been augmented further by the recent layoffs. The layoffs are part of the corporate strategy, which allows the company to save on production costs. Alternatively, the company efficiently allocates the resources available to it. As a corporate-level strategy, the company persistently expands into new markets. In recent times, the company has sought a wider market range. This enhances the efficiency of the internal capital market allocation. This is a good thing since a wider market translates to further revenue.
Lastly, Lockheed Martin Company is intent on reaching an increased number of clients in various countries, and this constitutes a global strategy. In an increasingly globalized setting, the Lockheed Martin Corporation is inclined towards venturing into new markets. This has been fueled further by the constant reduction in US federal funds, which comprise the main source of income for the corporation. To sustain production and growth, the company has had to venture into new and foreign markets. The company created an international platform, which addresses the needs of different clients. The company has further acquired an increased number of smaller companies to sustain production in recent times. The company further practices the vertical integration of services that allows it to diversify its productions into new security equipment. As a global strategy, the company invests in firms that are separate from itself. It further funds researches conducted by other nations. This creates a rapport with the country leadership and allows for the employ of the new market.
Current functional-level strategies of Lockheed Martin
Functional-level strategies refer to business strategies that reinforce the need for the alignment of the management decisions to specific functional areas of the subject entity. The functional strategies ensure that the company’s resources are extended the same regard as the overall output. Therefore, the functional level strategies view people, not as a means to an end, but as an end themselves (Bradley, 2016).
Lockheed Martin has several functional-level strategies. To begin with, marketing comprises a significant function of the organization. The company has a marketing department, which addresses the need for marketing. Through branding, raising awareness, and enhanced communications with potential clients. Essentially, the company employs its websites and social platforms to indicate their services, which in turn enhances the sales. The next functional-level strategies address the role and significance of human resource in the organization. Lockheed Martin focuses on recruiting the best talent into the company. Furthermore, the company is inclined towards the diversification of its human resource. Therefore, it recruits individuals from diverse cultures, perspectives, and talent to drive the operations of the organization. The company also offers an equal opportunity for progression to all employees. The organization further strives to ensure the development of focused business outcomes.
Lockheed Martin values research and development. In 2015, the company spent over $800 million in research and development programs. Research and development encourage innovation within the organization. Research and development further encourage the cohesion between the employees within the organization. The company has more than one research and development segment. This augments the efforts that are extended towards the development of modern equipment. It further allows for the extension of client-succinct responses.
Business-level strategies of Lockheed Martin
Business-level strategies are those that reinforce the need for a company to gain a competitive advantage over its competitors. Likewise, they are strategies that determine the frameworks that are to be engaged in the provision of values to the customers. The Lockheed Company engages various business-level strategies to further sales of its products. Firstly, the company is aligned towards cost leadership. The company builds a state of the art war and military equipment, and that means that its competitors cannot easily replicate the equipment. The organization reinforces internal efficiencies in the production processes. This serves to ensure that it gains above-average returns on the capital costs that were extended towards the production processes.
Likewise, the company engages in differentiation. This ensures that value is extended to the clients based on the features of the product and not solely the price. Essentially, the price of the product is often determined by the quality of the material used in the development of the equipment. The company engages the doctrine of sustainability. This involves the creation of market barrier on other competitors through reinforcement of perceptions (Higbee, 2013). The company employs its reputation to enhance differentiation. In this way, they differentiate themselves from other competitors in the region. Hitherto, the company has inclined itself towards the focused low-cost framework. This framework limits the number of markets that the company engages. The Lockheed Martin Corporation has predominantly sold its products to the US government. Sales to the US government make up for over 71% of the company’s total sales (Williams, 2014). The choice to engage only a small market allows the reinforcement of quality that is demanded by the target client.[“Write my essay for me?” Get help here.]
Current Corporate-level strategies of Lockheed Martin
Corporate-level strategies refer to the strategies that affect the entire organization. These strategies affect both the internal and external functions of the organization. They address the need for growth in the organization. There are three general types of corporate-level strategies. These comprise the value-creating strategy, the value-neutral strategy, and the value-reducing strategy. Lockheed Martin aligns its production processes towards the value-creating strategies. Value-creating strategies aim for the securing of bigger market share. This is often employed to edge out the competitors.
In recent times, the company has had a shift in the production processes. Lockheed Martin has a stronger rebalanced portfolio, which greatly enhances its competitiveness in the market. Rebalancing portfolio makes the company leaner (Arlington, 2016). This allows it to pursue specific groups’ equipment and thus enhancing the operational efficiencies of the output. Rebalancing portfolio further allows the company to pursue innovations that enhance its competitiveness in the market. The company has further strived to reduce the cost of production through layoffs. The layoffs are part of a bigger plan to reduce overall costs and enhance operational efficiencies. The company achieves financial economies through the efficient allocation of resources. The acquisition of and expansion of the Lockheed Brand in countries such as Australia, allows it capture more markets. The expansion further serves to ensure that it engages in the efficient internal capital market allocation. The company has become more focused than was the case in the past. In light of increased competition, the company limits itself to a wider market compared to the past. However, the wider market is comprised of only a few markets. This makes it easy for the company to address the needs of the divergent market.
Global Strategies of Lockheed Martin
Hitherto, Lockheed Martin has drawn most of its revenue from the US government. However, given the continued cuts in federal spending, the company has had to expand into foreign markets in recent times. This constitutes a global strategy. In 2013, 18% of the company’s revenues originated from international markets (Williams, 2014). At current, the company engages more than 70 countries. It further boasts over a thousand global business alliances (Williams, 2014).
In order to capture the global market, Lockheed Martin created an international platform. The Lockheed Martin International is a segment of the company that specifically increases the exposure of the company to the global markets. It further conducts researches on international markets where military expenditure is likely to increase in the future (Williams, 2014). The company has further been the subject of increased acquisitions in the recent past. This is intended to improve the company’s portfolio. In 2013, the company acquired the Amor Group, which has its headquarters in the United Kingdom. The acquisition cost the company $269 million (Schmidt, 2014). The company is intent on diversifying into other security segments. This constitutes the vertical integration of services.
Likewise, the company invests in firms that are separate from itself in more than one country. The company has repeatedly invested in technology and research companies in both Australia and the UK. This creates a strong relationship between the company and the subject country. The strategy, in this case, comprises the improvement of relationships between the Lockheed Martin Company and the target country. Increased partnerships allow access to a wider market and the responsiveness of the output to the needs of the consumers. Lockheed Martin remains one of the major players in the military equipment industry.
Arlington, V. (2016, March 15). Lockheed Martin Discusses Growth Strategy at Annual Media Day. Retrieved September 7, 2016, from Lockheed Martin
Bradley, J. (2016). Types of Corporate Level Strategy. Retrieved September 7, 2016, from Chron
Higbee, J. (2013, September 9). Marketing Strategies Lockheed Martin is using to succeed.Retrieved September 7, 2016, from Yahoo
Schmidt, A. (2014, October 31). Do acquisitions support Lockheed Martin’s growth strategy?Retrieved September 7, 2016, from Market Realist
Williams, J. (2014, July 27). Global Growth Creating Value for Lockheed Martin Shareholders.Retrieved September 7, 2016, from Seeking Alpha