northrop grumman
TRANSCRIPT
Northrop GrummanPorter 5 Forces
Ruben Serrano, Steven Chan, Chris Nguyen, Kathy Suria
Competitive Rivalry
• Oligopoly Market
• Sustainable Competitive Advantage through Innovation
• Competitive Strategy through Diversification and Collaboration
Products and Services
• Naval (Cleveland Ship LLC)
• Aerospace (Boeing, Lockheed Martin)
• Radar and Sensors (General Dynamics)
• Other Services ( IT, Technical Services) (Base-X, Xe Services LLC)
• Subsidiaries and Partners
Buyer Power
• United States
• Federal - Military
• State - DMV
• Local - Law Enforcement
(Domestic)
Control OverQuantity, quality, length of time for contractPrice - budgetsQuality - standard testingDesign *Training PersonnelMaintain equipment through contracts - 8 year contracts
Contract
Buyer Power
• NATO
• Foreign Countries
• ITAR
(International)
(International Traffic in Arms Regulations)
Supplier Power• International Companies (Switzerland, France,
Canada, Italy & Australia)• Local Companies across the U.S.
- Sub-contractors (Smaller private companies)
• Use of Small businesses as well as Big businesses• Suppliers sectors: Naval, Aerospace, Electronic
Systems, Information Systems and Technical Services.‣ Ex. Aerospace
- LAI International (airframe components for the F-35 Joint Strike Fighter)
- PPG (PPG provides transparencies, coatings and sealants for the B-2 stealth bomber and E-2D Advanced Hawkeye aircraft)
• COTS (customer over the shelf) Laptops, Monitors, Servers, Software (Operating systems, Proprietary in-house applications, Enterprise Management Systems, Biometrics Data-housing)
• Supplier power is weak
- Not the only supplier; Many substitutes
- Switching costs are low
- Brands are not powerful
- Hundreds of suppliers
- Suppliers do not have capacity to enter NG’s Market
- NG has control:
‣ Quantity, quality, contract, price, design
Threats New Market Entrants
• Facing pressure from newly formed Cleveland Ship LLC (company formed by staff from many Cleveland Businesses)
• Cleveland Ship LLC has offered to purchase en?re Northrop Grumman Shipping building outright
• ‘Mul?-‐billion dollar’ business
• Defense Finance Bill in place by Senator Mary Landieu for Navy to purchase replacement vessels from Avondale (owned by Northrop Grumman)
• Threat to Infrared Business division (IRCM, infrared countermeasure)
• Northrop owns 20 percent of IRCM market
• Facing Threat from ITT corp. (founded as Interna?onal Telephone & Telegraph in 1920)
• Rela?vely old company that is diversified but specializes in water and fluids management
• Chris Carlson director for domes?c business claims ‘lots of untapped technology’
• Claims that incumbents such as Northrop Grumman have ‘not been taking advantage of current technology’
• Long start up process for IRCM business makes it difficult for new entrants
• Jack Pledger development director for Northrop Grumman “it takes about 10 years” to break into IRCM business
Threat of Substitutes
• Unmanned Aerial Vehicles (UAVs)
• Cyber Warfare - US Cyber Security Team
• DARPA (Defense Advanced Research Projects Agency)
• Hand of God
Thank You