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Northrop Grumman Swot Analysis

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Northrop Grumman: Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis

Northrop Grumman: SWOT Analysis
Northrop Grumman is one of the world’s major defense contractors. Northrop Grumman Corporation information services and solutions to a variety of customers internationally. Its Information and Services business provides various command, control, communications, and intelligence support to United States government intelligence community, supports the U.S. integrated Missile Defense system and the Intercontinental Ballistic Missile Program, and offers infrastructure management, training and preparedness, and logistics management services. The Aerospace business designs integrated systems in the areas of battle space awareness, command and control systems, and more. The Electronics business produces high performance sensors, intelligence processing, navigation systems, and controls for shipping. The ships business designs and constructs nuclear powered aircraft carriers. The visualization of the company is to be the most trusted technologies and systems supplies that guarantee sanctuary.
A business analysis of Northrop Grumman Corporation, a global aerospace and defense technology company is presented, focusing on its strengths, weaknesses, opportunities and threats (SWOT) faced. Strengths include its strategically balanced portfolio of products and revenue streams. Weaknesses include its dependence on a single customer. Opportunities include the positive outlook for the industry. Threats include the declining defense spending by the U.S. government. Northrop Grumman primary competitors are Lockheed Martin, Raytheon, Boeing, and L-3 Communication. Most of company operations are with the United States government, more specifically, the Department of Defense and Intelligence Community. Also, it conducts business with foreign governments as well as domestic and international customers
Organizational Strengths and Weaknesses Northrop Grumman diversified portfolio and revenue from one section can be compensated easily by revenue from other sections. The company has 4 business segments which include electronic systems, aerospace systems, information systems and technical services. Manned and unmanned aircrafts, spacecraft, microelectronics and high laser systems are provided in the business segment. Intelligence systems, information services and systems as well as defense systems are provided in the information segment. Airspace management systems, communication systems, marine, navigation systems, air borne fire control radars and electronics as well as defense systems fall in the electronics segment. The last section which is technical services provides reconstitution, maintenance, logistics and training services. The last section is also the distinctive strength. A product portfolio that is diversified does not just offer market forces that are unfavorable through dispersal of business risks but makes it possible for the company to enjoy opportunities available across varying industries. These revenue flows are balanced and they reduce business risks and make it possible for the company to explore opportunities in existing and new markets.
The company is heavy dependence on a single customer for a significant portion of business. It supplies either directly or through subcontractors to American government as well as a couple of agencies. For example, if Northrop Grumman accounted 2009, 2010 and 2011 for 90.3%, 90.3% and 90.5% of the total revenues respectively. In the same manner, there was no single service or product offered by Northrop that contributed over 10% of the revenue over the same duration. The overreliance on government has proven to be a risk as it exposes the company to various regulations as well as congressional and defense approvals. There is also the risk that government might terminate contracts as a result of unforeseen circumstances. The business can also get exposed to material liability which can adversely affect its capacity to effectively compete with others. The organization also can minimize weakness through production of products that are tailor made for other agencies.
Opportunities and Threats Working for Northrop Grumman Information Systems division for 14 years I saw and heard the opportunities Northrop leadership expects of its growth to be in the international space. Northrop have not historically done as much international business as some of their peer competitors. It will create a greater opportunity for Northrop because the market for Northrop services and systems is pent-up demand globally. That’s what Northrop Grumman finding going into the international market. For instance, Northrop Grumman signed an agreement with London’s Metropolitan Police Service (MPS) to provide its CommandPoint application as the fore of MPS’s new command and control system (http://www.reuters.com/finance/stocks/NOC.P/key-developments/article/2799288). The competitive market threat that arises from the technological and international dimension of general environment. Northrop competes internationally across different sectors. Likewise, technological advancement has contributed to stiff competition with all players in the defense and aerospace attempting to come out as the best taking into consideration the field is technology intensive. The company also faces competition from international and domestic players such as Raytheon, BAE Systems, Lockheed Martin and Boeing. Some competitors have advanced their manufacturing, engineering and marketing capabilities as compared to those of Northrop. The competition therefore is stiff for the company and it can affect the operations and revenue streams of the company negatively. With a large number of competitors aiming for the same contracts by governments, it is likely the revenues will decline.
Summary
Northrop Grumman reputation as the most excellent repositories of sophisticated aerospace, information technologies and electronics on the globe, it can capitalize on opportunities that are offered by the universal environment. The company is supposed to make sure it puts into place enough capacity to clear backlogs as well as win customer confidence. Optimistic outlook in aerospace and defense sector, Northrop efforts in marketing and reach out to customers both internationally and domestically. This will make it possible for the company to capture a major share of revenues from the expansion of the sector while at the same time reducing the overdependence on government contracts. As I explain above, the main threats Northrop faces are related to fixed price contracts and broader competition. The company has the ability to neutralize competition threat by leveraging on the competitive advantages it enjoys in the market.
References and Citation 1. Tomkins, Richard. "Northrop Grumman delivers first shipset for Australian Growler" UPI, March 26, 2015. 2. Trimble, Stephen (26 March 2015), "DARPA selects two firms to compete for sea-based UAV", Flightglobal (Reed Business Information), retrieved 27 March 2015. 3. "Northrop Grumman KC-30 marketing web site". Northrop Grumman. Archived from the original on February 12, 2007. Retrieved February 16, 2007. 4. http://www.researchandmarkets.com/reports/2816432/northrop-grumman-corporation-strategy-brief

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