Lockheed Martin (NYSE:LMT) | Competitors & Competition

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Lockheed Martin's broad portfolio of products and services competes against the products and services of other large aerospace, defense, and information technology companies, as well as numerous smaller competitors. Lockheed Martin often forms teams with other companies that are competitors in other areas to provide customers with the best mix of capabilities to address specific requirements. Cooperating with competitors is common in the aerospace & defense sector. For example, Boeing is a key competitor to Lockheed Martin but together, the companies own and operate Hellfire Systems, LLC which is a joint venture created to manufacture the AGM-114 Hellfire Missile. Also, Boeing and Lockheed Martin are both prime contractors on the F-22 Raptor defense program (F-22 no longer produced). The two companies also jointly own and operate United Launch Alliance LLC, which manufactures Delta IV and Atlas V launch vehicles for the U.S. Air Force National Security Space Launch (NSSL) (formerly EELV) program. Another example is the Javelin Joint Venture. Together, Lockheed Martin and Raytheon formed a joint venture to produce the Javelin Advanced Anti-tank Weapon System (a man-portable fire-and-forget weapon system used against enemy tanks, bunkers, buildings, small boats, and slow-moving helicopters).

The competition for foreign sales is subject to additional U.S. Government stipulations (e.g., export restrictions, market access, technology transfer, industrial cooperation, and contracting practices). Lockheed Martin may compete against domestic and foreign companies (or teams) for contract awards by other governments. International competitions also may be subject to different laws or contracting practices of other governments that may affect how Lockheed Martin structures its bid for the procurement. In many international procurements, the purchasing government’s relationship with the U.S. and its industrial cooperation programs are also important factors in determining the outcome of a competition. It is common for international customers to require contractors to comply with their industrial cooperation regulations, sometimes referred to as offset requirements, and Lockheed Martin has undertaken foreign offset or workshare/industrial participation agreements as part of securing some international business.

Principal factors of competition in Lockheed Martin's markets include: technical and management capabilities; the ability to develop and implement complex, integrated system architectures; affordability; financing and total cost of ownership; release of technology; past performance; and Lockheed Martin's ability to provide timely solutions.

A substantial portion of Lockheed Martin's business is awarded through competitive bidding. The U.S. Government increasingly has relied on competitive contract award types, including indefinite-delivery, indefinite-quantity and other multi-award contracts. Even if Lockheed Martin is successful in obtaining an award, the company may encounter bid protests from unsuccessful bidders on new program awards. Unsuccessful bidders may protest in the hope of being awarded a subcontract for a portion of the work in return for withdrawing the protest. Bid protests could result in significant expenses to Lockheed Martin, contract modifications or even loss of the contract award. Even where a bid protest does not result in the loss of a contract award, the resolution can extend the time until contract activity can begin and, as a result, delay the recognition of sales.

Lockheed Martin is experiencing increased competition while, at the same time, many of its customers are facing budget pressures, trying to do more with less by cutting costs, identifying more affordable solutions, performing certain work internally rather than hiring contractors, and reducing product development cycles. Recent acquisitions in the company's industry, particularly vertical integration by tier-1 prime contractors, could also result in increased competition or limit Lockheed Martin's access to certain suppliers. To remain competitive, Lockheed Martin must maintain consistently strong customer relationships, seek to understand customer priorities and provide superior performance, advanced technology solutions and service at an affordable cost with the agility that customers require to satisfy their mission objectives in an increasingly price competitive environment.

Top Competitors

Lockheed Martin's top competitors are BAE Systems, Boeing, Airbus Defence and Space (e.g. A400M vs. C-130J), Dassault (e.g. Rafale vs. F-16), Embraer, Eurofighter Jagdflugzeug GmbH, Leonardo, General Dynamics, Northrop Grumman, Raytheon, and Saab Group.

Sikorsky's main competitors are Bell Textron, Leonardo (formerly AgustaWestland), and Airbus Helicopters (formerly Eurocopter).

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