Assessing The Leading Position At Lockheed Martin Commerce Essay

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Lockheed Martin has established a leading position concerning many sectors, ranging from financial achievements to outstanding technology. First of all, LMT is the leading defence contractor in the world with revenues of $42,731 million in 2008, as shown in Table 1 (3), having succeeded in achieving for 24 quarters positive cash flows from its operations. More specifically, LMT is the largest USA federal contractor with almost 84% of its revenues deriving directly from Pentagon orders (4). Furthermore, Lockheed Martin is the largest single provider of Information Technology services to the U.S. federal government (5). At this point, it is important to clarify that Lockheed Martin achieves a greater annual turnaround compared to other aerospace and defence companies such as Boeing, EADS and United Technologies. This is because the latest, unlike Lockheed Martin, achieve substantial revenues mainly from civilian products while LMT focuses on military applications.

Secondly, Lockheed Martin is worldwide renowned for being a product leader in the aeronautical domain. It is remarkable the fact that the company has been awarded with the Collier Trophy in 2001 and in 2006. This particular reward is administered annually by the U.S. National Aeronautics Association (NAA), to those who have made "the greatest achievement in aeronautics or astronautics in America, with respect to improving the performance, efficiency, and safety of air or space vehicles, the value of which has been thoroughly demonstrated by actual use during the preceding year" (6). In 2001 LMT was rewarded with Collier Trophy for taking part in the development of the X-35/F35B LiftFan Propulsion System which is described under the US patent 5209428 (7) (8). Additionally, in 2006 the Collier Trophy was rewarded to Lockheed Martin for leading the development team of the innovative F-22 Raptor fighter jet. To be more specific, the bottom line is that Lockheed Martin is the world leader in aeronautical stealth technology. It is obligatory to refer to the world acclaimed F-117 Nighthawk (see Picture 1), the first operational aircraft that was introduced by LMT and which was designed to incorporate the revolutionary platform of "stealth" technology (9). Nowadays, LMT has introduced the stealth technology to the new generation aircrafts, the world's premier 5th generation fighters, the F-22 Raptor and theĀ F-35 Lightning II.

Long-term goals

To begin with, Lockheed Martin has demonstrated throughout its corporate history that its primary objective is to establish "Market Dominance" through enduring global presence as a means of significant customer relationships, and strategic partnerships with "sophisticated", high-tech companies in the worldwide scene. The willingness of the executive management is Lockheed Martin to be regarded in the long-term as a trustworthy, innovative solution provider to potential customers, and a significant performer in establishing robust industrial alliances that can assure future growth for the involved parties.

To further extend the former goal, LMT seeks to match corporate breadth with customer priorities. Lockheed Martin recognizes the vital role of its customers' satisfaction as a key element that can reassure the prosperous future of the company. Therefore, the Company remains firmly committed to providing customers with effective, breakthrough solutions that are required to address their most complex challenges. These principles are best expressed by the corporate vision of Lockheed Martin: "Powered By Innovation, Guided By Integrity, We Help Our Customers Achieve Their Most Challenging Goals." (2). The persistence of LMT towards the fulfilment of its vision dictates the necessity to be consistent with its endorsed values: "Do What's Right, Respect Others, Perform With Excellence" (2). The loyalty that the U.S. Government demonstrates towards the LMT, especially after a decade in which terrorism actions have faced a significant rise, simply affirms the fact that Lockheed Martin is dedicated to its fundamental values.

The goals of "Market Dominance" and "Customer Satisfaction", besides assisting in explicating the strategy of Lockheed Martin, it serves primarily in motivating the employees and the fellow workers towards common goals. These specific goals create a sense of purpose and stimulate awareness and knowledge amongst the workforce towards which it is being directed. Simultaneously, by clearly indicating its desired competitive position, LMT tries to persuade rival to direct their efforts elsewhere.


Lockheed Martin intends to enhance its international presence and extend its current customer base. In 2008 the company was operating in 584 locations that were accommodating all the company's proceedings, including offices, manufacturing plants, warehouses, laboratories, service and research centers etc. Lockheed Martin owned only 45 (29 million-sq. m.) of these locations, whereas the 539 (27 million-sq. m.) locations were rather leased (1). All the facilities designed to fit into the local architecture and share common information systems.

The company is mainly engaged in four basic business areas: Aeronautics, Electronic Systems, Information Systems & Global Services, and Space Systems. An inclusive list of the areas in which Lockheed Martin provides both experience and expertise is presented in Table 2. The corporation's range of product and service offerings is broadening continuously to cover all the operational needs of both the U.S. Government & allied nations and other private agencies. However, LMT, unlike competitors as Airbus and Boeing, does not implement solutions concerning civilian applications. Along with providing technology into market, LMT also develops robust environmental, safety and health programs which are substantial the corporation's success.

Competitive Advantages

Lockheed Martin occupies a great variety in the sources of competitive advantages. In order to achieve its goals within its chosen scope, LMT facilitates the following key sources:

The large scale of the company

The committed employees

The business's prime locations

The wide range of business areas

Low cost in-house operations

Unparallel technological depth


Customer awareness of the LMT name and reputation for the delivered products, services and value


To begin with, Lockheed Martin in order to retain its leading position in the market focuses in providing "cutting edge" technological solutions over a broad range of business areas (2). Moreover, it indulges after sales services and support, while simultaneously keeping manufacturing and R&D costs at low levels. Most significantly, LMT throughout the years has succeeded in providing "whole products" that incorporate the company's offerings (11), and thus has become very attractive to customers and managed to gain their loyalty.

Notwithstanding, in order to deliver disruptive technology and advancements LMT reassures that it possesses all the necessary tools and technology "know-how" to conduct research and implement systems and services to fulfil the customers' aspirations over their vital missions. To deliver its integrated solutions, LMT has established its own Advanced Technology Centre in Palo Alto, California, the so called "Centre for Innovation", a non-centric experimentation laboratory in which is undertaken extensive analysis, modelling, visualization, simulation and experimentation over disruptive technologies. The most remarkable is the fact that in order Lockheed Martin to develop integrated, non-centric solutions, it requires from its customers to collaborate actively with the highly capable specialists in the proprietary Centre for Innovation, as this is equipped with the necessary resources to test any ideas and concepts. In addition, LMT incorporates many other laboratories and initiates an amount of Advanced Development Programs (ADP), such as the legendary Lockheed Martin Skunk Works (12), to closely collaborate with the customers and pay great focus on their needs and demands to deliver solutions of the outmost performance.

Apart from the above, Lockheed Martin provides as well after sales services, such as training and support, maintenance and overhaul services, upgrades and modifications, supply chain management and sustainment engineering. Due to this customer intimacy, LMT has increased awareness about its firm and has achieved throughout the years to create a good reputation and a strong cash position. This financial strength allows LMT to delve targeted acquisitions, around the world, which add value to the portfolio of its capabilities and are consistent with the core and closely adjacent businesses. What is more, acquisitions help LMT extend its logistics and business process outsourcing capabilities, penetrate unexplored markets and fortify relationships with existing customers.

To beat competition, Lockheed Martin has managed to combine low cost in-house operations with the highest level of performance. To do so, LMT for the last seven years is committed to its Lean 21 disciplines and Six Sigma strategy. The most significant is that LMT has adopted a unique appraisal method, the so called Continuous Appraisal Method (CAM) that enables LMT to reduce its appraisal costs by on-site process documentation and implementation artifacts to identify any weaknesses in the overall company's processes (13).

Finally, all these accomplishments derive from the corporate culture that enhances talent development of its highly-skilled employees, so as to break down any barriers that inhibit teamwork and thus enabling LMT to deliver effective solutions to its customers. On its campus of the Bethesda headquarters, LMT has establishes the "Centre for Leadership Excellence", a facility which primary purpose is to provide professional improvements and an appropriate environment for meetings with customers and shareholders.


To sum up, Lockheed Martin's leading position in the security domain has been established around core concepts such as a) uncompromising technological innovation, b) deep recognition of customers' needs and vision, c) talent development, d) operational excellence, and e) financial discipline. It is the consistent performance over the majority of the programs that LMT is involved in that helped the company to sustain its momentum and follow paths of growth through the years and especially in the current economic downturn.