Thursday, 9 April 2015.
Northrop Grumman Corporation, which in the United States is a key company specializing in protection, commercial aerospace and information technology, and electronics. It was registered in January, 16
For the company, this is a major force, since reducing income from one section can be easily offset by income from other sections; thus, the liquidity position of the company is stable (Clawson, 2013). The company has 4 business segments that include electronic systems, aerospace systems, information systems and technical services. The business segment provides unmanned and unmanned aerial vehicles, spacecraft, microelectronics and laser systems. The information segment includes intelligence systems, information services and systems, as well as protection systems. The air space management systems, communications systems, maritime navigation systems, airborne radar and electronics, as well as protection systems, are in the electronics segment. The last section, which is a maintenance service, provides retraining, maintenance, logistics and training services. The last section is also a distinctive power. The diversified portfolio of products does not just offer market forces that are unfavorable by spreading business risks, but allowing the company to take advantage of the opportunities available in different industries. In the same way, diversification extends the company’s revenue streams (Knecht, 2014). The income from the four segments is also balanced in a balanced manner. These revenue streams are balanced, and they are a risk to business and allow the company to explore opportunities in existing and emerging markets
The company is heavily dependent on the United States Government for revenue. It ships either directly or through subcontractors from the US government, as well as several institutions. Revenues received from the Government include the sale of foreign military accounts for more than 90 per cent of total income. For example, in 2009, 2010 and 201, it was more than 90.3 per cent, 90.3 per cent and 90.5 per cent of total income, respectively. In the same way, there were no services or products offered by Northrop, which contributed more than 10% of the revenue for the same duration. The reorientation of the Government was risky, as it provided companies with different positions, as well as congressional and defence approvals. Moreover, there is also a risk that the Government may terminate contracts as a result of unforeseen circumstances. Business can also be given liability, which may have a negative impact on its ability to compete effectively with others. In addition, the organization can minimize the weaknesses by producing products that adapt to other institutions and private organizations. For example, in the security sector, it can develop electronic security systems, as well as support solutions for private security firms found throughout the United States. In the same way, it can use its capabilities in the servicing and manufacture of aircraft for the production of aircraft, other parts, as well as maintenance services for companies such as Boeing
The company provides employees with lifelong, medical and pension benefits. A large number of retired and current employees are covered by the pension scheme and pension scheme. During the financial year 2011, the amount of the projected pension liability was $24,129 million. The total value of the planned assets was $21.0 million, and the fair value of the planned assets was $21,340 million. (In thousands of United States dollars) (In thousands of United States dollars) (In thousands of United States dollars) SCHA. In the same year, the medical allowance and projected service life amounted to $1,289 million. SCHA. The costs and medical expenses associated with the Northrop’s pension benefit plans are based on numerous assumptions on the part of the company, which included discount rates for future rates and asset recovery rates. Costs are likely to increase as a result of the weak effectiveness of lower interest rates in financial markets and investment decisions that are unable to generate sufficient profits (The Brookings Institution, 2012). Liabilities for underfunded pensions are a drawback because the company is forced to transfer money regularly to the United States pension plan so that it can bridge the gap between assets and liabilities as a result of pressure on the liquidity of the company. The most ideal way to minimize weaknesses is to free from plans to take advantage of both current and retired staff. Under this approach, staff will not earn more than at the moment, and this will stop the growth of new commitments (Geisel, 2013)
A dimension that is in a common environment is called an economic dimension. It focuses on aspects of the economic system with direct influence on the business segments of the company. This includes purchasing patterns, consumer purchasing power, and cost patterns. In this dimension, the increased costs of aerospace and defence industries are of particular importance. A shared queue for a company includes accumulated and unfunded queues. Northrop’s total queue for fiscal year 2011 was $39.515 million, of which 50 to 50 percent was sold in 2012. In the United States, government orders, including those made by foreign governments, accounted for 87 per cent of the total backlog in 2011. Such a backlog in the company’s orders provided the company with the opportunity, as it pointed to the services and products of the company, the high demand in the market. In addition, the company also ensures a steady increase in revenues, which may further improve their market position
This is due to international and economic dimensions. In the past two years, the aerospace and defence industries have seen rapid growth. In addition, it is projected that the sector will record steady growth in years from the point of view of sales. Accurate forces are the increase in military spending, an increase in the number of international flights and the expansion of operations of commercial airlines, especially after the recession. Such forces are expected to increase defence and aerospace sectors. According to the survey of Market Watch (2013), the aerospace and defense industries are expected to total $1.204.2 billion by 2015. (In United States dollars) This opens up the possibility for the company, as it is one of the major players in the defense sphere, in particular, the military aircraft, information systems, surface ships, electronic systems and submarines. In the same line, the positive outlook suggests growth for the company in the medium and short term
It is a threat based on the technological and international dimensions of the common environment. The main forces are competitors. Northrop is competing internationally in different sectors. Similarly, technological advances have facilitated stiff competition with all actors in the defence and aerospace industries, trying to get out because technology is the most dependent. The company also faces competition from international and domestic players like Raytheon, BAE Systems, Lockheed Martin, and Boeing. Some competitors have advanced their production, engineering and marketing capabilities than Northrop’s capabilities. In addition, the current consolidation of the world’s aerospace, defence and space industries has led to increased competition, as well as a reduction in the number of major contractors (SEC, 2013). Thus, the competition will be tough for the company, and it may affect operations and revenue streams of the company negatively. With a large number of competitors seeking to obtain the same treaties, Governments are likely to reduce revenues
This is related to the economic dimension of the specific force and the general environment of unexpected price changes, especially changes in the level of raw materials, as steel. A significant portion of Northrop contracts with the United States Government are fixed-price contracts. These contacts have a specific area of work for a fixed payment amount. For example, in 2011, the fixed price of contracts was 41 per cent of the company’s annual profit (SEC, 2013). In particular, these development contracts are characterized by uncertainty and high risk. Thus, the cost estimates for the completion of the development phase are very variable. Businesses are at risk due to a contract failure, which may result in additional costs for the company. This may also adversely affect the company’s performance due to additional costs
Given the company’s reputation as the most excellent repository of modern aerospace, information technology and electronics on a globe, it can take advantage of the opportunities offered by the universal environment. The company needs to make sure that it places enough capacity to clear the calls and to gain customer confidence. In addition, contracts must be concluded in time for the company to incur no additional costs. Secondly, with an optimistic outlook in the aerospace and defense industries, it is expected that the company will step up its efforts to market and reach customers at both the international and national levels. This will enable the company to gain a significant share of revenue from the expansion of the sector while reducing excessive reliance on government contracts
As already noted, the main threats to Northrop faces relate to fixed-price contracts and broader competition. The company is able to neutralize the threat of competition by taking advantage of the competitive advantages it receives in the market. For example, the company maintains a contractual relationship with the United States Government