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 ...view middle of the document...
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...