Lockheed Martin is a well-known aerospace and security organization in the world. The products of the company are classified in three business segments; missiles and fire control, aeronautics, space and rotary and mission systems (Lockheed Martin, 2021). The aeronautic division entails development of military and commercial aircrafts and unmanned air vehicles.
The missile and fire control segments is involved in production of missiles, both manned and unmanned vehicles and fire control systems. The rotary and mission systems section engages in the manufacture of commercial and military helicopters, ships and submarine, radar and other systems. The space segment is involved in production of satellites, missile and space transport systems.
Stakeholders are the people who have interest or benefits from the organization. The main stakeholders of Lockheed Martin are the stockholders, government, suppliers, customers, employees among others. These stakeholders have a direct influence on the company financial performance in the following ways:
Injecting or withdrawing investment funds
The investors, who are stockholders, give businesses money to carry out operations and funds to venture in new lines of business. If for example, the investors withdrawals their holdings in a company, then it means the concerned business will not have enough funds to carry out its operations. Also, if the existing stockholders do not increase their holdings and no new stockholders are on boarded, then the company will not have funds to support new investments. The Lockheed Martin Direct Invest is a program of the company that engages stockholders to reinvest their dividends and searches for new investors to purchase the organization shares (Lockheed Martin, 2021).
Increasing taxes and creating harsh business environment
The government regulates businesses through legislations. If the government agencies like OSHA that is concerned with ensuring employees are given good working conditions comes up with new laws to protect employees, then it means the company will have to spend more on employee’s wellness and thus affect financial position. For example, the government had put an export restriction legislation on F-22 aircraft, that barred the company from exporting the model to other nations. This made the company not to generate the funds through selling F-22 aircraft to nations with high spending habit like China (Schmidt A, 2014). Two, the government does impose tax on products. If the government increases tax charged on Lockheed Martin products, then it means the bottom line will be reduced.
Reduced government spending
More than 74% percent of Lockheed Martin 2020 income came from U.S government, who are the main clients, spending on defense. If the government reduces the spending, then the revenue of the company will directly reduce (Lockheed Martin, 2021). But, Lockheed Martin has been looking for new markets internationally but the competition is stiff. For the company to continue running smoothly the government must continue being its major customer. This is not healthy for a business with global reputation as it can collapse anytime the government shifts from buying from it.
Lockheed Martin external challenges
The number one challenge that Lockheed Martin faces is stiff competition from other American based defense companies like Boeing, Raytheon, BAE systems, Northrop Grumman, General Dynamics, among others, without forgetting international firms like those from Russia, France and Italy. Lockheed Martin has an uphill task of remaining competitive. The second challenge is political instability. The defense and aerospace field has so many political challenges. The nations Lockheed Martin carries trade with may have political instability and as a result working with those nations may be a big challenge beyond control (Erwin S, 2016).
Lockheed Martin Covid-19 Measures
The Covid-19 pandemic made many businesses operations to be affected due to lockdowns. The Lockheed Martin was not an option. To ensure the business operations continued uninterrupted the company employed several measures to ensure the customers were served on time. One, the employees’ health and safety was given a priority and thus employees were able to be productive and the company recorded 9 percent increase in its 2020 annual revenue despite the presence of the pandemic. Two, to ensure the suppliers continued to supply the much needed items, the company activated accelerated payment program of $ 2.1 billion to facilitate the suppliers (Lockheed Martin, 2021).
Stakeholders are the people who have interest or benefits from the organization. The main stakeholders of Lockheed Martin are the stockholders, government, suppliers, customers, employees among others. These stakeholders have a direct influence on the company financial performance in the following ways:
Injecting or withdrawing investment funds
The investors, who are stockholders, give businesses money to carry out operations and funds to venture in new lines of business. If for example, the investors withdrawals their holdings in a company, then it means the concerned business will not have enough funds to carry out its operations. Also, if the existing stockholders do not increase their holdings and no new stockholders are on boarded, then the company will not have funds to support new investments. The Lockheed Martin Direct Invest is a program of the company that engages stockholders to reinvest their dividends and searches for new investors to purchase the organization shares (Lockheed Martin, 2021).
Increasing taxes and creating harsh business environment
The government regulates businesses through legislations. If the government agencies like OSHA that is concerned with ensuring employees are given good working conditions comes up with new laws to protect employees, then it means the company will have to spend more on employee’s wellness and thus affect financial position. For example, the government had put an export restriction legislation on F-22 aircraft, that barred the company from exporting the model to other nations. This made the company not to generate the funds through selling F-22 aircraft to nations with high spending habit like China (Schmidt A, 2014). Two, the government does impose tax on products. If the government increases tax charged on Lockheed Martin products, then it means the bottom line will be reduced.
Reduced government spending
More than 74% percent of Lockheed Martin 2020 income came from U.S government, who are the main clients, spending on defense. If the government reduces the spending, then the revenue of the company will directly reduce (Lockheed Martin, 2021). But, Lockheed Martin has been looking for new markets internationally but the competition is stiff. For the company to continue running smoothly the government must continue being its major customer. This is not healthy for a business with global reputation as it can collapse anytime the government shifts from buying from it.
Lockheed Martin external challenges
The number one challenge that Lockheed Martin faces is stiff competition from other American based defense companies like Boeing, Raytheon, BAE systems, Northrop Grumman, General Dynamics, among others, without forgetting international firms like those from Russia, France and Italy. Lockheed Martin has an uphill task of remaining competitive. The second challenge is political instability. The defense and aerospace field has so many political challenges. The nations Lockheed Martin carries trade with may have political instability and as a result working with those nations may be a big challenge beyond control (Erwin S, 2016).
Lockheed Martin Covid-19 Measures
The Covid-19 pandemic made many businesses operations to be affected due to lockdowns. The Lockheed Martin was not an option. To ensure the business operations continued uninterrupted the company employed several measures to ensure the customers were served on time. One, the employees’ health and safety was given a priority and thus employees were able to be productive and the company recorded 9 percent increase in its 2020 annual revenue despite the presence of the pandemic. Two, to ensure the suppliers continued to supply the much needed items, the company activated accelerated payment program of $ 2.1 billion to facilitate the suppliers (Lockheed Martin, 2021).
