Lockheed Martins Acquistion of NationScape, Inc - Case Study Example

Lockheeds Acquisition of NationScape The acquisition of NationScape should give Lockheed more revenue security. Given that 70% of Lockheed’s revenue comes from defense contracts, the company is at a higher risk of revenue fluctuations whenever there are any changes in military expenditures (Petrescu & Relly 41). The acquisition would, therefore, enable Lockheed diversify its revenue and ensure it has more stable income. Despite providing military hardware, Lockheed would be a major global support services provider given its reputation across the world.

The company will win more contracts to lead peace negotiations in various wars in countries such as Afghanistan. The US, for example, combines more of diplomacy and military engagements known as soft power. By acquiring NSI, Lockheed should be able to provide support services for government agencies such as USAID and the United Nations agencies. Military stability support, reconstruction and security transition are major engagements for the department of defense. NSI will enable Lockheed to take advantage of government contracts aimed at promoting these engagements.

NSI will enable Lockheed to globalize its operations. Over 90% of Lockheed, staff is in the United States. This does not help the company to have a global outlook and therefore its revenues are constrained in the hosting country (Petrescu & Relly 73). NSI has operations in more than 50 countries across six continents and it is still looking to increase its operations in more countries in Asia and African region. Acquiring NSI will, thus, enable Lockheed have a global outlook, unlike its current position.

It will be easier for Lockheed to enter other non-traditional markets when it has this global outlook. Lockheed will also take advantage of the NSI staff located in different parts of the world. This will enable the company to expand its operations without significantly increasing its labor costs. Lockheed will make more money from engagements with the Department of State and development assistance, which had a budget off over $31 billion (Petrescu & Relly 123). In addition to the increased budgetary allocations, other customers such as the Department of Defense, international organizations such as NATO and allied foreign governments are also increasing their spending programs.

This means that Lockheed will be assured of a ready market since acquiring NSI puts the company at a competent position to meet the high demand. Increasing its global coverage should enable Lockheed to achieve its vital corporate strategies. This will lead to increased profits hence creating value for the shareholders since the company will demonstrate strategic, financial and operational fitness. NSI has nine top executives who have worked in the company for more than 5 years. These executives possess a collective average of 30 years’ experience in the industry.

Lockheed should also be able to implement its corporate strategies with help from these experienced executives. Lockheed’s growth potential is immense with the acquisition of NSI. In the years 2000 to 2006, NSI’s market share expanded by over 45% from its original market share (Petrescu & Relly 112). NSI’s growth will have a spillover effect on the acquiring company by helping it with its growth plans. Lockheed should take advantage of NSI’s supply chain management and an expanded market.

NSI has regional support in more than eight countries with a database of over 20,000 worldwide personnel (Petrescu & Relly 103). This will enable the company to mobilize easily in various parts of the world whenever their services are needed, since NSI has established protocols that will enable Lockheed to start operations at an extremely short notice.Works CitedPetrescu, Relly V. Lockheed martin. S.l: Books On Demand, 2013. Print.