Mba580

Strategic Analysis, BAE Systems

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University of Phoenix

Strategies for Competitive Advantage MBA/580

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Executive Summary

Governments around the globe spend billions of dollars each year on items designed to exterminate human beings. Everything from small-arms ammunition to intelligent “smart” bombs has been produced in prodigious quantities. Most of these products though do not come cheap. The U.S. Government is one of the largest if not the largest spender on defense related products and services (Shaw, 2008). This enormous spending has attracted many different international defense contractors, each one competing alongside US contractors for defense dollars. Lately though, many US firms and members of congress has started questioning the Department of Defense (DOD), when a large award is handed out to a non-US firm when US companies have the ability to produce the product at comparable prices. British Aerospace Systems (BAE), a British firm, receives approximately 50% of its annual income from US defense spending and will be directly impacted if congress eliminates non-US firms from competing for defense related contracts. Therefore, it is the opinion of this paper that BAE must begin to investigate alternative avenues of research besides defense related that will become just as remarkable in terms of potential income as the defense industry has become, and be of a technology that will allow BAE to become that industry’s technology source-expert.

Company Background - BAE Systems

BAE Systems (BAE, 2008) develops and builds some of the worlds most effective and advanced combat vehicles, munitions, submarines and air superiority platforms. A sampling of the product line include the Challenger 2 Main Battle Tank, which is in use by the Royal Tank Unit of England and the Bradley Fighting Vehicle which is currently the mainstay armored vehicle of the US Army. BAE Systems is the 3rd largest Defense contractor in the world providing development and support for advanced defense and cutting-edge aerospace systems for flight platforms, ground systems, and sea-going vessels. BAE Systems has operations in 5 continents and customers in over 100 countries. Some of these customers include the United States of America, Britain, Australia, Mexico, and many other Governments around the globe. Mainly a provider of military and defense related products; BAE Systems also provide several products geared towards the civilian sector; such as regional aircraft leasing, spares, and servicing management, though these areas represent a very small sector of BAE’s overall business units. BAE Systems has a very rich history of innovation and inventions. The early parent company of BAE can be traced back to the Royal Gunpowder factory of 1560. British history makes associations between the Royal Gunpowder factory and the explosive ships Queen Elizabeth used to defeat the Spanish armada in 1588. The British Aircraft Corporation, another company that made up early BAE is responsible for the design and manufacture of one of the most famous planes in aviation history; the Concorde supersonic passenger jet. Rolls Royce, once the most famous limousine in the world but now bankrupt, sold their jet-engine component to Vickers Defense, which was later acquired by BAE. Rolls Royce at one time was called Alison Engine, the maker of many of the radial aircraft engines used in British aircraft in WWII.

Modern-Day BAE

Modern-Day BAE is now a collection of over 100 companies with 1000’s of inventions to their credit. The major structure of BAE is divided into 12 distinct business units, with 6 centered on defense as the major business units of the company.

- BAE Systems Australia - Military systems for Australian Defense.

- BAE Systems Products Group - Single-Source Provider of Security Solutions.

- CS&S International - Development of new market opportunities.

- Customer Solutions - provider of integrated information technology.

- Electronics & Integrated Solutions - Electronics for military and commercial applications.

- Integrated System Technologies (Insyte) - Time critical decision-making systems.

- Land & Armaments - Land and Armaments is made up of five lines of business: Armament Systems, BAE Systems AB, Ground Systems, Land Systems and Mobility and Protection Systems.

- Military Air Solutions - Military Air Solutions provides advanced military air capability.

- Regional Aircraft - Total integrated aircraft support.

- Shared Services - Delivers internal support and specialist services across BAE Systems and its partner companies.

- Submarine Solutions - Designing, manufacturing and commissioning of nuclear submarines.

- Surface Fleet Solutions - Surface Fleet Solutions works with partners and customers to deliver surface warships.

Vision, Mission and Values Statements

BAE has 12 distinct business units, each as large as most normally sized firms and each with their own vision, mission and values statements. Listing all 36 statements would risk losing the reader during a very important section of this paper. Therefore, specific business unit statements have been selected which communicate the true position of BAE as a whole.

Land and Armaments Vision

“To be our customer’s premier choice. To secure and further develop the position as BAE Systems European Development centre for light and medium weight military vehicle systems. To be an important contributor to BAE Systems AB. To grow with maintained profitability.”

Shared Services Mission

“We are committed to becoming world leaders in health, safety and environmental management by providing a world-class working environment for our employees.”

Values Statement

“At BAE Systems our vision is to be the leading systems company, innovating for a safer world and to achieve this we