By Leonard Fuld, ACI Faculty

It’s 2015 and change has quickly overtaken the aerospace and defense industries.

Among recent market pressures worth noting:

While the Raytheons and Lockheeds still run war games to help them win government contracts, they are going to require more agile approaches to assess the market, customers and competitors. And, as a result of these new market pressures, the Academy has experienced a surge of new students from this sector.

When Warren Buffett snaps up a Precision Castparts for unheard of multiples, you know he sees an upside for certain players.   The question I would like to ask Mr. Buffett at this moment is “Why now and how do you see Precision Castparts playing a larger role in this industry?” Buffett apparently sees opportunity in a consolidation industry.

These changes also offer new teaming and partnership options. Cloud-based systems, new tech service options and new ways to play this game suddenly become important when bidding on contracts. The old rules and traditional bundling and pricing strategies are morphing into new offerings.

The various courses, from Competitive Benchmarking, Competitive Blindspots to Anticipating Disruptions present a number of models highly useful in market challenges confronting Aerospace and Defense strategists and, in turn, CI professionals. Here are just a few tough questions our students enter the classroom asking:

  • How have costs among the newly merged rivals or new entrants altered bidding strategy?
  • Have assumptions changed in the industry and among the players? Assumptions that lead to creating new game rules, new approaches to bundling?
  • How have the relatively new tech players stripped away some of the value from the traditional hardware manufacturers?
  • Will you encounter a disruption in the next five or ten years that you are not prepared for, a disruption that could cause you severe loss of market share?

Aerospace and defense is a high stakes game. Despite a drop in the defense side of the equation, global revenues from commercial aerospace and defense tops $700 billion. It’s also a global game with many pieces that include a geopolitical overlay.

It’s just about 50 years since Boeing introduced its 747 and roughly the same period when Raytheon introduced self-guided missiles. Technology has advanced a great deal since the 1960s.   That said, the questions facing industry strategists today are perhaps less about the technology and more about the new face of competition and the changing political forces surrounding it.

If you want to compete successfully in aerospace and defense, not only do you have to develop timely intelligence but you also have to ask the right questions. The Academy will show you how to do both.   See you this Fall.