Product Synopsis
This report is the result of SDI’s extensive market and company research covering the US defense industry. It provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news.
Introduction and
Landscape
Why was the report written?
The US defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the US defense industry.
What is the
current market landscape and what is changing?
With the US defense budget for 2012 valued at US$645.7 billion, the nation has the largest defense market in the world. Due to its high levels of military spending, a large number of opportunities are available to companies keen to supply the nation with defense equipment. However, the US defense budget, which declined at a CAGR of -0.77% during the review period, is expected to record a CAGR of -0.12% over the forecast period, largely due to the financial constraints caused by the global financial crisis.
With the US defense budget for 2012 valued at US$645.7 billion, the nation has the largest defense market in the world. Due to its high levels of military spending, a large number of opportunities are available to companies keen to supply the nation with defense equipment. However, the US defense budget, which declined at a CAGR of -0.77% during the review period, is expected to record a CAGR of -0.12% over the forecast period, largely due to the financial constraints caused by the global financial crisis.
What are the key
drivers behind recent market changes?
Threats from North Korea and Iran, modernization initiatives, an arms race with China and Russia, ongoing military operations, and the protection of allies are expected to drive the defense spending of the US. The US perceives a potential nuclear threat from Iran and North Korea, through their acquisition of long-range ballistic missiles. The tension between the US and North Korea further increased in November 2010, when the US criticized the attacks carried out by North Korea on South Korea.
Threats from North Korea and Iran, modernization initiatives, an arms race with China and Russia, ongoing military operations, and the protection of allies are expected to drive the defense spending of the US. The US perceives a potential nuclear threat from Iran and North Korea, through their acquisition of long-range ballistic missiles. The tension between the US and North Korea further increased in November 2010, when the US criticized the attacks carried out by North Korea on South Korea.
What makes this
report unique and essential to read?
The US Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017provides detailed analysis of the current industry size and growth expectations from 2013to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
The US Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017provides detailed analysis of the current industry size and growth expectations from 2013to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
Key Features and
Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2013to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
The report provides detailed analysis of the current industry size and growth expectations from 2013to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
The
report includes trend analysis of imports and exports, together with their
implications and impact on the US defense industry.
The
report covers five forces analysis to identify various power centers in the
industry and how these are expected to develop in the future.
The
report allows readers to identify possible ways to enter the market, together
with detailed descriptions of how existing companies have entered the market,
including key contracts, alliances, and strategic initiatives.
The
report helps the reader to understand the competitive landscape of the defense
industry in the US. It provides an overview of key defense companies, both
domestic and foreign, together with insights such as key alliances, strategic initiatives,
and a brief financial analysis.
Key Market
Issues
The US must modernize its aging fleet of equipment, such as fighter aircraft, helicopters, land defense systems, and maritime equipment; however, the rising unit cost of defense systems poses a challenge to procurement funding. The cost of military hardware is increasing due to technological advancements and a shortage of skilled labor in the design, engineering, and manufacturing sectors, coupled with the rising cost of input materials, such as metal. In addition, the per-unit overhead costs at production facilities increased due to a reduction in the number of units manufactured.
The US must modernize its aging fleet of equipment, such as fighter aircraft, helicopters, land defense systems, and maritime equipment; however, the rising unit cost of defense systems poses a challenge to procurement funding. The cost of military hardware is increasing due to technological advancements and a shortage of skilled labor in the design, engineering, and manufacturing sectors, coupled with the rising cost of input materials, such as metal. In addition, the per-unit overhead costs at production facilities increased due to a reduction in the number of units manufactured.
US
defense expenditure is expected to decrease from 4.1% of GDP in 2012 to 3.1% of
GDP by 2017, despite the engagement of the country’s troops in missions in
Afghanistan and many other countries worldwide. Overall, the country’s defense
expenditure is forecast to decrease from US$645.7 billion in 2012 to US$611.0
billion in 2017, leading to a reduction in procurement funding. Such a
reduction has had a negative impact on a number of defense projects, and has
resulted in delays and cancellations.
With
the US aiming to reduce the defense expenditure by US$34.7 billion during
2012-2017, and rising personnel and health costs, the country’s capital
expenditure on defense is anticipated to decrease. Furthermore, the government
is encouraging companies throughout the defense market to increase the
efficiency of the organizations and sell unprofitable units. As a result,
defense companies will be compelled to take greater risks and accept lower
profits on the limited number of available government contracts. Due to a
combination of the above factors, unemployment is expected to increase,
negotiations with suppliers and customers will become tense, and efforts to
reduce expenses will increase across the board.
Key Highlights
The US defense budget declined at a CAGR of -0.77% during the review period, to reach a value of US$645.7 billion in 2012. However, defense expenditure is expected to register a marginal decline of -0.12% in CAGR over the forecast period, declining to US$611.0 billion by 2017. Indeed, the government has announced defense budget cuts over the next five years, which will be achieved by reducing capital expenditure.
The US defense budget declined at a CAGR of -0.77% during the review period, to reach a value of US$645.7 billion in 2012. However, defense expenditure is expected to register a marginal decline of -0.12% in CAGR over the forecast period, declining to US$611.0 billion by 2017. Indeed, the government has announced defense budget cuts over the next five years, which will be achieved by reducing capital expenditure.
The
US homeland security budget is expected to value US$59.9 billion in 2012, and
registered a CAGR of 6.25% during the review period. However, it is expected to
register a CAGR of 1.91% over the forecast period and to reach US$63.7 billion
in 2017. Expenditure on homeland security in the US will be driven by factors
such as terrorism, organized crime, and illegal immigration. With the
government focused on protecting the nation from both man-made and natural
disasters, key growth opportunities are expected to emerge in the aviation and
border security market, particularly equipment relating to critical
infrastructure protection.
Despite
the impact of the global financial crisis, which led to military budget cuts
across the world, US defense exports continued to increase in 2011. As a
consequence of its highly developed domestic defense industry, the country
emerged as the largest arms exporter in the world. Furthermore, countries such
as South Korea, Australia, and the UAE are dependent on the US for procuring
advanced technology weapon systems such as fighter jets, missile defense
systems, and armored vehicles. Over the forecast period the US will continue to
be the largest arms exporter in the world, largely due to the increasing
defense budgets of some of its major allies, such as South Korea, Israel, and
Australia.”
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Report Details:
Published: Sep 2012
No. of pages: 230
Price: Single User License: US$ 1250 Corporate User License: US$ 3750
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