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Revenue Opportunities and Stakeholder Mapping in the United Kingdom Land Defence Market
Frost & Sullivan, Dec 2010, Pages: 84
The United Kingdom's operations in Iraq and Afghanistan have exposed the gap between the country’s cold war era capabilities and the capabilities to counter contemporary threats. The UK land defence domain witnessed significant procurements as result of urgent operations requirements (UOR). Also the country faces a huge defence budget deficit. Facing a pressure to make significant financial savings, the present government had commissioned a strategic defence and security review to tackle this looming issue. The outcomes of this review will determine the future capabilities of the country. This study provides crisp details about the significant revenue opportunities that exist within the British army and the associated stakeholder maps
Research Overview
This Frost & Sullivan research service titled Revenue Opportunities and Stakeholder Mapping in the United Kingdom Land Defence Market provides details about the revenue opportunities that exist within the British army and associated stakeholder maps. In this research, Frost & Sullivan's expert analysts thoroughly examine the following segments: soldier modernization, land vehicles, unmanned ground vehicles, command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) as well as land training and simulation.
Market Overview
The United Kingdom Presents Considerable Business Opportunities for the Land Defence Market
With an expenditure of $58.30 billion in 2009, the United Kingdom ranks fourth in the list of top military spenders, making it a viable market for stakeholders in the land defence market. As a member of the North Atlantic Treaty Organisation (NATO), the United Kingdom is expected to channel at least 2 per cent of its gross domestic product towards defence. The country’s crucial role in the major global conflicts in Iraq and Afghanistan has exposed the gap between its cold war era capabilities and its readiness to counter contemporary threats. Therefore, Britain has had to equip itself with specialist and modern capabilities to have an edge in the current operations. The Government has acknowledged the need to modernize its fleets and has expressed interest in ramping up its arsenal, however, the current economic situation and budget deficits could prove to be dampeners. The U.K. land defence domain witnessed significant procurements as result of urgent operations requirements (UORs). Nevertheless, the priority given to the UORs and the huge budget cuts have delayed most of the planned modernisation programs.
“As a conscious measure to avoid the drawbacks of downsizing, the armed forces are being equipped with advanced equipment,” says the analyst of this research. “The increasing involvement in high-intensity operations and lessons learned from the recent conflicts would push the country to deploy advanced and more efficient equipment.” Furthermore, the Government has commissioned a Strategic Defence and Security Review (SDSR), 12 years after the last one, to determine the future capabilities and size of the country’s land defence forces. While military downsizing is apparent in all domains of the defence forces, the army is expected to be the least affected due to the current operational commitments, while the navy and air force will keenly feel the impact of the SDSR. The gradual shift from UOR to planned modernisation programs in the land defence domain is expected to boost the market from 2013. Hence, defence companies catering to UOR at present should slowly start gravitating towards the upcoming modernization programs and identify possible market opportunities.
In future, the number of ground formations in the U.K. army is expected to nosedive. This will invariably have significant repercussions on the procurement volumes. In such a scenario, the domestic defence companies will not be able to benefit from economies of scale, unless they supplement their order book with foreign sales or innovate in-house. Defence companies must ensure low-cost offerings since absolute cost of equipment will be one of the primary purchase factors. “Absolute cost, sustainability and life time support are the future procurement priorities of the Ministry of Defence (MoD),” notes the analyst. “Capabilities such as autonomous systems, sensors, cyber and space are likely to be the focus of future investments.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Soldier modernisation
- Land vehicles
- Unmanned ground vehicles
- C4ISR
- Land training and simulation
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