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Revenue Opportunities and Stakeholder Mapping in the United Kingdom Naval Programs
Frost & Sullivan, June 2011, Pages: 70
Defence Suppliers in the United Kingdom Naval Market to Adapt to Budgetary Constraints
The Strategic Defence and Security Review (SDSR), commissioned by the British Government, intends to decide the future capabilities and size of the defence forces, against a backdrop of dwindling budgets. Although the SDSR has been heavily criticised for being done in haste, the outcomes of this review will determine the future capabilities of the country’s defence forces. The key challenge that the government faces is to retain the capabilities of the domestic defence industry, while cutting back on its conventional arsenal. The current focus in the defence establishment is on developing capabilities for global expeditionary operations with the United Kingdom aspiring to play a leading role in coalition operations.
“Ongoing major programmes related to aircraft carriers, Type 45 destroyers and astute submarines will sustain revenues over the long-term,” notes the analyst of this research. “The actual value of the vanguard submarine replacement programme will be known only after the main gate approval, which is expected in 2016, while procurements for the Type 26 frigate project is expected to happen after 2020.”
Defence Suppliers to Focus on Cost-effective and Innovative Solutions
The United Kingdom has one of the most evolved naval capabilities in Europe and it is anticipated that the Government will make every effort to retain the country’s naval superiority. Currently, however, British naval planners are struggling with an acute resource shortage. This has been compounded by recent engagements in Afghanistan and Iraq. It is believed that the United Kingdom Ministry of Defence (MoD) can no longer afford to have budgets that cover both conventional and specialist capabilities, equally. “The current economic turmoil and the budget deficit have created doubts over future spending commitment,” cautions the analyst. “Defence suppliers need to adapt to this new climate of austerity by providing cost-effective solutions.”
The current military operations of the country are mostly land based. Hence, an opportunity for urgent operational requirements (UOR) in the naval domain is limited. Promisingly for market prospects, however, the emphasis on interoperability with allies is increasing. This trend might create more opportunities for domestic defence manufacturers by opening up markets in allied countries. On the other hand, it would also create intensified competition in the domestic market as more and more foreign companies would flood in, seeking to leverage on the potential for revenue growth. “Absolute cost, sustainability and life time support are the future procurement priorities of the MoD,” concludes the analyst. “Domestic defence companies would not be able to benefit from economies of scale unless they supplement their order book with foreign sales or innovate.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- C4ISR
- Naval training and simulation
- Unmanned underwater vehicles
This Frost & Sullivan research service titled Revenue Opportunities and Stakeholder Mapping in the United Kingdom Naval Programs offers a comprehensive overview of market dynamics and offers strategic recommendations to market participants. In this research, Frost & Sullivan's expert analysts thoroughly examine the following segments in the naval defence domain: C4ISR, naval training and simulation and unmanned underwater vehicles.
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