Future of the US Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

  • ID: 4542998
  • Report
  • Region: United States
  • 241 Pages
  • Strategic Defence Intelligence
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FEATURED COMPANIES

  • Bell
  • Boeing
  • General Dynamics
  • L-3 Technologies Inc.
  • Lockheed Martin
  • Northrop Grumman Corp.
  • MORE

Being the largest defense spender in the world, with a budget of over US$639 billion in 2018, the US is expected to sustain its superiority over other nations in the coming years. The US defense expenditure is expected to grow at a CAGR of around 1.98% during the forecast period to reach around US$742 billion by 2023.

The country’s defense expenditure will largely be driven by efforts to retain its military supremacy and initiatives to replace the aged and worn-out weapons that have been used in the Iraq and Afghanistan wars. Moreover, the country’s initiatives to deal with the turbulence in the Middle East that could pose a potential threat to the interests of the US are also expected to drive the expenditure over the forecast period. As a percentage of GDP, the country’s defense expenditure is expected to average 3.1% over the forecast period.

The capital expenditure is expected to average 37.5% during 2019 and 2023 and the share of revenue expenditure is expected to average 62.5% during the forecast period.

During 2013-2017, the US retained its position as the largest exporter of defense equipment in the world, and is expected to remain the same over the forecast period, primarily due to the increase in defense budgets of a number of US arms importing countries, including allies such as Saudi Arabia, UAE, Turkey, Taiwan, Australia, India, Iraq, South Korea, Singapore, Egypt, the UK, Japan, Qatar, Kuwait and Israel among others. The country possesses a diverse consumer base and historic data shows that Saudi Arabia, UAE and Turkey emerged as the largest consumers of US-manufactured defense goods.

The report "Future of the US Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the US defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

Moreover, this report provides the following analysis

  • The US defense industry market size and drivers: detailed analysis of the US defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  • Porter’s Five Force analysis of the US defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities over the next 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the US defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Companies mentioned in this report Lockheed Martin, Raytheon, General Dynamics, Boeing, L-3 Technologies Inc., Northrop Grumman Corp., Science Application International Corp. (SAIC), Honeywell International Inc., Sikorsky Aircraft, General Electric (GE) Aviation, Bell, and Textron Marine and Land Systems.

Scope

  • Being the largest defense spender in the world, with a budget of US$639.2 billion in 2018, the US is expected to sustain its superiority over other nations in the coming years. During the historic period, the total defense budget, including funding for Overseas Contingency Operations (OCO), was relatively high, registering a CAGR of 2.39% due to the increasing instability fuelled by events such as the Russian annexation of Crimea, the festering status quo in civil war Ukraine and the devolving security situation in Syria.
  • Between 2014 and 2018, the US allocated an average of 35% of its total defense budget to capital expenditure, primarily to fulfill the equipment needs of its overseas contingency during the Iraq and Afghanistan wars. However, with the country expected to focus on the replacement of damaged and obsolete defense equipment rather than on war needs, the capital expenditure is estimated to average 37.5% over the forecast period. Consequently, the share of revenue expenditure is expected to average 62.5% during the forecast period as compared to 65% during 2014-2018.
  • Opportunities are expected to emerge in Land-Based C4ISR, Critical Infrastructure Protection-Physical Security and Network Security, Multirole Aircraft and Airborne C4ISR

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the US defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the US defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
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Note: Product cover images may vary from those shown
2 of 5

FEATURED COMPANIES

  • Bell
  • Boeing
  • General Dynamics
  • L-3 Technologies Inc.
  • Lockheed Martin
  • Northrop Grumman Corp.
  • MORE

1. Introduction
1.1. What is this Report bout?
1.2. Definitions
1.3. Summary Methodology

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023
3.1.6. Social, Political and Economic Environment & Support for Defense Projects
3.1.7. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. US defense expenditure expected to increase at a CAGR of 1.98% over the forecast period
3.2.2. Defense spending drivers - initiatives to retain military edge, subsequent military modernization, instability in Middle East and rivalry with Russia & China
3.2.3. Defense expenditure as a percentage of GDP estimated to decline over the forecast period
3.2.4. Per capita defense spending projected to decline over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Total Department of Defense (DoD) budget forecasted to grow at a CAGR of 1.98%
3.3.2. Share of revenue expenditure expected to increase over the forecast period
3.3.3. US defense capital expenditure expected to increase at a CAGR of 3.95% over the forecast period
3.3.4. Navy to receive the major allocation of the defense budget over the forecast period
3.3.5. Allocation for defense expenditure on army expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. The US homeland security expenditure to reach US$84.2 billion by 2023
3.4.2. Prevention of terrorism, securing and managing borders, safeguarding cyberspace and disaster management to drive homeland security expenditure over the forecast period
3.4.3. The nation is at “highly affected” category of terrorism
3.4.4. The US faces high level of threats from terrorist organizations
3.4.5. The US has a terrorism index score of 5.4
3.5. Benchmarking with Key Global Markets
3.5.1. The US will dominate global military spending over the forecast period
3.5.2. US defense budget is much higher than other leading spenders
3.5.3. US is one of the top defense spenders in terms of expenditure as a percentage of GDP
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top Defense Market Sectors by Value (US$ Million) - Projections over 2018-2023
3.6.2. Land Based - C4ISR
3.6.3. Critical Infrastructure Protection (CIP) - Physical Security
3.6.4. Critical Infrastructure Protection (CIP) - Network Security
3.6.5. Multirole Aircraft
3.6.6. Airborne - C4ISR

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. US primarily imports defense equipment to build strategic relations
4.1.2. Defense imports expected to increase over the forecast period
4.1.3. The Germany and UK dominated the US defense imports during the historic period
4.1.4. Aircraft account for majority of arms imports
4.2. Export Market Dynamics
4.2.1. US arms exports are driven by political and economic factors
4.2.2. Arms exports expected to increase in the period 2019-2023
4.2.3. US defense exports to increase during the forecast period
4.2.4. Aircraft are the most exported defense equipment
4.2.5. The US maintains controlled defense export policy

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of Supplier: Low to Medium
5.1.2. Bargaining power of Buyer: High
5.1.3. Barrier to entry: Medium
5.1.4. Intensity of rivalry: Low to high
5.1.5. Threat of Substitution: Low to high

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. The US defense industry is open to FDI
6.1.2. No offset policy exists in the US
6.1.3. US arms trade is heavily regulated
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy & Process
6.2.3. Foreign OEMs enter the market through the acquisition of domestic defense companies
6.2.4. Joint product development programs, an attractive market entry route
6.2.5. Formation of partnerships with domestic defense firms provide good market entry opportunities
6.2.6. Direct sale of defense equipment provides foreign OEMs with an opportunity to enter the market
6.3. Key Challenges
6.3.1. Decreasing economies of scale and defense inflation

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Domestic Public Companies
7.2.1. Lockheed Martin Corp.: overview
7.2.2. Lockheed Martin Corp.: products
7.2.3. Lockheed Martin Corp.: recent announcements and strategic initiatives
7.2.4. Lockheed Martin Corp.: alliances
7.2.5. Lockheed Martin Corp.: recent contract wins
7.2.6. Lockheed Martin Corp.: financial analysis
7.2.7. Raytheon: overview
7.2.8. Raytheon: products
7.2.9. Raytheon: recent announcements and strategic initiatives
7.2.10. Raytheon: alliances
7.2.11. Raytheon: recent contract wins
7.2.12. Raytheon: financial analysis
7.2.13. General Dynamics: overview
7.2.14. General Dynamics: products
7.2.15. General Dynamics: recent announcements and strategic initiatives
7.2.16. General Dynamics: alliances
7.2.17. General Dynamics: recent contract wins
7.2.18. General Dynamics: financial analysis
7.2.19. Boeing: overview
7.2.20. Boeing: products
7.2.21. Boeing: recent announcements and strategic initiatives
7.2.22. Boeing: alliances
7.2.23. Boeing: recent contract wins
7.2.24. Boeing: financial analysis
7.2.25. L-3 Technologies, Inc.: overview
7.2.26. L-3 Technologies Inc.: products
7.2.27. L-3 Technologies, Inc.: recent announcements and strategic initiatives
7.2.28. L-3 Technologies Inc.: alliances
7.2.29. L-3 Technologies Inc.: recent contract wins
7.2.30. L-3 Technologies: financial analysis
7.2.31. Northrop Grumman Corp.: overview
7.2.32. Northrop Grumman Corp.: products
7.2.33. Northrop Grumman Corp.: recent contracts and strategic initiatives
7.2.34. Northrop Grumman Corporation: alliances
7.2.35. Northrop Grumman Corp.: recent contract wins
7.2.36. Northrop Grumman Corp.: financial analysis
7.2.37. Science Application International Corp. (SAIC): overview
7.2.38. Science Application International Corp. (SAIC): products
7.2.39. Science Application International Corp. (SAIC): recent contracts and strategic initiatives
7.2.40. Science Application International Corp. (SAIC): alliances
7.2.41. Science Application International Corp. (SAIC): recent contract wins
7.2.42. Science Application International Corp. financial analysis
7.2.43. Honeywell International Inc.: overview
7.2.44. Honeywell International Inc.: products and services
7.2.45. Honeywell International Inc.: recent announcements and strategic initiatives
7.2.46. Honeywell International Inc.: alliances
7.2.47. Honeywell International Inc.: recent contract wins
7.3. Domestic Private Companies
7.3.1. Sikorsky Aircraft: overview
7.3.2. Sikorsky Aircraft: products
7.3.3. Sikorsky Aircraft: recent announcements and strategic initiatives
7.3.4. Sikorsky Aircraft: alliances
7.3.5. Sikorsky Aircraft: recent contract wins
7.3.6. General Electric Aviation: overview
7.3.7. General Electric Aviation: products
7.3.8. General Electric Aviation: recent contracts and strategic initiatives
7.3.9. General Electric Aviation: alliances
7.3.10. General Electric Aviation: recent contract wins
7.3.11. Bell: overview
7.3.12. Bell: products and services
7.3.13. Bell: recent announcements and strategic initiatives
7.3.14. Bell Helicopter Textron, Inc.: alliances
7.3.15. Bell Helicopter Textron, Inc.: recent contract wins
7.3.16. Textron Marine and Land Systems: overview
7.3.17. Textron Marine and Land Systems: products
7.3.18. Textron Marine and Land Systems: recent announcements and strategic initiatives
7.3.19. Textron Marine and Land Systems: alliances
7.3.20. Textron Marine and Land Systems: recent contract wins

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita
8.1.2. GDP, Current Prices
8.1.3. Exports of goods and services in local currency
8.1.4. Imports of goods and services in local currency
8.1.5. Gross National Disposable Income (US$ Billion)
8.1.6. Market Capitalization of Listed Companies
8.1.7. Market Capitalization of Listed Companies (% of GDP)
8.1.8. Government Cash Surplus/Deficit as % of GDP
8.1.9. Goods exports as % of GDP
8.1.10. Goods imports as % of GDP
8.1.11. Service Imports as % of GDP
8.1.12. Service Exports as % of GDP
8.1.13. Foreign Direct Investment
8.1.14. Net foreign direct investment as % of GDP
8.1.15. Mining, Manufacturing, Utilities Output

9. Appendix

List of Tables:
Table 1: The US Army Strength
Table 2: The US Navy (USN) Strength
Table 3: The US Air Force (USAF) Strength
Table 4: The US - Ongoing Development and Procurement Programs
Table 5: The US - Future Procurement Programs
Table 6: Top US Defense Procurement Programs by Value (US$ Million) 2018-2023
Table 7: US Defense Expenditure (US$ Billion), 2014-2023
Table 8: US GDP Growth vs. Defense Expenditure as Percentage of GDP, 2014-2023
Table 9: US Per Capita Defense Expenditure (US$), 2014-2023
Table 10: US Defense Budget Split by Base Budget, OCO, and Other Funds (US$ Billion), 2014-2023
Table 11: US Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 12: US Defense Capital Expenditure (US$ Billion), 2014-2023
Table 13: US Defense Expenditure Allocation for Army, Air Force, Navy, and Defense-wide (%), 2014-2023
Table 14: The US Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Defense-Wide) 2014-2023
Table 15: The US Funding Allocations for Military’s Key Weapon Acquisition Programs - FY2018
Table 16: The US Requested Funding for Military’s Key Weapon Acquisition Programs - FY2019
Table 17: The US Requested Funding for Unmanned Systems by Departments (Air Force, Army, Navy and Defense Wide) - FY2019
Table 18: The US Requested Funding for Unmanned Systems by Categories - FY2019
Table 19: US Homeland Security Expenditure (US$ Billion), 2014-2023
Table 20: Terrorism Index, 2018
Table 21: Benchmarking with Key Markets: 2014-2018 vs. 2019-2023
Table 22: Top US Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 23: The US Budget Formulation Process:
Table 24: The US Budget Enactment Timetable:
Table 25: Direct Commercial Sales (DCS) V/S Foreign military Sales (FMS) - A Comparative Analysis
Table 26: Top Defense Suppliers in The US Defense Industry - By Value (US$ Million) 2018-2023
Table 27: Competitive Landscape of the US Defense Industry
Table 28: Lockheed Martin Corp - product focus
Table 29: Lockheed Martin Corp. - Alliances
Table 30: Lockheed Martin Corp. - Recent Contract Wins
Table 31: Raytheon - Product Focus
Table 32: Raytheon - Alliances
Table 33: Raytheon - Recent Contract Wins
Table 34: General Dynamics - product focus
Table 35: General Dynamics - Alliances
Table 36: General Dynamics - Recent Contract Wins
Table 37: Boeing - product focus
Table 38: Boeing - Alliances
Table 39: Boeing - Recent Contract Wins
Table 40: L-3 Technologies, Inc. - Product Focus
Table 41: L-3 Technologies Inc. - Alliances
Table 42: L-3 Technologies Inc. - Recent Contract Wins
Table 43: Northrop Grumman Corp.- Product Focus
Table 44: Northrop Grumman Corporation - Alliances
Table 45: Northrop Grumman Corp. - Recent Contract Wins
Table 46: Science Application International Corp. (SAIC) - Product Focus
Table 47: Science Application International Corp. (SAIC) - Alliances
Table 48: Science Application International Corp. (SAIC) - Recent Contract Wins
Table 49: Honeywell International Inc. - product focus
Table 50: Honeywell International Inc. - Alliances
Table 51: Honeywell International Inc.- Recent Contract Wins
Table 52: Sikorsky Aircraft - Product Focus
Table 53: Sikorsky Aircraft - Alliances
Table 54: Sikorsky Aircraft - Recent Contract Wins
Table 55: General Electric Aviation - Product Focus
Table 56: General Electric Aviation - Alliances
Table 57: General Electric Aviation - Recent Contract Wins
Table 58: Bell - Product Focus
Table 59: Bell Helicopter Textron, Inc. - Alliances
Table 60: Bell Helicopter Textron, Inc. - Recent Contract Wins
Table 61: Textron Marine and Land Systems - Product Focus
Table 62: Textron Marine and Land Systems - Alliances
Table 63: Textron Marine and Land Systems - Recent Contract Wins

List of Figures:
Figure 1: US Defense Expenditure (US$ Billion), 2014-2023
Figure 2: US GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 3: US Per Capita Defense Expenditure (US$), 2014-2023
Figure 4: US Defense Budget Split by Base Budget, OCO, and Other Funds (US$ Billion), 2014-2023
Figure 5: US Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 6: US Defense Capital Expenditure (US$ Billion), 2014-2023
Figure 7: US Defense Expenditure Allocation for Army, Air Force, Navy, and Defense-wide (%), 2014-2023
Figure 8: US Defense Expenditure Allocation By Military Services - Split by Army, Navy, Air Force and Defense-Wide Spending (US$ Billion), 2014-2023
Figure 9: US Homeland Security Expenditure (US$ billion), 2014-2023
Figure 10: Terrorism Heat Map, 2018
Figure 11: Terrorism Index, 2018
Figure 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018
Figure 15: Land Based C4ISR Market Size (US$ Million), 2018-2023
Figure 16: Critical Infrastructure Protection (CIP) - Physical Security Market Size (US$ Million), 2018-2023
Figure 17: Critical Infrastructure Protection (CIP) - Network Security Market Size (US$ Million), 2018-2023
Figure 18: Multirole Aircraft Market Size (US$ Billion), 2018-2023
Figure 19: Airborne C4ISR Market Size (US$ Million), 2018-2023
Figure 20: Top US Defense Procurements in Terms of Their Supplier Relationships
Figure 21: US Defense Import Trend (US$ Million), 2013-2017 (TIV Values)
Figure 22: US Defense Imports by Country (%), 2013-2017
Figure 23: US Defense Imports by Category (%), 2013-2017
Figure 24: US Defense Exports (US$ Million), 2013-2017
Figure 25: US Defense Exports by Country (%), 2013-2017
Figure 26: US Defense Exports by Category (%), 2013-2017
Figure 27: Industry Dynamics - Porter’s Five Forces Analysis
Figure 28: Lockheed Martin Corp. - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 29: Lockheed Martin Corp. - Operating Profit Trend Analysis (US$ billion), 2013-2017
Figure 30: Lockheed Martin Corp. - Net Profit Trend Analysis (US$ billion), 2013-2017
Figure 31: Raytheon - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 32: Raytheon - Operating Profit Trend Analysis (US$ billion), 2012-2016
Figure 33: Raytheon - Net Profit Trend Analysis (US$ billion), 2012-2016
Figure 34: General Dynamics - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 35: General Dynamics - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 36: General Dynamics - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 37: Boeing - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 38: Boeing - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 39: Boeing - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 40: L-3 Technologies - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 41: L-3 Technologies - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 42: L-3 Technologies - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 43: Northrop Grumman Corp. - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 44: Northrop Grumman Corp. - Operating Profit Trend Analysis (US$ billion), 2013-2017
Figure 45: Northrop Grumman Corp. - Net Profit Trend Analysis (US$ billion), 2013-2017
Figure 46: Science Application International - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 47: Science Application International - Operating Profit Trend Analysis (US$ Million), 2013-2017
Figure 48: Science Application International - Net Profit Trend Analysis (US$ Million), 2013-2017
Figure 49: US GDP Per Capita, 2015-2025
Figure 50: US GDP, Current Prices (US$ Billion), 2015-2025
Figure 51: US Exports of goods and services (US$ Billion), 2005-2013
Figure 52: US Imports of goods and services (US$ Billion), 2005-2013
Figure 53: US Gross National Disposable Income (US$ Billion), 2005-2013
Figure 54: US Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 55: US Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 56: US Government Cash Surplus/Deficit as % of GDP, 2005-2013
Figure 57: US Goods Exports as % of GDP, 2005-2014
Figure 58: US Goods Imports as % of GDP, 2005-2014
Figure 59: US Service Imports as % of GDP, 2005-2014
Figure 60: US Service Exports as % of GDP, 2005-2014
Figure 61: US Foreign Direct Investment (US$ Billion), 2005-2014
Figure 62: US Net foreign direct investment as % of GDP, 2005-2014
Figure 63: US Mining, Manufacturing, Utilities Output (US$ Billion), 2005-2014

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  • Lockheed Martin
  • Raytheon
  • General Dynamics
  • Boeing
  • L-3 Technologies Inc.
  • Northrop Grumman Corp.
  • Science Application International Corp. (SAIC)
  • Honeywell International Inc.
  • Sikorsky Aircraft
  • General Electric (GE) Aviation
  • Bell
  • Textron Marine and Land Systems
Note: Product cover images may vary from those shown
5 of 5
Note: Product cover images may vary from those shown
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