Global Defense Suppliers Outlook Survey 2012-2013: Industry Dynamics, Market Trends and Opportunities, Expenditure and Marketing Strategies


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ICD Research

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Product Synopsis

Global Defense Supplier Industry Outlook Survey 2012-2013: Industry Dynamics, Market Trends and Opportunities, Expenditure and Procurement Strategies is a new report by ICD Research and Strategic Defence Intelligence that analyzes how defense supplier companies media spend, marketing and sales strategies and practices, and business planning are set to change in 2012-2013. This report provides the current size of the marketing and advertising budgets of global defense suppliers and how spending by suppliers will change, providing an insight into global marketing behaviour. In addition, the report also identifies future growth of buyers and suppliers and M&A activity. This report not only grants access to the opinions and strategies of business decision makers and competitors, but also examines their actions surrounding business priorities. The report also provides access to information categorized by region, company type and sizes.

Introduction and Landscape

Why was the report written?
This report is the result of an extensive survey drawn from ICD Research and Strategic Defence Intelligences exclusive panel of 316 leading global defense industry executives. The report provides data and analysis on global defenseindustry suppliers media spend, marketing and sales strategies, and practices and business planning within the global defenseindustry. This report includes key topics such as media channel spending outlooks, media budgets, marketing agency selection criteria, business challenges and sales tactics of leading suppliers within the global defense industry. The report also identifies suppliers future growth, M&A and investment expectations.Most secondary research reports are based on general industry drivers and do not understand the industry executives attitude and changing behaviours, creating a gap in presenting the business outlook of the industry. In an effort to bridge this gap, ICD Research and Strategic Defence Intelligence created this primary-research based report by gathering the opinions of multiple stake holders in the value-chain of the global defense industry.

What is the current market landscape and what is changing?
Of respondents across the global defense supplier industry, 39% are 'more optimistic about revenue growth for their company over the next 12 months than the previous 12 months.Optimism levels have marginally decreased for 2012 when compared to the 2011 survey results.

What are the key drivers behind recent market changes?
The expected declining growth in the global defense market in 2012 compared to 2011 is mainly due to anticipated decreases in military spending, principally in the US and Europe. Although the level of optimism is comparatively less in 2012, the defense industry expects an increase in demand for national security priorities including segments such as cyber security, satellites, missile defense and nuclear defense across the world. Additionally, the top priorities for the global defense industry in 2012 are 'expand in current market and abroad, 'new products and services and 'expand into new territories.

What makes this report unique and essential to read?
Global Defense Supplier Industry Outlook Survey 2012-2013: Industry Dynamics, Market Trends and Opportunities, Expenditure and Procurement Strategies is a new report by ICD Research and Strategic Defence Intelligence that analyzes how defenseindustry companies media spend, marketing and sales strategies and practices, and business planning are set to change in 2012-2013. This report provides the current size of the marketing and advertising budgets of global defense industry suppliers and how spending by global defenseindustry suppliers will change, providing an insight into global marketing behaviour. In addition, the report also identifies future growth of suppliers and M&A activity. This report not only grants access to the opinions and strategies of business decision makers and competitors, but also examines their actions surrounding business priorities. The report also provides access to information categorized by region, company type and sizes.

Key Features and Benefits

Project industry trends and revenue growth expectations in 2012 and understand business confidence to take informed business decisions.

Drive revenues by understanding future product investment areas and key growth regions.

Uncover key challenges and opportunities and identify key actions required to maintain and win buyer business.

Formulate effective sales and marketing strategies by identifying how suppliers marketing budgets are changing and the direction of spend in the future. Better promote your business by aligning your capabilities and business practices with your customers changing needs.

Secure stronger customer relationships by understanding the behaviour and changing strategies of industry suppliers.

Key Market Issues

Throughout the global defense supplier industry, 39% of respondents are 'more optimistic about revenue growth for their company over the next 12 months compared to the previous 12 months. A further 34% of respondents are 'neutral about revenue growth compared to 25% who are 'less optimistic about their companys revenue prospects.

Executives from the global defense industry expect increased levels of consolidation, with an average 54% from defense contractors and 49% from other service providers projecting either a 'significant increase or 'increase in M&A. However, 31% of defense contractors and 30% of other service providers expect no change in consolidation activities in 2012. The expected levels of consolidation in the industry could be due to new cost or demand pressures, repayment of debt, the potential need to meet new compliance procedures, quick access to new markets, business expansion, and an increase in market share. Additionally, global defensecontractors and other service providers reveal that they will increase capital expenditure towards'new product development, 'IT infrastructure and developmentand 'machinery and equipment purchaseover the next 12 months.

Global defense industry respondents identify India to be the most important region for growth among emerging markets, along with Middle East and Brazil. The Indian defense industry is a fast growing market in the world as a result of demand for advanced military hardware and the concerns of domestic insurgencies and hostility from neighboring countries. Furthermore, South Korea and Singapore with Taiwan and Hong Kongare the developed regions with the highest growth potential, as identified by 42% and 35% of respective respondents from defense contractors companies. Additionally, according to 37% of respondents from other service providers, South Korea will demonstrate ample growth in this sector.

According to the survey, 51% of global defense supplier industry respondents rate 'market uncertainty as an important business concern during 2012-2013 and a further 47% rate 'decreasing defense expenditure as important.Respondents consider 'innovate product, 'improve customer service and 'engage in partnerships to optimize working capital and reduce costs to be the leading actions for suppliers to secure buyers business.

ICD Research and Strategic Defence Intelligences industry survey 2012 reveals that the marketing budgets of global defense industry supplier respondents are expected to rise by an average of 5.5% over the next 12 months. Noticeably, 42% of respondents expect an increase in marketing expenditure of between 1% to 10% in 2012, while only 10% of respondents expect a decrease between 1% and 10%.

Key Highlights

'Email and newsletters, 'corporate and brand websites and 'conferences and events are expected to register the highest increase in investment, as noted by 38%, 36% and 34% of respective respondents. In contrast, traditional media channels such as 'radio, 'newspapers and 'television and video are expected to attract the least investment.

'Customer retention, 'customer acquisition and 'brand building or awareness are considered the key marketing aims for both the defense contractor and other service provider category respondents over the next 12 months. The most significant strategy that suppliers plan to employ in 2012 is to 'focus sales efforts on generating new business, to 'focus sales efforts on existing markets and to 'trial new and innovative products in the market as identified by 53%, 44% and 38% of respondents respectively.

According to 32% of respondents from global defense contractors, and 28% from other industry suppliers, headcounts in their organizations in 2012 are expected to increase steadily by up to 2%.The introduction of new defense programs, strategic focus shift towards advanced warfare technologies, such as cyber warfare, intelligence and counter improvised explosive device (IED) systems, surveillance, border-control missions, and situational awareness systems will require suppliers to recruit specialized personnel to accelerate the recruitment drive.

'Networking through social media websites and 'white paper downloads for lead generation are identified as the most popular media channels by 32% and 31% of respondents respectively from global defense supplier industry respondents.

The political instability in the Middle East and North Africa (MENA) region, specifically in countries such as Tunisia, Egypt, Bahrain, Libya and Syria has motivated these countries to strengthen their defense capabilities in order to counter any insurgencies from their neighbors, which in turn increases the sales expectation and the optimism in revenue growth for 2012.
Table of Contents

1 Introduction
1.1 What is This Report About?
1.2 Definitions
1.3 Methodology
1.4 Profile of Survey Respondents

2 Executive Summary

3 Global Defense Industry Suppliers Dynamics
3.1 Revenue Growth Expectations in the Global Defense Industry Suppliers
3.1.1 Revenue growth expectations by company type
3.1.2 Revenue growth expectations by region
3.1.3 Revenue growth expectations by turnover
3.1.4 Revenue growth expectations of senior level respondents
3.1.5 Company revenue growth optimism: cross industry comparisons
3.2 Future Developments in Business Structure in the Global Defense Suppliers' Industry
3.2.1 Future developments by company type
3.3 M&A Activity Expectations in the Global Defense Suppliers' Industry
3.3.1 M&A activity expectations by company type
3.3.2 M&A activity expectations by region
3.3.3 M&A activity expectations by company turnover
3.3.4 Global defense Suppliers' industry: expansion abroad vs. M&A activity projections
3.4 Capital Expenditure Forecast in the Global Defense Industry Suppliers
3.4.1 Forecast of capital expenditure by company type
3.4.2 Forecast of capital expenditure by region
3.4.3 Forecast of capital expenditure by company turnover
3.5 Planned Change in Staff Recruitment in the Global Defense Suppliers' Industry
3.5.1 Planned change in staff recruitment by company type
3.5.2 Planned change in staff recruitment by region
3.5.3 Planned change in staff recruitment by company turnover

4 Global Defense Industry Suppliers Market Growth Outlook
4.1 Global Defense Suppliers' Industry: Demand in Emerging Markets
4.1.1 Demand in emerging markets by company type
4.1.2 Demand in emerging markets by region
4.1.3 Demand in emerging markets by company turnover
4.2 Global Defense Suppliers' Industry: Growth Expectations in Developed Markets
4.2.1 Growth expectations in developed markets by company type
4.2.2 Growth expectations in developed countries by region
4.2.3 Growth expectations in developed countries by company turnover

5 Threats and Opportunities for Global Defense Industry Suppliers
5.1 Global Defense Industry Suppliers: Leading Business Concerns in 2012-2013
5.1.1 Leading business concerns by company type
5.1.2 Leading business concerns by region
5.1.3 Leading business concerns by company turnover
5.2 Global Defense Suppliers' Industry: Key Supplier Actions to Maintain and Win Buyer Business
5.2.1 Actions to maintain and secure buyer business by region
5.2.2 Actions to maintain and secure buyer business by turnover

6 Global Defense Industry Suppliers' Spend Activity
6.1 Annual Marketing Budgets: Global Defense Industry Suppliers
6.1.1 Annual marketing budgets by company type
6.1.2 Annual marketing budgets by region
6.1.3 Annual marketing budgets by company turnover
6.2 Planned Change in Marketing Expenditure Levels: Global Defense Industry Suppliers
6.2.1 Planned change in marketing expenditure by company type
6.2.2 Planned change in marketing expenditure by region
6.2.3 Planned change in marketing expenditure by company turnover
6.3 Future Investment by Media Channel: Global Defense Suppliers' Industry
6.3.1 Future investment by media channel by region
6.3.2 Future investment by media channel by company turnover
6.4 Global Defense Suppliers' Industry: Future Investment in Marketing and Sales
6.4.1 Future investment in marketing and sales by company type
6.4.2 Future investment in marketing and sales by region
6.4.3 Future investment in marketing and sales by turnover

7 Global Defense Industry Suppliers: Marketing Behaviors and Strategies
7.1 Global Defense Industry: Critical Success Factors for Supplier Selection
7.1.1 Critical success factors for supplier selection by company type
7.2 Key Marketing Aims for 2012-2013: Global Defense Suppliers' Industry
7.2.1 Key marketing aims by region
7.2.2 Key marketing aims by company turnover
7.3 Global Defense Industry Suppliers: Essential Amendments to Marketing Activities
7.3.1 Amendments to marketing activities by company type
7.3.2 Amendments to marketing activities by region
7.3.3 Amendments to marketing activities by company turnover
7.4 Use of New Media for Business Prospects: Global Defense Suppliers' Industry
7.4.1 Use of new media by company type
7.4.2 Use of new media by region
7.4.3 Use of new media by company turnover
7.5 Global Defense Suppliers' Industry: Critical Success Factors in Choosing a Marketing Agency
7.5.1 Critical success factors for choosing a marketing agency by company type
7.5.2 Critical success factors for choosing a marketing agency by region
7.5.3 Critical success factors for choosing a marketing agency by company turnover

8 Appendix
8.1 Global Defense Industry Full Survey Results
8.2 Methodology
8.3 Contact us
8.4 About SDI
8.5 Disclaimer

Table 1: Global Defense Supplier Industry Respondents by Company Type, 2012
Table 2: Global Defense Supplier Industry Respondents by Job Role (%), 2012
Table 3: Global Defense Supplier Industry Respondents by Company Turnover (%), 2012
Table 4: Global Defense Supplier Industry Respondents by Region (%), 2012
Table 5: Global Defense Suppliers Industry: Revenue Growth Optimism (%), 2011-2012
Table 6: Global Defense Suppliers Industry: Revenue Growth Expectations by Region (%), 2012
Table 7: Global Defense Suppliers Industry: Revenue Growth Expectations by Turnover (%), 2012
Table 8: Revenue Growth Expectations by Senior Level Respondents (%), 2012
Table 9: Key Expected Changes in Business Structure of Defense Contractors (%), 2012
Table 10: Key Expected Changes in Business Structure of Other Service Providers (%), 2012
Table 11: Global Defense Suppliers Industry: M&A Activity Expectations by Company Type (%), 2012
Table 12: Global Defense Industry Suppliers: M&A Activity Expectations by Region (%), 2012
Table 13: Global Defense Industry Suppliers: M&A Activity Expectations by Turnover (%), 2012
Table 14: Global Defense Suppliers Industry: Expand Abroad vs. M&A Activity Projections (%), 2012
Table 15: Global Defense Industry Suppliers: Capital Expenditure by Defense Contractors (%), 2012
Table 16: Global Defense Industry Suppliers: Capital Expenditure by Other Industry Suppliers (%), 2012
Table 17: Global Defense Industry Suppliers: Capital Expenditure by Region (%), 2012
Table 18: Global Defense Suppliers Industry: Capital Expenditure by Turnover (%), 2012
Table 19: Global Defense Suppliers Industry: Change in Staff Recruitment by Company Type (%), 2012
Table 20: Global Defense Suppliers Industry: Change in Staff Recruitment by Region (%), 2012
Table 21: Global Defense Suppliers Industry: Change in Staff Recruitment by Region (%), 2012
Table 22: Demand in Emerging Markets by Global Defense Contractors (%), 2012
Table 23: Demand in Emerging Markets: Global Defense Industry Other Service Providers (%), 2012
Table 24: Growth in Developed Countries: Global Defense Industry Other Service Providers (%), 2012
Table 25: Global Defense Industry Suppliers: Leading Business Concerns (%), 2012-2013
Table 26: Global Defense Industry Suppliers: Leading Business Concerns by Company (%), 2012-2013
Table 27: Global Defense Industry Suppliers: Leading Business Concerns by Region (%), 2012-2013
Table 28: Global Defense Suppliers Industry: Actions Secure Buyer Business(%), 2012
Table 29: Global Defense Suppliers Industry: Actions to Secure Buyer Business by Region (%), 2012
Table 30: Global Defense Industry Suppliers: Annual Marketing Budgets in US$ (%), 2012
Table 31: Global Defense Industry Suppliers: Annual Marketing Budgets by Company Type (%), 2012
Table 32: Global Defense Industry Suppliers: Annual Marketing Budgets by Region (%), 2012
Table 33: Global Defense Industry Suppliers: Annual Marketing Budgets by Turnover (%), 2012
Table 34: Global Defense Industry Suppliers: Expected Change in Marketing Expenditure (%), 2012
Table 35: Global Defense Industry Suppliers: Change in Marketing Expenditure by Company (%), 2012
Table 36: Global Defense Industry Suppliers: Change in Marketing Expenditure by Region (%), 2012
Table 37: Global Defense Industry Suppliers: Change in Marketing Expenditure by Turnover (%), 2012
Table 38: Global Defense Suppliers Industry: Future Investment by Media Channels (%), 2012
Table 39: Global Defense Industry Suppliers: Investment by Media Channels - Turnover(%), 2012
Table 40: Global Defense Suppliers Industry: Investment in Marketing and Sales (%) , 2012
Table 41: Global Defense Industry Suppliers: Investment in Marketing and Sales by Company (%) , 2012
Table 42: Global Defense Industry Suppliers: Investment in Marketing and Sales by Turnover (%) , 2012
Table 43: Global Defense Industry: Critical Success Factors for Supplier Selection, 2012
Table 44: Global Defense Industry: Critical Success Factors by Company Type (%), 2012
Table 45: Global Defense Suppliers Industry: Key Marketing Aims of Defense Contractors (%), 2012
Table 46: Global Defense Suppliers Industry: Key Marketing Aims of Other Service Providers (%), 2012
Table 47: Global Defense Suppliers Industry: Key Marketing Aims by Region (%), 2012
Table 48: Global Defense Suppliers Industry: Key Marketing Aims by Turnover (%), 2012
Table 49: Global Defense Industry Suppliers: Amendments to Marketing Activities (%), 2012
Table 50: Global Defense Industry Suppliers: Amendments to Marketing by Company Type (%), 2012
Table 51: Global Defense Industry Suppliers: Amendments to Marketing by Region (%), 2012
Table 52: Global Defense Suppliers Industry: Use of New Media (%),2012
Table 53: Global Defense Suppliers Industry: Use of New Media by Company Type (%),2012
Table 54: Global Defense Suppliers Industry: Use of New Media by Region (%),2012
Table 55: Global Defense Suppliers Industry: Use of New Media by Turnover (%),2012
Table 56: Global Defense Suppliers Industry: Critical Success Factors (%),2012
Table 57: Global Defense Suppliers Industry: Critical Success Factors by Company Type (%),2012
Table 58: Global Defense Suppliers Industry: Critical Success Factors by Region (%),2012
Table 59: Global Defense Industry Suppliers: Survey Results - Closed Questions

Figure 1: Global Defense Suppliers Industry: Revenue Growth Optimism (%), 2011-2012
Figure 2: Global Defense Industry Suppliers: Revenue Growth Expectations by Company Type (%), 2012
Figure 3: Global Defense Suppliers Industry: Revenue Growth Expectations by Region (%), 2012
Figure 4: Global Defense Suppliers Industry: Revenue Growth Expectations by Turnover (%), 2012
Figure 5: Revenue Growth Expectations by Senior Level Respondents (%), 2012
Figure 6: Company Revenue Growth Optimism: Cross Industry Comparisons (%), 2012
Figure 7: Key Expected Changes in Business Structure of Defense Contractors (%), 2012
Figure 8: Key Expected Changes in Business Structure of Other Service Providers (%), 2012
Figure 9: Global Defense Suppliers Industry: M&A Activity Expectations by Company Type (%), 2012
Figure 10: Global Defense Industry Suppliers: M&A Activity Expectations by Region (%), 2012
Figure 11: Global Defense Industry Suppliers: M&A Activity Expectations by Turnover (%), 2012
Figure 12: Global Defense Suppliers Industry: Expand Abroad vs. M&A Activity Projections (%), 2012
Figure 13: Global Defense Industry Suppliers: Capital Expenditure by Defense Contractors (%), 2012
Figure 14: Global Defense Industry Suppliers: Capital Expenditure by Other Industry Suppliers (%), 2012
Figure 15: Global Defense Industry Suppliers: Capital Expenditure by Region (%), 2012
Figure 16: Global Defense Suppliers Industry: Capital Expenditure by Turnover (%), 2012
Figure 17: Global Defense Suppliers Industry: Change in Staff Recruitment by Company Type (%), 2012
Figure 18: Global Defense Suppliers Industry: Change in Staff Recruitment by Region (%), 2012
Figure 19: Global Defense Suppliers Industry: Change in Staff Recruitment by Region (%), 2012
Figure 20: Global Defense Suppliers Industry: Top Ten Growth Regions, 2012
Figure 21: Global Defense Suppliers Industry: Top Five Growth Regions, 2012
Figure 22: Demand in Emerging Markets by Global Defense Contractors (%), 2012
Figure 23: Demand in Emerging Markets: Global Defense Industry Other Service Providers (%), 2012
Figure 24: Global Defense Suppliers Industry: Demand in Emerging Markets by Region (%), 2012
Figure 25: Global Defense Suppliers Industry: Demand in Emerging Markets by Turnover (%), 2012
Figure 26: Global Defense Suppliers Industry: Top Five Growth Markets, 2012
Figure 27: Growth in Developed Countries: Global Defense Contractors (%), 2012
Figure 28: Growth in Developed Countries: Global Defense Industry Other Service Providers (%), 2012
Figure 29: Global Defense Suppliers Industry: Growth in Developed Countries by Region (%), 2012
Figure 30: Global Defense Suppliers Industry: Growth in Developed Countries by Turnover (%), 2012
Figure 31: Global Defense Industry Suppliers: Leading Business Concerns, 2012-2013
Figure 32: Global Defense Industry Suppliers: Leading Business Concerns (%), 2012-2013
Figure 33: Global Defense Industry Suppliers: Leading Business Concerns by Company (%), 2012-2013
Figure 34: Global Defense Industry Suppliers: Leading Business Concerns by Region (%), 2012-2013
Figure 35: Global Defense Industry Suppliers: Leading Business Concerns by Turnover (%), 2012-2013
Figure 36: Global Defense Suppliers Industry: Actions Secure Buyer Business (%), 2012
Figure 37: Global Defense Suppliers Industry: Actions to Secure Buyer Business by Turnover (%), 2012
Figure 38: Global Defense Industry Suppliers: Annual Marketing Budgets in US$ (%), 2012
Figure 39: Global Defense Industry Suppliers: Annual Marketing Budgets by Company Type (%), 2012
Figure 40: Global Defense Industry Suppliers: Annual Marketing Budgets by Region (%), 2012
Figure 41: Global Defense Industry Suppliers: Annual Marketing Budgets by Turnover (%), 2012
Figure 42: Global Defense Industry Suppliers: Expected Change in Marketing Expenditure (%), 2012
Figure 43: Global Defense Industry Suppliers: Change in Marketing Expenditure by Company (%), 2012
Figure 44: Global Defense Industry Suppliers: Change in Marketing Expenditure by Region (%), 2012
Figure 45: Global Defense Industry Suppliers: Change in Marketing Expenditure by Turnover (%), 2012
Figure 46: Global Defense Suppliers Industry: Future Investment by Media Channels (%), 2012
Figure 47: Global Defense Industry Suppliers: Future Investment by Media Channels - Region (%), 2012
Figure 48: Global Defense Industry Suppliers: Investment by Media Channels - Turnover(%), 2012
Figure 49: Global Defense Suppliers Industry: Investment in Marketing and Sales (%) , 2012
Figure 50: Global Defense Industry Suppliers: Investment in Marketing and Sales by Company (%) , 2012
Figure 51: Global Defense Suppliers Industry: Investment in Marketing and Sales by Region (%) , 2012
Figure 52: Global Defense Industry Suppliers: Investment in Marketing and Sales by Turnover (%) , 2012
Figure 53: Global Defense Industry: Critical Success Factors for Supplier Selection, 2012
Figure 54: Global Defense Industry: Critical Success Factors by Company Type (%), 2012
Figure 55: Global Defense Suppliers Industry: Key Marketing Aims of Defense Contractors (%), 2012
Figure 56: Global Defense Suppliers Industry: Key Marketing Aims of Other Service Providers (%), 2012
Figure 57: Global Defense Suppliers Industry: Key Marketing Aims by Region (%), 2012
Figure 58: Global Defense Suppliers Industry: Key Marketing Aims by Turnover (%), 2012
Figure 59: Global Defense Industry Suppliers: Amendments to Marketing Activities (%), 2012
Figure 60: Global Defense Industry Suppliers: Amendments to Marketing by Company Type (%), 2012
Figure 61: Global Defense Industry Suppliers: Amendments to Marketing by Turnover (%) , 2012
Figure 62: Global Defense Suppliers Industry: Use of New Media (%),2012
Figure 63: Global Defense Suppliers Industry: Use of New Media by Company Type (%),2012
Figure 64: Global Defense Suppliers Industry: Use of New Media by Region (%),2012
Figure 65: Global Defense Suppliers Industry: Use of New Media by Turnover (%),2012
Figure 66: Global Defense Suppliers Industry: Critical Success Factors (%),2012
Figure 67: Global Defense Suppliers Industry: Critical Success Factors by Company Type(%),2012
Figure 68: Global Defense Suppliers Industry: Critical Success Factors by Region (%),2012
Figure 69: Global Defense Suppliers Industry: Critical Success Factors by Turnover (%),2012