Global Defense Suppliers’ Outlook Survey 2012–2013 Industry Dynamics

Glob­al Defense Sup­pli­ers’ Out­look Sur­vey 2012–2013 Indus­try Dynam­ics, Mar­ket Trends and Oppor­tu­ni­ties, Expen­di­ture and Mar­ket­ing Strate­gies
Lon­don, May 15th, 2012 – 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 company’s rev­enue prospects.

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% (ref­er­ence see graph below). Mar­ket­ing bud­gets of glob­al defense sup­pli­er indus­try sup­pli­er com­pa­nies are expect­ed to rise by an aver­age of 5.5% over the next 12 months. Sup­pli­er respon­dents plan to spend more on social media and dif­fer­ent online media for­mats such as newslet­ters, blogs, videos, web­casts, pod­casts, online resource cen­ters and talk­back.

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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 defense con­trac­tors and oth­er ser­vice providers reveal that they will increase cap­i­tal expen­di­ture towards ‘new prod­uct devel­op­ment’, ‘IT infra­struc­ture and devel­op­ment ’and ‘machin­ery and equip­ment pur­chase’ over 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.

About ICD Research

ICD Research is a full-ser­vice glob­al mar­ket research agency and pre­mi­um busi­ness infor­ma­tion brand spe­cial­iz­ing in indus­try analy­sis in a wide set of B2B and B2C mar­kets. ICD Research has access to over 400 in-house ana­lysts and jour­nal­ists and a glob­al media pres­ence in over 30 pro­fes­sion­al mar­kets enabling us to con­duct unique and insight­ful research via our trust­ed busi­ness com­mu­ni­ties. Through its unique B2B and B2C research pan­els and access to key indus­try bod­ies, ICD Research deliv­ers insight­ful and action­able analy­sis. The ICD Research sur­vey capa­bil­i­ties grant read­ers access to the opin­ions and strate­gies of key busi­ness deci­sion mak­ers, indus­try experts and com­peti­tors as well as exam­in­ing their actions sur­round­ing busi­ness pri­or­i­ties.

About Strate­gic Defence Intel­li­gence

This report is one of a series avail­able to sub­scribers of our pre­mi­um research plat­form, Strate­gic Defence Intel­li­gence. Strate­gic Defence Intel­li­gence pro­vides a stream of con­tin­u­ous­ly updat­ed cus­tomer and com­peti­tor intel­li­gence, as well as detailed research reports pro­vid­ing an unri­valled source of glob­al infor­ma­tion on the lat­est devel­op­ments in the defence indus­try.

Strate­gic Defence Intelligence’s unique mon­i­tor­ing plat­form tracks glob­al defence activ­i­ty for over 2,500 com­pa­nies and 65 prod­uct cat­e­gories in real time and in a high­ly struc­tured man­ner, giv­ing a com­pre­hen­sive and eas­i­ly-search­able pic­ture of all defence indus­try activ­i­ty. The site fea­tures: dai­ly updat­ed analy­sis, com­ment and news, com­pa­ny and cus­tomer pro­files, defence spend­ing, ten­ders and con­tracts, prod­uct and tech­nol­o­gy intel­li­gence, a research and analy­sis data­base pro­vid­ing access to indus­try and com­peti­tor reports to enable busi­ness and mar­ket plan­ning, and ful­ly cus­tomiz­able tools, includ­ing instant per­son­al­ized report gen­er­a­tion and cus­tom alerts.