ITT Exelis compete against many companies in the U.S. aerospace & defense industry, but primarily against Lockheed Martin, Boeing, Raytheon Company, General Dynamics, L-3 Communications, SAIC Inc., Northrop Grumman, Harris Corporation, and BAE Systems. Internationally, Exelis competes against these same companies as well as Thales, EADS, Finmeccanica and several others.
Intense competition and long operating cycles are both key characteristics of Exelis' business and the defense industry.
In the defense industry, it is common that work on major programs is shared among multiple companies.
A company competing as a prime contractor may, upon ultimate award of the contract to another party, serve as a subcontractor
for the prime contracting party. It is not uncommon to compete for a contract award with a peer company and, simultaneously,
perform as a supplier to or a customer of such competitor on other contracts. The nature of major defense programs, conducted under binding contracts,
allows companies that perform well to benefit from a level of program continuity not common in many industries.
The company's success in the competitive defense industry depends upon its ability to develop and market its products and services, as well as the ability to provide the people, technologies, facilities, equipment and financial capacity needed to deliver those products and services with maximum efficiency. Exelis must continue to maintain sources for raw materials, fabricated parts, electronic components and major subassemblies. In this manufacturing and systems integration environment, effective oversight of subcontractors and suppliers is as vital to success as managing internal operations.
Similarly, there is intense competition among many companies in the information and services markets, which are generally more labor intensive. Competitors in the information markets include L-3 Communications and SAIC. Competitors in the services markets include DynCorp, KBR, Fluor and several of the defense industry participants mentioned above, as well as many other large and small entities with expertise in various specialized areas. Exelis' ability to successfully compete in the information and services markets depends on a number of factors, the most important of which is the ability to deploy skilled professionals (many requiring security clearances) at competitive prices across the diverse spectrum of these markets. Accordingly, Exelis has implemented various workforce initiatives to ensure its success in attracting, developing and retaining sufficient resources to maintain or improve its competitive position within these markets.
According to Exelis, the company is quick and nimble and able to provide ready-to-deploy and affordable solutions for its customers' most pressing needs. Exelis focuses a lot on diversifying its product offerings. The company provides essential systems and components on a wide variety of aircraft, ships, ground vehicles, unmanned systems, and satellites, so that Exelis' business prospects are not tied to the future of any single program. Exelis sees its diverse portfolio as an advantage in the current defense budget environment, as the company has strong incumbent positions on many key programs, a robust pipeline of competitive opportunities and, for the year ended December 31, 2012, no single program accounted for more than 9% of total revenues.
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