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Domestic Defense Firms Must Become More Innovative and Cost Efficient to Succeed in the Increasingly Competitive Race to Sell International Arms
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An overall increase in global defense spending is expected, after several years of relatively flat growth, which will cause the US Department of Defense (DoD) market for foreign military sales (FMS) to grow at an estimated 3.4% over the 2015 to 2021 study period. However, overall sales of US military equipment will grow at an even greater rate because International Traffic in Arms Regulations (ITAR) reform, part of an overall Export Control Reform Initiative (ECRI), will eventually result in more equipment being sold through direct commercial sales (DCS). The top 10 countries for FMS deliveries all reside in the Near East and South Asia or East Asia and Pacific regions, and the most requested and delivered systems in the FMS program include: Ground-based air defense weaponry, fighter aircraft, training services, and tactical vehicles.Global competition for international arms sales is increasing as technology becomes cheaper to obtain and incorporate into indigenous endeavors. US defense companies must actively develop technological innovations while improving cost efficiencies if they hope sell technically advanced systems at competitive prices. They must also actively seek synergistic partnerships with emerging economies to achieve maximum growth potential. Research Scope: The market size, based on FMS deliveries, is provided for 2015—the last full fiscal year before this study was initiated. In addition, estimates for FMS deliveries through 2021 are calculated and a current evaluation of the competitive landscape is presented. The global market is segmented by the following regions: Near East and South Asia; East Asia and Pacific; Europe; Western Hemisphere; and Africa.Market estimations and competitive landscape information include: • Factors driving demand for military weapons systems • Factors restraining demand for military weapons systems • Regional geopolitical issues and impacts on weapons purchasing and manufacturing • Military weapons purchasing trends by region • Types of weapons systems and military services demanded by region • Leading US military suppliers to each region Questions this study will answer: • Is the DoD FMS market growing, how long will it continue to grow, and at what rate? • What segments, programs, and services make up the FMS market? • What are the leading market drivers, restraints, and trends? • Which countries are most active in the DoD FMS market? • What companies are leading the market? This study also contains a description of the rather complex FMS process, its positive and negative attributes, and how the program may change in the future. There are several growth opportunities for US defense firms that seek expansion outside the US DoD. The study identifies these opportunities and the strategies that will likely lead to successful execution of additional foreign sales of military weaponry.
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