Raytheon SWOT Analysis

adam June 8, 2012 Aerospace & Airline No Comments

Raytheon was established in 1922, by two roommates, Marshall and Bush, in collaboration with a young scientist Charles G. Smith. Originally the new company was named “American Alliance Company”, but changed its name to Raytheon in 1959 and carries the same name up to date. Currently it deals in weapon and commercial electronics manufacturing. Headquartered in Waltham, Massachusetts, Raytheon is the 5th largest military contractor across the globe and employs around 72000 people from worldwide. The average annual revenue of Raytheon is around $25 billion. It has the honor to be the largest producer of guided missiles in the world.

Raytheon Strengths

Raytheon is strong in many areas, specifically R&D (Research and development). Accurate researches and correct planning help Raytheon to produce highly specialized electrical equipments and weapons.

Another strong point of Raytheon is its highly developed intranet and internal communication systems. Because of the effective communication mediums, it is very easy to prompt messages, hold discussions, exchange views. All this makes work easier and thereby it consumes less time.

Raytheon has a very strong management team including highly qualified and specialized advisors, entrepreneurs, decision makers and workers. A stronger staff lets Raytheon operate well in its industry.

It is a company with loyal customers and thus a very good customer management area and a high rate of market share. This factor dominates all others, as this factors has led Raytheon signing contracts with government. Finally the brand name is far too famous and it maintains a strong brand reputation

Raytheon Weaknesses

Perhaps the biggest problems that Raytheon faces are the diseconomies to scale that include low morale. The workers are less motivated to work in the same and undiversified type of industry with much of the work done by machine. Workers are the leading force for any company, and when it loses their support, the company collapses.

Another important problem is a poor supply chain. It becomes very cumbersome and clumsy to pass on the goods to different companies hand to hand. A middle agent would have done it better.

Since Raytheon is a pro-military company, it hardly has scope for diversification ro expansion in any other industry and though it can expand geographically, it can not really grow.

Raytheon Opportunities

Since Raytheon is predominantly a dealer in the aerospace technologies, it has a whole new market ahead with recent developments in this scientific field. With latest successful tests in the aerospace department, Raytheon can pursue itself into this department

Since Raytheon is one of the largest military contractors of the world, takeovers, mergers and integration with other competitive company may benefit Raytheon in a number of ways including monopolistic position and economies of scale.

Raytheon Threats

Raytheon is still the 4th largest military contractor, a slight increase in competition or growth of Competitor Company may put Raytheon under threat and pressure.

An overall recession in economy and fluctuating government fiscal policies may lead to a decrease in demand of its appliances. It may also face budget cuts and profit margins will decrease significantly.

References

Raytheon SWOT analysis by Tom Lutzenberger. Retrieved from
http://www.ehow.com/about_5991225_raytheon-swot-analysis.html

http://www.wikiswot.com/SWOT/4_/Raytheon.html

Raytheon; the early days. Retrieved from
http://www.raytheon.com/ourcompany/history/early/index.html

Raytheon. Retrieved from
http://en.wikipedia.org/wiki/Raytheon

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