The Australian Defense Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016
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Synopsis
• Top level overview of the Australian defense industry
• A breakdown of the Australian defense industry by spend pattern valued from 2005 through 2010 and forecasted from 2011 through 2016
• A breakdown of the markets by segment valued from 2005 through 2010 and forecasted from 2011 through 2016
• Details of top companies active across the Australian defense industry
• Emerging trends and opportunities in the Australian defense industry in the last 12 months
Summary
This report offers insights into market opportunities and entry strategies adopted by foreign OEMs to gain a market share in the Australian defense industry. In particular, it offers in-depth analysis of the following:
• Market opportunity and attractiveness: Detailed analysis of the current market size and growth expectations during 2010–2016, including highlights of the key drivers, to aid understanding of the growth dynamics. It also benchmarks the sector against key global markets and provides detailed understanding of emerging opportunities in specific areas.
• Procurement dynamics: Trend analysis of imports and exports, along with their implications and impact on the Australian defense industry.
• Industry structure: Five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
• Market entry strategy: Analysis of possible ways to enter the market, along with knowledge of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
• Competitive landscape and strategic insights: Analysis of the competitive landscape of defense manufacturers in Australia. It provides an overview of the key defense companies (both domestic and foreign) along with insights such as key alliances, strategic initiatives and a brief financial analysis.
• Business environment and country risk: A range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.
Scope
• Analysis of defense industry market size from 2005 through 2010 and forecasts till 2016
• Analysis of defense budget allocation
• Benchmarking with key global markets
• Market opportunities
• Defense procurement dynamics
• Industry dynamics
• Market entry strategy
• Competitive landscape and strategic insights
• Business environment and country risk
Reasons To Buy
• Gain insight into the Australian defense industry with current, historic and forecast market values
• Gain insight into market opportunity and attractiveness
• Gain insight into industry procurement dynamics
• Gain insight into industry structure
• Gain insight into regulations governing the Australian defense industry and the potential market entry strategies with an expert analysis of the competitive structure
• Identify top companies in the Australian defense industry along with profiles of all those companies
Key Highlights
The Australian defense industry is expected to grow at a CAGR of XX.XX% from a value of US$XX.XX billion in 2011 to US$XX.XX billion by 2016. In 2009, the Australian government launched a new military modernization plan to upgrade its forces in order to counteract the threat posed by rising global terrorism, changing political dynamics in the Asia-Pacific region and the rising number of peacekeeping operations undertaken by Australian forces. Furthermore, defense expenditure as a percentage of Australia's gross domestic product (GDP) is expected to increase from its 2005 levels of XX.XX% to XX.XX% in 2016. However, while the capital expenditure as a percentage of defense budget peaked at XX.XX% in 2010, the government is expected to decrease this value to XX.XX% by 2016. This is due to the increased budget allocation for revenue expenditure in order to manage matters such as death, retirement benefits and support services.
Over the forecast period, the key market opportunities in the defense industry are expected to emerge in categories such as defense information technology, unmanned aerial vehicles (UAVs), helicopters, upgraded vehicles, armory, submarine rescue vehicles, sonar systems, troop protection equipment, patrolling ships, monitoring and security equipment.
Table of Contents
1 Introduction
1.1 About this Report
1.2 Definitions
1.3 Methodology
1.3.1 Secondary research
1.3.2 Primary research
1.3.3 Conventions
1.4 ICD Research Terrorism Index
1.5 About ICD Defense Intelligence Center
1.6 About Strategic Defence Intelligence (www.strategicdefenceintelligence.com)
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size and Forecast
3.1.1 Australian annual defense expenditure expected to reach US$XX.XX billion by 2016
3.1.2 Defense expenditure driven by military modernization, terror threats, changing Asia-Pacific power dynamics and peacekeeping missions
3.2 Analysis of Defense Budget Allocation
3.2.1 Capital expenditure share to decrease marginally by 2016
3.2.2 Australia expected to spend US$XX.XX billion on capital expenses over the forecast period
3.2.3 Australia's revenue expenditure expected to grow at a CAGR of XX.XX% over the forecast period
3.2.4 Defense expenditure likely to correspond with national economic growth
3.2.5 Budget allocation for air force, navy and army expected to increase in the near term
3.2.6 Allocation for air force is expected to increase moderately over the forecast period
3.2.7 Navy expenditure expected to increase marginally over the forecast period
3.2.8 Army expenditure expected to increase at a CAGR of XX.XX% over the forecast period
3.2.9 Budget allocation for defense support, intelligence and personnel expected to increase in line with defense budget
3.3 Homeland security market size and forecast
3.3.1 Australia's homeland security capital expenditure expected to be US$XX.XX billion over the forecast period
3.3.2 Border protection, aviation security, threat of terrorism and illegal fishing to drive homeland security expenditure
3.3.3 Australia faces minimal threat from foreign terrorist organizations
3.4 Benchmarking with Key Global Markets
3.4.1 Australia ranked fourteenth among top military spenders
3.4.2 Australian defense expenditure accounts for XX.XX% of global spend
3.4.3 Defense expenditure as percentage of GDP to increase over forecast period
3.4.4 Australia faces negligible threat from foreign terrorist organizations
3.4.5 Australia ranked ninth among top arms importing countries
3.4.6 Australia ranked twenty sixth among top arms exporting countries
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Increased surveillance needs expected to drive demand for UAVs
3.5.2 NCW program expected to drive demand for communication, data management and networking technologies
3.5.3 Land fleet capacity expansion expected to support demand for upgraded vehicles and armory
3.5.4 Submarines upgrade to drive the demand for submarine rescue vehicles, sonar systems, and ship management and control systems
3.5.5 Safety of troops continues to drive demand for protective equipment
3.5.6 Border security concerns expected to support demand for patrol vessels and monitoring and security equipment
4 Defense Procurement Dynamics
4.1 Import Market Dynamics
4.1.1 Defense imports expected to increase considerably over the forecast period
4.1.2 US set to dominate the Australia defense market
4.1.3 Imports of aircraft and missiles continue to increase
4.2 Export Market Dynamics
4.2.1 Defense exports expected to increase over forecast period
4.2.2 Ships constitute majority of exports
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low to medium
5.1.2 Bargaining power of buyer: high
5.1.3 Barrier to entry: high
5.1.4 Intensity of rivalry: medium to high
5.1.5 Threat of substitution: high
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 AIC program ensures the participation of local industry
6.1.2 Approval for foreign investment in defense sector set at US$XX.XX million
6.2 Market Entry Route
6.2.1 Establishing domestic subsidiary is preferred market entry route
6.2.2 Foreign OEMs sub-contract defense deals to domestic firms in order to enter the market
6.2.3 Foreign OEMs offer domestic companies access to global supply chains in order to enter the industry
6.2.4 DRSS provides opportunities to develop strong relations with the ADO
6.3 Key Challenges
6.3.1 Cost overruns and project delays continue to concern defense industry
6.3.2 Global supply chain pose challenge for foreign OEMs
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.1.1 Eight established foreign OEMs dominate the Australian defense market
7.2 Key Foreign Companies
7.2.1 Raytheon Australia: overview
7.2.2 Raytheon Australia: product focus
7.2.3 Raytheon Australia: recent announcements and strategic initiatives
7.2.4 Raytheon Australia: alliances
7.2.5 Raytheon Australia: recent contract wins
7.2.6 Raytheon Australia: financial analysis
7.2.7 Boeing Defense Australia: overview
7.2.8 Boeing Defense Australia: product focus
7.2.9 Boeing Defense Australia: recent announcements and strategic initiatives
7.2.10 Boeing Defense Australia: alliances
7.2.11 Boeing Defense Australia: recent contract wins
7.2.12 Boeing Defense Australia: financial analysis
7.2.13 Saab Systems: overview
7.2.14 Saab Systems: product focus
7.2.15 Saab Systems: recent announcements and strategic initiatives
7.2.16 Saab Systems: alliances
7.2.17 Saab Systems: recent contract wins
7.2.18 Saab Systems: financial analysis
7.2.19 General Dynamics Land Systems Australia: overview
7.2.20 General Dynamics Land Systems Australia: product focus
7.2.21 General Dynamics Land Systems Australia: recent announcements and strategic initiatives
7.2.22 General Dynamics Land Systems Australia: alliances
7.2.23 General Dynamics Land Systems Australia: recent contract wins
7.2.24 General Dynamics Land Systems Australia: financial analysis
7.2.25 Lockheed Martin Australia: overview
7.2.26 Lockheed Martin Australia: product focus
7.2.27 Lockheed Martin Australia: recent announcements and strategic initiatives
7.2.28 Lockheed Martin Australia: alliances
7.2.29 Lockheed Martin Australia: recent contract wins
7.2.30 Lockheed Martin Australia: financial analysis
7.2.31 Navantia: overview
7.2.32 Navantia: product focus
7.2.33 Navantia: recent announcements and strategic initiatives
7.2.34 Navantia: alliances
7.2.35 Navantia: recent contract wins
7.2.36 Navantia: financial analysis
7.2.37 Australian Aerospace: overview
7.2.38 Australian Aerospace: products and services
7.2.39 Australian Aerospace: recent announcements and strategic initiatives
7.2.40 Australian Aerospace: alliances
7.2.41 Australian Aerospace: recent contract wins
7.2.42 Australian Aerospace: financial analysis
7.2.43 Serco Sodexho Defense Services: overview
7.2.44 Serco Sodexho Defense Services: products and services
7.2.45 Serco Sodexho Defense Services: recent announcements and strategic initiatives
7.2.46 Serco Sodexho Defense Services: alliances
7.2.47 Serco Sodexho Defense Services: recent contract wins
7.2.48 Serco Sodexho Defense Services: financial analysis
7.2.49 Thales Australia: overview
7.2.50 Thales Australia: products and services
7.2.51 Thales Australia: recent announcements and strategic initiatives
7.2.52 Thales Australia: alliances
7.2.53 Thales Australia: recent contract wins
7.2.54 Thales Australia: financial analysis
7.3 Key Public Sector Companies
7.3.1 ASC: overview
7.3.2 ASC: products and services
7.3.3 ASC: recent announcements and strategic initiatives
7.3.4 ASC: alliances
7.3.5 ASC: recent contract wins
7.3.6 ASC: financial analysis
8 Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Business confidence indicator
8.1.2 Market capitalization trend – Australian Stock Exchange
8.1.3 FDI inflows by sector
8.1.4 Deployment of credit by sector
8.2 Economic Performance
8.2.1 GDP at constant prices (US dollars)
8.2.2 GDP per capita at constant prices (US dollars)
8.2.3 GDP at current prices (US dollars)
8.2.4 GDP per capita at current prices (US dollars)
8.2.5 GDP split by key segments
8.2.6 Agriculture net output at current prices (Australian dollars)
8.2.7 Agriculture net output at current prices (US dollars)
8.2.8 Agriculture net output at current prices as percentage of GDP
8.2.9 Manufacturing net output at current prices (Australian dollars)
8.2.10 Manufacturing net output at current prices (US dollars)
8.2.11 Manufacturing net output at current prices as percentage of GDP
8.2.12 Mining, manufacturing and utilities net output at current prices (Australian dollars)
8.2.13 Mining, manufacturing and utilities at current prices (US dollars)
8.2.14 Mining, manufacturing and utilities at current prices, as percentage of GDP
8.2.15 Construction net output at current prices (Australian dollars)
8.2.16 Construction net output at current prices, (US dollars)
8.2.17 Construction net output at current prices as a percentage of GDP
8.2.18 Crude steel production
8.2.19 Crude oil consumption
8.2.20 Inflation rate
8.2.21 Fiscal balance as a percentage of GDP
8.2.22 Current account balance as a percentage of GDP
8.2.23 Exports as a percentage of GDP
8.2.24 Imports as a percentage of GDP
8.2.25 Exports growth
8.2.26 Imports growth
8.2.27 External debt as a percentage of GDP
8.2.28 Annual average exchange rate US$–AUD
8.2.29 End of the period exchange rate US$–AUD
8.3 Infrastructure Quality and Availability
8.3.1 Total airports and sea ports
8.3.2 Passenger vehicle production volume
8.3.3 Commercial vehicle production volume
8.3.4 Automotive components exports trend
8.3.5 Automotive components imports trend
8.3.6 Passenger car penetration
8.3.7 Total installed capacity for electricity generation
8.3.8 Installed capacity for the generation of conventional thermal electricity
8.3.9 Electricity production
8.3.10 Installed capacity for the generation of hydro–electricity
8.3.11 Installed capacity for renewable electricity generation
8.3.12 Electricity consumption
8.3.13 Healthcare expenditure
8.3.14 Healthcare expenditure as percentage of GDP
8.3.15 Healthcare expenditure per capita
8.3.16 Total internet subscribers
8.3.17 Broadband internet subscribers
8.3.18 Personal computer penetration rate
8.3.19 Mobile phone penetration rate
8.4 Labor Force
8.4.1 Labor force
8.4.2 Unemployment rate
8.5 Demographics
8.5.1 Annual disposable income
8.5.2 Annual per capita disposable income
8.5.3 Annual consumer expenditure on food
8.5.4 Urban and rural population
8.5.5 Female percentage of population
8.5.6 Male percentage of population
8.5.7 Mean age of population
8.5.8 Median age of population
8.5.9 Population density
8.5.10 Age distribution of the total population
8.5.11 Age distribution of the male population
8.5.12 Age distribution of the female population
8.5.13 Number of households
8.6 Political and Social Risk
8.6.1 Political stability
8.6.2 Terrorism index
8.6.3 Transparency index
9 Appendix
9.1 Contact Us
9.2 About ICD Research
9.3 Disclaimer
List of Tables
Table 1: ICD Research Intelligence Terrorism Index
Table 2: Countries with Largest Share of Arms Imports*, 2006–2010
Table 3: Countries with Largest Share of Arms Exports*, 2006–2010
Table 4: FATA Approval for Acquisition in Defense in Australia
Table 5: Key Foreign OEMS and Subsidiaries
Table 6: Small Projects with Cost Overruns
Table 7: Major Projects with Cost Overruns
Table 8: List of Projects Delayed
Table 9: Australian Defense Industry, Competitive Landscape
Table 10: Raytheon Australia - Alliances
Table 11: Raytheon Australia - Recent Contract Wins
Table 12: Boeing Defense Australia - Alliances
Table 13: Boeing Defense Australia - Recent Contract Wins
Table 14: Saab Systems- Alliances
Table 15: Saab Systems - Recent Contract Wins
Table 16: General Dynamics Land Systems Australia - Recent Contract Wins
Table 17: Lockheed Martin Australia - Alliances
Table 18: Lockheed Martin Australia - Recent Contract Wins
Table 19: Navantia - Alliances
Table 20: Navantia - Recent Contract Wins
Table 21: Australian Aerospace - Alliances
Table 22: Australian Aerospace - Recent Contract Wins
Table 23: Serco Sodexho Defense Services - Recent Contract Wins
Table 24: Thales Australia - Alliances
Table 25: Thales Australia - Recent Contract Wins
Table 26: ASC - Alliances
Table 27: ASC - Recent Contract Wins
List of Figures
Figure 1: Australian Defense Expenditure, Historical and Forecast (US$ Billion), 2005–2016
Figure 2: Australian Defense Expenditure as a Percentage of GDP (US$ Billion), 2005–2016
Figure 3: Australian Defense Budget Split between Revenue and Capital Expenditure (%), 2005–2016
Figure 4: Australian Capital Budget Allocation (US$ billion), 2005–2016
Figure 5: Australian Revenue Budget Allocation, (US$ Billion) 2005–2016
Figure 6: Australian Defense Expenditure Growth and GDP Growth, 2005–2016
Figure 7: Australian Defense Budget Allocation (%), 2011
Figure 8: Australian Defense Air Force Expenditure (US$ Billion), 2005–2016
Figure 9: Australian Defense Naval Expenditure (US$ Billion), 2005–2016
Figure 10: Australian Defense Army Expenditure (US$ Billion), 2005–2016
Figure 11: Australian Defense Other Expenditure (US$ Billion), 2005–2016
Figure 12: Australian Homeland Security Budget (US$ million), 2005–2016
Figure 13: ICD Research Terrorism Heat Map, 2010
Figure 14: ICD Research Defense Terrorism Index, 2010
Figure 15: Benchmarking with Key Global Markets Defense Expenditure Growth (%), 2005–2016
Figure 16: Countries with the Largest Defense Expenditure Worldwide (US$ Billion), 2010 and 2016
Figure 17: Countries with the Largest Defense Expenditure as a Percentage of GDP (%), 2011
Figure 18: Australian Defense Imports trend (US$ Million), 2006–2010
Figure 19: Australian Defense Imports by Country (%),2006–2010 and 2010
Figure 20: Australian Defense Imports by Weapons Category (%), 2006–2010 and 2010
Figure 21: Australian Defense Exports (US$ million), 2006–2010
Figure 22: Australian Defense Exports by Weapons Category (%), 2006–2010 and 2010
Figure 23: Industry Dynamics - Porter's Five Forces Analysis
Figure 24: Saab Systems - Revenue Trend Analysis (US$ Million), FY2007–09
Figure 25: ASC - Revenue Trend Analysis (AUD Million), 2005–2009
Figure 26: ASC - Operating Profit Trend Analysis (AUD Million), 2005–2009
Figure 27: ASC - Net Profit Trend Analysis (AUD Million), 2006–2009
Figure 28: Australian Stock Exchange Market Capitalization trend (US$ Billion), Q12007–Q12010
Figure 29: Australian Stock Exchange Market Capitalization trend (US$ Billion), 2003–2009
Figure 30: Australian FDI Inflows by Sector (US$ Billion), 2003–2008
Figure 31: Australian Deployment of Credit by Sector (US$ Billion), 2003–2009
Figure 32: Australian GDP at Constant Prices (US$ Billion), 2003–2015
Figure 33: Australian GDP Per Capita at Constant Prices (US$), 2003–2015
Figure 34: Australian GDP at Current Prices (US$ Billion), 2003–2015
Figure 35: Australian GDP Per Capita at Current Prices (US$), 2003–2015
Figure 36: Australian GDP Split by Key Segments (%) 2003 and 2009
Figure 37: Australian Agriculture Net Output at Current Prices (AUD Billion), 2003–2015
Figure 38: Australian Agriculture Net Output at Current Prices (US$ Billion), 2003–2015
Figure 39: Australian Agriculture Net Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 40: Australian Manufacturing Net Output at Current Prices (AUD Billion), 2003–2015
Figure 41: Australian Manufacturing Net Output at Current Prices (US$ Billion), 2003–2015
Figure 42: Australian Manufacturing Net Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 43: Australian Mining, Manufacturing and Utilities Net Output at Current Prices (AUD Billion), 2003–2015
Figure 44: Australian Mining, Manufacturing and Utilities Net Output at Current Prices (US$ Billion), 2003–2015
Figure 45: Australian Mining, Manufacturing and Utilities Net Output at Current Prices as a percentage of GDP (%), 2003–2015
Figure 46: Australian Construction Net Output at Current Prices (AUD Billion), 2003–2015
Figure 47: Australian Construction Net Output at Current Prices (US$ Billion), 2003–2015
Figure 48: Australian Construction Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 49: Australian Crude Steel Production (Million Metric Tons), 2003–2015
Figure 50: Australian Crude Oil Consumption (Million Tons), 2003–2015
Figure 51: Australian Inflation Rate (%), 2003–2015
Figure 52: Australian Fiscal Balance as a Percentage of GDP(%), 2003–2015
Figure 53: Australian Current Account Balance as a Percentage of GDP (%), 2003–2009
Figure 54: Australian Exports as a Percentage of GDP (%), 2003–2015
Figure 55: Australian Imports as a Percentage of GDP (%), 2003–2015
Figure 56: Australian Exports Growth (%), 2003–2015
Figure 57: Australian Imports Growth(%), 2003–2015
Figure 58: Australian External Debt as a Percentage of GDP (%), 2003–2009
Figure 59: Australian Annual Average Exchange Rate US$–AUD, 2003–2009
Figure 60: Australian End of the Period Exchange Rate US$–AUD, 2003–2009
Figure 61: Australian Airports and Sea Ports (Number of), 2009
Figure 62: Australian Passenger Vehicle Production (Units), 2003–2015
Figure 63: Australian Commercial Vehicle Production (Units), 2003–2015
Figure 64: Australian Automotive Components Exports (US$ Billion), 2003–2015
Figure 65: Australian Automotive Components Imports (US$ Billion), 2003–2015
Figure 66: Australian Passenger Car Penetration (per 1000 people), 2003–2015
Figure 67: Australian Total Installed Capacity for Electricity Generation (Million Kilowatts), 2003–2015
Figure 68: Australian Installed Capacity for the Generation of Conventional Thermal Electricity (Million Kilowatts),
Figure 69: Australian Electricity Production (Billion Kilowatts Hours), 2003–2015
Figure 70: Australian Installed Capacity for the Generation of Hydro–electricity (Million Kilowatts), 2003–2015
Figure 71: Australian Installed Capacity for the Generation of Renewable Electricity (Billion Kilowatts), 2003–2015
Figure 72: Australian Electricity Consumption (Billion Kilowatt Hours), 2003–2015
Figure 73: Australian Healthcare Expenditure (US$ Billion), 2003–2015
Figure 74: Australian Healthcare Expenditure as a Percentage of GDP (%), 2003–2015
Figure 75: Australian Per Capita Healthcare Expenditure (US$), 2003–2015
Figure 76: Australian Internet Subscriptions (Millions), 2003–2015
Figure 77: Australian Broadband Internet Subscriptions (Millions), 2003–2015
Figure 78: Australian Personal Computer Penetration Rate (per 100 people), 2003–2015
Figure 79: Australian Mobile Phone Penetration (%), 2003–2015
Figure 80: Australian Size of Labor Force in 15–59 Age Group (Million), 2003–2015
Figure 81: Australian Unemployment Rate (%), 2003–2015
Figure 82: Australian Annual Disposable Income (US$ Billion), 2003–2015
Figure 83: Australian Annual Per Capita Disposable Income (US$), 2003–2015
Figure 84: Australian Consumer Expenditure on Food (US$ Billion), 2003–2015
Figure 85: Australian Urban and Rural Population (%), 2003–2015
Figure 86: Australian Female as Percentage of Population (%), 2003–2015
Figure 87: Australian Male as Percentage of Population (%), 2003–2015
Figure 88: Australian Mean Age of Population (Years), 2003–2015
Figure 89: Australian Median Age of Population (Years), 2003–2015
Figure 90: Australian Population Density (per Square Kilometer), 2003–2015
Figure 91: Australian Population Distribution by Age (%), 2003–2015
Figure 92: Australian Male Population Distribution by Age (%), 2003–2015
Figure 93: Australian Female Population Distribution by Age (%), 2003–2015
Figure 94: Australian Households, Number of (Million), 2003–2015
Figure 95: Global Terrorism Heat Map, 2010
Figure 96: Australian Transparency Index, 2003–2009
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