Every company or organization belongs to a market sector that includes three components: the remote environment, the industrial environment, and the operational environment. These factors influence the decisions organizations make to provide the best services and products while maintaining a high profit for the company. Lockheed Martin is a multinational aerospace manufacturer and advanced technology company, formed in 1995 by the merger of Lockheed Corporation with Martin Marietta (Lockheed Martin, 2008). Lockheed Martin is influenced by the macroeconomic environment, economic decisions made by the organization itself, and the industrial environment. Organization Industry Lockheed Martin is an organization that relies heavily on its defense contracts to generate revenue. In 2005, 95% of Lockheed Martin's revenue came from the U.S. Department of Defense, other U.S. federal government agencies, and foreign military customers (Defense News, 2007). Lockheed Martin earns this revenue by winning government contracts. As previously noted, Lockheed Martin has a large customer base with the US Department of Defense. The company is the largest provider of IT services, systems integration, and training to the government (Lockheed Martin, 2008). Other customers that provide revenue to Lockheed Martin are international governments and some commercial sales of products and services (Lockheed Martin, 2008). The broad business areas covered by Lockheed Martin are aeronautics, including tactical aircraft, air transport and aeronautical research and development, Space Systems, including space launch, commercial satellites, government satellites and strategic missiles, and Systems Group and IT, including missile and fire control, naval systems, platform integration, C4I, federal services, energy programs, government and commercial IT, and aviation/aerospace services. In 2007, these areas brought in sales of $12.3 billion, $8.2 billion, and $21.4 billion, respectively (Lockheed Martin, 2008). This organization belongs to the oligopolistic market structure. The oligopolistic market structure involves a few sellers of a standardized or differentiated product, a homogeneous oligopoly, or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is influenced by the decisions of other firms in the sector in determining price and production (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly there are significant barriers to entry into the market. These barriers exist because in these industries, three or four companies may have enough sales to realize economies of scale, making smaller companies unable to survive against the larger companies that control the industry (McConnell, 2005, p..
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