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Future of the UK Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2020

Published By :

Strategic Defence Intelligence

Published Date : Jan 2015

Category :

Defense and Security

No. of Pages : 181 Pages


The Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020, published by Strategic Defense Intelligence, provides readers with a detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

Key Findings

  • Over the historic period, UK defense expenditure registered a decline at a CAGR of 2.02%, decreasing from US$59.6 billion in 2011 to US$54.9 billion in 2015
  • UK’s military expenditure, valued at US$55.6 billion in 2016, is expected to increase to US$58.1 billion by 2020, registering a CAGR of 1.13% over the forecast period
  • UK’s military expenditure will be driven by the procurement of better defense systems and participation in peace keeping and conflict resolution operations
  • The Defense Ministry is expected to procure ballistic submarines, infantry fighting vehicle, multi-role aircraft, aircraft carriers and transport aircraft

Synopsis

This report offers detailed analysis of UK’s defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants

In particular, it provides an in-depth analysis of the following: 

  • UK defense industry market size and drivers: detailed analysis of the UK defense industry during 2016–2020, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns 
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to the army, navy, and air force. It also details the key challenges faced by defense market participants within the country
  • Porter’s Five Force analysis of the UK defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitutions, intensity of rivalry, and barriers to entry 
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years 
  • Market opportunities: details of the top five defense investment opportunities over the coming 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the UK defense industry. 
  • It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Reasons To Buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the UK defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the UK defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

Introduction
What is this Report About?
Definitions
Summary Methodology
SDI Terrorism Index
About Strategic Defence Intelligence
Executive Summary
Market Attractiveness and Emerging Opportunities
Defense Market Size Historical and Forecast
The UK's defense expenditure is expected to increase at a CAGR of 1.13%
Counter-terrorism activities and peacekeeping operations are the primary factors driving defense spending
The country's defense expenditure as a percentage of GDP expected to remain at an average 1.6% over the forecast period
Analysis of Defense Budget Allocation
Defense budget allocated for capital expenditure to increase
More than 90% of the UK's defense budget is expected to be assigned to enhance the country's defense capabilities
The allocation for peacekeeping operations is expected to increase over the forecast period owing to the ongoing war on ISIS
Reducing the number of troops is expected to affect defense capability budget allocation over the forecast period
Defense equipment and support to constitute 48.3% of defense capability budget during the forecast period
Allocation for war pension benefits to register a CAGR of 0.82% over the forecast period
Homeland Security Market Size and Forecast
Homeland security budget to decline at a CAGR of 3.85% over the forecast period
Border security and counter cyber attacks to be the key drivers in the homeland security market
UK faces some threat from terrorist organizations
Benchmarking with Key Global Markets
The UK ranks among major Global Defense Markets
The UK is expected to be among Top 10 defense spending countries in the world
The UK allocates a significant percentage of GDP towards defense
UK has high per-capita defense expenditure
UK faces some risk of terrorist attack
Market Opportunities: Key Trends and Growth Stimulators
Submarine - Ballistic
C2C4ISR- Land based
Multi-role Aircraft
Police Modernization and Counter Terrorism
IT Services- Networking
Infantry Fighting Vehicle
Transport Aircraft
Aircraft Carriers
Defense Procurement Market Dynamics
Import Market Dynamics
Defense imports expected to decline over the next five years
US stands as the leading arms exporter to UK; a trend expected to continue in the coming years
Missiles, aircraft and armored vehicles account for more than three quarters of UK arms imports
Export Market Dynamics
The UK's Defense Exports increased at a CAGR of 8.10% during the historic period
Saudi Arabia, the US, and India are the prime buyers of UK defense exports
Aircraft comprises a major part of the country's defense exports
Industry Dynamics
Five Forces Analysis
Bargaining power of supplier: low to medium
Bargaining power of buyer: high
Barrier to entry: medium
Intensity of rivalry: low to high
Threat of substitution: low to medium
Market Entry Strategy
Market Regulation
Offset policy aids development of the domestic defense industry
The UK permits 100% FDI in its defense industry
Market Entry Route
Joint weapons development programs are a viable market entry opportunity
Joint ventures open up new market entry strategy choices
Forming subsidiaries in the UK and the acquisition of domestic companies provide good market entry opportunities
Key Challenges
Consistent defense budget cuts to have negative implications for defense companies
Dominance of domestic and EU defense companies impede the progress of non-European firms
Competitive Landscape and Strategic Insights
Competitive Landscape Overview
Key Domestic Companies
BAE Systems Plc.: overview
BAE Systems Plc.: Products and services
BAE Systems Plc: recent announcements and strategic initiatives
BAE Systems Plc.: alliances
BAE Systems Plc.: Recent contract wins
BAE Systems Plc: financial analysis
GKN Aerospace Services: overview
GKN Aerospace Services: products and services
GKN Aerospace Services: recent announcements and strategic initiatives
GKN Aerospace Services: alliances
GKN Aerospace Services: recent contract wins
GKN Aerospace Services: financial analysis
Rolls-Royce Plc.: overview
Rolls-Royce Plc.: products and services
Rolls-Royce Plc: recent announcements and strategic initiatives
Rolls-Royce Plc.: alliances
Rolls-Royce Plc: recent contract wins
Rolls-Royce Plc: financial analysis
Babcock International Group Plc: overview
Babcock International Group Plc: products and services
Babcock International Group Plc: recent announcements and strategic initiatives
Babcock International Group Plc: alliances
Babcock International Group Plc: recent contract wins
Babcock International Group Plc: financial analysis
Key Foreign Companies
AgustaWestland: overview
AgustaWestland: products and services
AgustaWestland: recent announcements and strategic initiatives
AgustaWestland: alliances
AgustaWestland: recent contract wins
Thales UK: overview
Thales UK: products and services
Thales UK: recent announcements and strategic initiatives
Thales UK: alliances
Thales UK: recent contract wins
General Dynamics UK Ltd: overview
General Dynamics UK Ltd: products and services
General Dynamics UK Ltd: recent announcements and strategic initiatives
General Dynamics UK Ltd: alliances
General Dynamics UK Ltd: recent contract wins
Boeing UK: overview
Boeing UK: products and services
Boeing UK: recent announcements and strategic initiatives
Boeing UK: alliances
Boeing UK: recent contract wins
Boeing UK: financial analysis
L-3 TRL: overview
L-3 TRL: products and services
L-3 TRL: recent announcements and strategic initiatives
L-3 TRL: alliances
Northrop Grumman UK: overview
Northrop Grumman UK: products and services
Northrop Grumman UK: recent announcements and strategic initiatives
Northrop Grumman UK: alliances
Northrop Grumman UK: recent contract wins
Lockheed Martin UK Ltd: overview
Lockheed Martin UK Ltd: products and services
Lockheed Martin UK Ltd: recent announcements and strategic initiatives
Lockheed Martin UK Ltd: alliances
Lockheed Martin UK Ltd: recent contract wins
EADS UK: overview
EADS UK: products and services
EADS UK: recent announcements and strategic initiatives
EADS UK: alliances
EADS UK: recent contract wins
Business Environment and Country Risk
Demographics & Social Statistics
Population -Rural
Population - Urban
Population -Number of Households
Economic Performance
Gross Domestic Product Per Capita
Gross Domestic Product in Current US$
Exports of goods and services, current prices
Imports of goods and services, current prices
Gross National Disposable Income, current prices
Manufacturing Output, US$ Billion
Customer Price Index
Wholesale Price Index
Local Currency Unit per US$, Period Average
Local Currency Unit per Euro
Interest Rate (Lending)
Real Interest Rate (%)
Market Capitalization of Listed Companies (US$ Billions)
Market Capitalization of Listed Companies (% GDP)
Government Cash Surplus/Deficit, Local Currency
Government Cash Surplus/Deficit, (% of GDP, LCU)
Central Government Debt, (LCU Billion)
Central Government Debt (% of GDP)
Goods Exports as % of GDP
Goods Imports as % of GDP
Goods Trade Surplus/Deficit as % of GDP
Services Imports as a % of GDP
Services Exports as a % of GDP
Services Trade Surplus/Deficit as a % of GDP
Foreign Direct Investment, Current Values in Billion
Foreign Direct Investment as a % of GDP
International Reserves, including Gold (US$ Bn)
Energy and Utilities
Total Conventional Thermal Electricity Generation
Net Hydroelectric Power Generation
Net Nuclear Electricity Net Generation
Total Conventional Thermal Electricity Installed Capacity
Total Electricity Exports
Total Electricity Imports
Proved Reserves of Natural Gas
Total Petroleum Consumption
Crude Oil Proved Reserves
Total Non-Hydro Renewable Electricity Net Generation
Infrastructure Quality and Availability
Roads, Total Network
Rail Lines
Air Transport, Freight
Overall Construction
Minerals
Mining, Manufacturing, Utilities Output
Technology
Research and Development Expenditure
Patents Granted
Telecommunications
Fixed Telephone Lines
Telephone Lines Penetration Rate

Appendix
About SDI
Disclaimer

List of Table


Table 1: UK Defense Expenditure (US$ Billion), 2011-2015
Table 2: UK Defense Expenditure (US$ Billion), 2016-2020
Table 3: UK Defense Expenditure (GBP Billion), 2011-2015
Table 4: UK Defense Expenditure (GBP Billion), 2016-2020
Table 5: UK GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2011-2015
Table 6: UK GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016-2020
Table 7: UK Defense Budget Split between Capital and Revenue Expenditure (%), 2011-2015
Table 8: UK Defense Budget Split between Capital and Revenue Expenditure (%), 2016-2020
Table 9: UK Defense Budget Break up(%), 2011-2015
Table 10: UK Defense Budget Break up (%), 2016-2020
Table 11: UK Peacekeeping Services Budget (US$ Billion), 2011-2015
Table 12: UK Peacekeeping Services Budget (US$ Billion), 2016-2020
Table 13: UK Peacekeeping Services Budget (GBP Billion), 2011-2015
Table 14: UK Peacekeeping Services Budget (GBP Billion), 2016-2020
Table 15: UK Defense Capability Budget (US$ Billion), 2011-2015
Table 16: UK Defense Capability Budget (US$ Billion), 2016-2020
Table 17: UK Defense Capability Budget (GBP Billion), 2011-2015
Table 18: UK Defense Capability Budget (GBP Billion), 2016-2020
Table 19: UK Defense Capability Break up (%), 2011-2015
Table 20: UK Defense Capability Break up (%), 2016-2020
Table 21: UK War Pension Benefits Budget (US$ Billion), 2011-2015
Table 22: UK War Pension Benefits Budget (US$ Billion), 2016-2020
Table 23: UK War Pension Benefits Budget (GBP Billion), 2011-2015
Table 24: UK War Pension Benefits Budget (GBP Billion), 2016-2020
Table 25: UK Homeland Security Expenditure (US$ Billion), 2011-2015
Table 26: UK Homeland Security Expenditure (US$ Billion), 2016-2020
Table 27: UK Homeland Security Expenditure (GBP Billion), 2011-2015
Table 28: UK Homeland Security Expenditure (GBP Billion), 2016-2020
Table 29: Benchmarking with Key Markets - 2011-2015vs. 2016-2020
Table 30: SDI Terrorism Index
Table 31: UK Defense Offset Regulations
Table 32: UK's Participation in International Defense Development Programs
Table 33: BAE Systems Plc. - Product Focus
Table 34: BAE Systems Plc. - Alliances
Table 35: BAE Systems Plc. - Recent Contract Wins
Table 36: GKN Aerospace Services - Product Focus
Table 37: GKN Aerospace Services - Alliances
Table 38: GKN Aerospace Services - Recent Contract Wins
Table 39: Rolls-Royce Plc. - Product Focus
Table 40: Rolls-Royce Plc. - Alliances
Table 41: Rolls-Royce Plc. - Recent Contract Wins
Table 42: Babcock International Group Plc. - Product Focus
Table 43: Babcock International Group Plc. - Alliances
Table 44: Babcock International Group Plc. - Recent Contract Wins
Table 45: AgustaWestland - Product Focus
Table 46: AgustaWestland - Alliances
Table 47: AgustaWestland - Recent Contract Wins
Table 48: Thales UK - Product Focus
Table 49: Thales UK - Alliances
Table 50: Thales UK - Recent Contract Wins
Table 51: General Dynamics UK Ltd - Product Focus
Table 52: General Dynamics UK Ltd - Alliances
Table 53: General Dynamics UK Ltd - Recent Contract Wins
Table 54: Boeing UK - Product Focus
Table 55: Boeing UK - Alliances
Table 56: Boeing UK - Recent Contract Wins
Table 57: L-3 TRL - Product Focus
Table 58: L-3 TRL - Alliances
Table 59: Northrop Grumman UK - Product Focus
Table 60: Northrop Grumman UK - Alliances
Table 61: Northrop Grumman UK - Recent Contract Wins
Table 62: Lockheed Martin UK Ltd - Product Focus
Table 63: Lockheed Martin UK Ltd - Alliances
Table 64: Lockheed Martin UK Ltd - Recent Contract Wins
Table 65: EADS UK - Product Focus
Table 66: EADS UK - Alliances
Table 67: EADS UK - Recent Contract Wins

List of Chart


Figure 1: UK Defense Expenditure (US$ Billion), 2011-2015
Figure 2: UK Defense Expenditure (US$ Billion), 2016-2020
Figure 3: UK Defense Expenditure (GBP Billion), 2011-2015
Figure 4: UK Defense Expenditure (GBP Billion), 2016-2020
Figure 5: UK GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2011-2015
Figure 6: UK GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016-2020
Figure 7:UK Defense Budget Split between Capital and Revenue Expenditure (%), 2011-2015
Figure 8: UK Defense Budget Split between Capital and Revenue Expenditure (%), 2016-2020
Figure 9: UK Defense Budget Break up(%), 2011-2015
Figure 10: UK Defense Budget Break up (%), 2016-2020
Figure 11: UK Peacekeeping Services Budget (US$ Billion), 2011-2015
Figure 12:UK Peacekeeping Services Budget (US$ Billion), 2016-2020
Figure 13: UK Peacekeeping Services Budget (GBP Billion), 2011-2015
Figure 14:UK Peacekeeping Services Budget (GBP Billion), 2016-2020
Figure 15: UK Defense Capability Budget (US$ Billion), 2011-2015
Figure 16:UK Defense Capability Budget (US$ Billion), 2016-2020
Figure 17: UK Defense Capability Budget (GBP Billion), 2011-2015
Figure 18:UK Defense Capability Budget (GBP Billion), 2016-2020
Figure 19: UK Defense Capability Break up (%), 2011-2015
Figure 20:UK Defense Capability Break up (%), 2016-2020
Figure 21: UK War Pension Benefits Budget (US$ Billion), 2011-2015
Figure 22: UK War Pension Benefits Budget (US$ Billion), 2016-2020
Figure 23: UK War Pension Benefits Budget (GBP Billion), 2011-2015
Figure 24: UK War Pension Benefits Budget (GBP Billion), 2016-2020
Figure 25: UK Homeland Security Expenditure (US$ Billion), 2011-2015
Figure 26:UK Homeland Security Expenditure (US$ Billion), 2016-2020
Figure 27: UK Homeland Security Expenditure (GBP Billion), 2011-2015
Figure 28:UK Homeland Security Expenditure (GBP Billion), 2016-2020
Figure 29: SDI Terrorism Heat Map, 2015
Figure 30: SDI Terrorism Index, 2015
Figure 31: Benchmarking with Key Markets - 2011-2015vs. 2016-2020
Figure 32: Defense Expenditure of the World's Largest Military Spenders (US$ Billion),2015and 2020
Figure 33: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2015
Figure 34: Per-capita Defense Expenditure of Largest Military Spenders in the World (US$), 2015
Figure 35: SDI Terrorism Index, 2015
Figure 36: Submarine - Ballistic Market Size (US$ Billion), 2015-2025
Figure 37: C2C4ISR - Land based Market Size (US$ Billion), 2015-2025
Figure 38: Multi-role Aircraft Market Size (US$ Billion), 2015-2025
Figure 39: Police Modernization and Counter Terrorism Market Size (US$ Billion), 2015-2025
Figure 40: Networking Market Size (US$ Billion), 2015-2025
Figure 41: Infantry Fighting Vehicle Market Size (US$ Million), 2015-2025
Figure 42: Transport Aircraft Market Size (US$ Million), 2015-2025
Figure 43: Aircraft Carriers Market Size (US$ Million), 2015-2025
Figure 44: UK Defense Import Trend, 2009-2013(TIV values)
Figure 45: UK Defense Imports by Country (%), 2009-2013
Figure 46: UK Defense Imports by Category (%), 2009-2013
Figure 47: UK Defense Export Trend, 2009-2013(TIV values)
Figure 48: UK Defense Exports by Country (%), 2009-2013
Figure 49: UK Defense Exports by Category (%), 2009-2013
Figure 50: Industry Dynamics - Porter's Five Forces Analysis
Figure 51: BAE Systems - Revenue Trend Analysis (GBP billion), 2009-2013
Figure 52: BAE Systems - Operating Profit (GBP billion), 2009-2013
Figure 53: BAE Systems - Net Profit Trend Analysis (GBP billion), 2009-2013
Figure 54: GKN Aerospace Services - Revenue Trend Analysis (GBP billion), 2009-2013
Figure 55: GKN Aerospace Services - Operating Profit Trend Analysis (GBP million), 2009-2013
Figure 56: GKN Aerospace Services - Net Profit Trend Analysis, (GBP million), 2009-2013
Figure 57: Rolls-Royce Plc. - Revenue Trend Analysis (GBP Billion), 2009-2013
Figure 58: Rolls-Royce Plc. - Operating Profit Trend Analysis (GBP Billion), 2009-2013
Figure 59: Rolls-Royce Plc. - Net Profit Trend Analysis (GBP Billion), 2009-2013
Figure 60: Babcock International Group Plc. - Revenue Trend Analysis (GBP Billion), 2009-2013
Figure 61: Babcock International Group Plc. - Operating Profit Trend Analysis (GBP Million), 2009-2013
Figure 62: Babcock International Group Plc. - Net Profit Trend Analysis (GBP Million), 2009-2013
Figure 63: Boeing - Revenue Trend Analysis (US$ Billion), 2009-2013
Figure 64: Boeing - Operating Profit Trend Analysis (US$ Billion), 2009-2013
Figure 65: Boeing - Net Profit Trend Analysis (US$ Billion), 2009-2013
Figure 66: UK Population - Rural (Millions), 2016-2025
Figure 67: UK Population - Urban (Millions), 2016-2025
Figure 68: UK Population - Number of Households (Millions), 2008-2017
Figure 69: UK GDP Per Capita, 2011-2020
Figure 70: UK GDP (in US$ Bn) , 2016-2025
Figure 71: UK Exports of goods,( US$ Billions), 2002-2011
Figure 72: UK Imports of goods and services, 2002-2011
Figure 73: UK Gross National Disposable Income, current prices (US$ Billion), 2002- 2011
Figure 74: UK Manufacturing Output, (US$ Bn), 2003- 2011
Figure 75: UK Customer Price Index, 2008-2017
Figure 76: UK Wholesale Price Index, 2002-2011
Figure 77: UK GBP  per US$, 2009-2018
Figure 78: UK GBP per Euro,2008-2017
Figure 79: UK Lending Rate(%), 2002-2011
Figure 80: UK Real Interest Rate (%), 2002-2011
Figure 81: UK Market Capitalization of listed companies (US$ Billion), 2003-2012
Figure 82: UK Market Capitalization of listed companies(%GDP), 2002-2011
Figure 83: UK Government Cash surplus/deficit (LCU Billion), 2004-2011
Figure 84: UK Government Cash surplus/deficit(% of GDP LCU), 2002-2011
Figure 85: UK Central government Debt, (Local Currency Billion), 2002-2011
Figure 86: UK Central government Debt (% of GDP), 2003-2011
Figure 87: UK Goods exports as % of GDP, 2002-2011
Figure 88: UK Goods imports as % of GDP, 2002-2011
Figure 89: UK Goods trade surplus/deficit as % of GDP, 2002-2011
Figure 90: UK Services Imports as a % of GDP2002-2011
Figure 91: UK Services exports as a % of GDP, 2002-2011
Figure 92: UK Services trade surplus/deficit as a % of GDP, 2002-2011
Figure 93: UKFDI, net (Current US$ Bn), 2002-2011
Figure 94: UK Net FDI as a % of GDP, 2002-2011
Figure 95: UK international reserves, including Gold (US$ Bn), 2002-2011
Figure 96: UK Natural Gas Production(Billion Cubic Feet), 2002-2011
Figure 97: UK Hydroelectricity Generation (Billion Kilowatt hours),2002-2011
Figure 98: UK Nuclear Electricity Net Generation(Billion Kilowatt hours), 2002-2011
Figure 99: UK Total Thermal Electricity installed capacity (Million Kilowatt), 2001-2010
Figure 100: UK Total Electricity Exports (Billion Kilowatt), 2002-2011
Figure 101: UK Total Electricity Imports(Billion KW), 2002-2011
Figure 102: UK proved reserves of natural gas(Trillion cubic feet), 2004-2013
Figure 103: UK total petroleum consumption (Thousand Barrels per day), 2003-2012
Figure 104: UK Crude oil proved reserves (Billion Barrels), 2002-2011
Figure 105: UK Total Non-Hydro Renewable Electricity net generation  (Bn KW), 2002-2011
Figure 106: UK Roads, Total Network (km), 2002-2010
Figure 107: UK Rail Lines(total route km), 2004-2011
Figure 108: UK Air transport, freight (million ton-km), 2002-2011
Figure 109: UK Overall Construction, 2007-2016
Figure 110: UK Mining, manufacturing, and utilities output (US$ Bn), 2002-2011
Figure 111: UK research and development expenditure (LCU Thousands), 2001-2010
Figure 112: UK Patents Granted, 2003-2012
Figure 113: UK Telephone Lines (in Mn) , 2002-2011
Figure 114: UK Telephone lines penetration rate (per 100 people), 2002-2011

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