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Defence strategic partnership: steps to start a collaboration that leads to sustainable growth



A defence strategic partnership is an agreement between two or more parties that aims to increase the business opportunities available to the parties involved. These agreements are often formed between companies in different countries, and they may include joint ventures or other forms of cooperation.


The main reason for companies to form a defence strategic partnership is to mitigate risk.


The most common types of risk are financial, operational and reputational. A defence strategic partnership can help to mitigate all of these risks.


Financial risk is the risk that one company will have to pay another company for damages or losses that they may have caused them. This can include legal fees, compensation, and any other expenses incurred by the other company as a result of something that has gone wrong.


Operational risk is the risk that one company will not be able to deliver on their responsibilities under their contract with another company because they do not have enough resources available or they do not have the right skill set available within their organisation.


Reputational risk is the risk that one company may suffer damage to their reputation if they fail to fulfil their obligations under their contract with another company in a timely manner or at all (for example if they go out of business).


Moreover, there are other 3 common reasons for companies to form a defence strategic partnership which are:


1. To increase their sales and profits by gaining access to new markets, customers, and suppliers


2. To boost their productivity, innovation and competitiveness by leveraging the power of the combined resources and capabilities of both companies


3. To reduce costs through economies of scale


A successful defence business strategic partnership can be a powerful way to bring the best of both parties together. It can also be a risky endeavour, and it’s important to make sure you do it right—for your company, and for the industry as a whole.

Here are three examples of successful defence business strategic partnerships:


1. Boeing and Lockheed Martin have been working together since the mid-70s on projects like the B-2 Spirit bomber. The two companies have entered into more than 30 contracts together, including one for $1 billion in 2015.


2. Airbus purchased 50% of Embraer SA’s EMB-314 Super Tucano aircraft program in 2016, giving them access to an aircraft design that is relatively inexpensive but effective in military use cases like counter-insurgency and border patrol operations. The deal is estimated to be worth $4 billion over 10 years at current prices for Embraer's shares in the program.


3. Northrop Grumman acquired Orbital ATK in 2018, creating a new aerospace and defense powerhouse with an estimated revenue of $26 billion annually by 2020 (compared with $10 billion each before the merger).


Important factors to analyse and define before forming a defence alliance or a strategic partnership


There are a number of factors to analyse and define before forming a defence alliance or a strategic partnership. These include:


#1) The degree of mutual trust between the countries involved in the alliance or partnership. This is important because it determines whether or not the countries will work together to achieve common goals. If they do not trust each other, then they will not be able to coordinate their efforts effectively and efficiently.


#2) The level of commitment that each country has towards forming an alliance or partnership with other countries. This factor can be determined by looking at how much time and effort each country puts into making sure that this alliance succeeds; for example, if one country is willing to spend more money than another country on an alliance then this indicates greater commitment towards forming an alliance or partnership with other countries.


#3) Defining the relationship between partners, including their mutual interests and goals, as well as the conditions under which they can join forces in case of aggression. According to this matter, it is important that both sides agree on these goals because otherwise, it will be very difficult for them to cooperate effectively.


#4) Identifying potential threats that may be directed against each member of the alliance: military, political, and economic. The first step in identifying potential threats is to examine the history of interactions between all members of the alliance. This includes examining previous alliances, trade agreements, and treaties. History often repeats itself, so it is important to understand how past interactions have affected current relationships.


#5) Compiling information about potential allies' military potentials and their capabilities in the field of defence industry development (including scientific research). The main purpose of this is to assess the strength of a partner and its ability to assist you in achieving your goals. This will help you make decisions about whether or not you should form an alliance with this particular partner.


Steps to start a collaboration that leads to sustainable growth


Sustainable growth in defence strategic collaboration is a process that results in a long-term, sustainable increase in the value of a company. The process involves identifying and leveraging opportunities to increase value and reach the potential of each opportunity.


Moreover, sustainable growth in this sense is a process of ensuring that the defence industry can sustain itself, while also ensuring that the needs of society are met. This means maintaining a balance between profitability, innovation, and sustainability.

Sustainable growth in defence strategic collaboration requires a number of important steps to be taken.


To begin with, the company should have a clear vision of the future. This includes understanding the current and future trends in demand for their products, as well as how those trends will change over time.


In addition to this, they must also have a thorough understanding of their competitors' strategies, strengths, weaknesses and opportunities. This will help them create their own strategy that is unique and innovative while still being able to compete effectively against their competitors.


The company also needs to develop a strong relationship with government agencies and military bases that are interested in buying their products on an ongoing basis. These relationships will help ensure that they continue receiving orders from these buyers so that they can continue growing sustainably over time without having to worry about losing customers or having trouble finding new ones due to a lack of demand for their products.


Let us help you enter the Aerospace and Defence industry! Contact us at associate@premiumconcept.be and connect with us.

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