Running head: COMPETITIVE EXCELLENCE AT RAYTHEON
0COMPETITIVE EXCELLENCE AT RAYTHEON
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Raytheons Change towards Competitive Excellence
Jose RodriguezWestern New England UniversityEMGT 619-40
January, 15, 2013
IntroductionRaytheon Company is a frontrunner in the field of
defense for United States. It produces guided missiles and other
weapons used by the defense department. Raytheon has beaten a host
of other companies that have competed with it for the coveted
position it holds as one of Americas main defense contractors, and
to achieve this, it has employed a number of tactics to enable it
achieve competitive excellence. This report will identify some of
the steps that Raytheon has taken towards gaining competitive
excellence. This report draws from several analyses carried out on
the company and the conclusions drawn from them. The steps that
Raytheon has taken in order to reach the heights it has reached
today are not only outlined but also elaborated upon.Raytheons
Change towards Competitive Excellence
Raytheon is characterized as one of the largest military
contractors in the world and largest producer of guided-missiles in
the U.S. Based in the U.S; it has been ranked the fourth largest
defense contractor, with revenues averaging $25 billion annually as
the benchmark.
The major competitors of Raytheon are Lockheed Martin, General
Dynamics and Northrop Grumman. These companies are in cutthroat
competition with Raytheon, and Raytheon has had to come up with
several strategies to beat off the competition effectively. They
have all participated in mergers and acquisitions in order to
maintain their competitive advantage but in doing so; have not only
been able to boost their profiles, revenues or capital. In order to
remain competitive in the midst of such creative strategies,
Raytheon also sought to boost its growth in revenue and capital by
mergers and acquisitions (Sheth, & Sisodia, 2001). The company
acquired Texas Instruments and E-Systems and performed a merger
with Hughes Aircraft Company. The acquisitions of Raytheon formed
the Space and Airborne Systems (SAS) business unit, and the company
undertook great effort to ensure that Raytheon and SAS worked as a
unit. These acquisitions made Raytheon the huge company it needed
to be in order to ward off competition, however, the acquisitions
left Raytheon in a multi-billion debt, and the company made it a
commitment and a fundamental aim to lay off the debt. Hence it
adopted the six-sigma business strategy in order to get out of the
debt. The six sigma strategy not only enabled Raytheon recover from
the debt but also generated over $2 billion financial benefits. The
strategy involves using a project-driven approach in management to
consistently improve the products or services of a company (Kwak
& Anbari, 2006). This is achieved by incessantly reducing the
defects of the company in its product or service delivery. It
requires a thorough understanding of the needs of the customer.
Using this strategy, Raytheon was able to reduce depot maintenance
inspection time by about 85 percent, which was a major breakthrough
(Kwak & Anbari, 2006).The competitive excellence strategy that
has always been part of Raytheon since its inception is the need to
provide customers with the best quality of services. The company
seeks to give its customers world-class experience with the
products that they produce. It produces high-end products that meet
international standards, and as such it has been able to maintain a
fair consistency in its clientele list. The companys motto, which
is Customer Success is Our Mission, captures this strategy of
achieving competitive excellence succinctly. In fact, research
indicates that Raytheon is moving towards a best-value approach in
its supply chains, and this is working very well for the company
(Ketchen, Rebarick, Hult, & Meyer, 2008).Raytheon has also
sought alternative ways to sustain the success it has achieved
through the years. With the foreknowledge that the Obama
administration would spend much less than the Bush administration
in defense, the company sought alternative ways of procuring money
(Kohlrus, 2009). Raytheon stands at an advantaged point in that
while the costs for transportation of ,military materials has been
cut, what Raytheon focuses on radars, missiles and electronic
systems has remained fairly consistent in U.S spending. Thus,
Raytheon has been able to weather the Obama Storm. Nonetheless, the
company has maintained a positive advantage over its competitors as
far as investment is concerned, because of its superior gross and
net profit margin, its better return on equity and return on
capital. Hence, Raytheon still remains the preferable company in
which to invest over its rivals. Indeed, understanding that
competitive success requires definite strategies, Raytheon has
taken the most decisive and creative steps towards achieving
competitive success. The company has been able to maintain its
competitive edge from several worthy competitors by the steps it
took in acquisition, six sigma management strategy, sound economic
forecasting and maintaining a healthy profile in the stocks market.
Hence, Raytheon has been able to achieve competitive
excellence.
ReferencesKetchen, D. J., Rebarick, W., Hult, G. T. M., &
Meyer, D. (2008). Best value supply chains: A key competitive
weapon for the 21st century.Business Horizons,51(3), 235-243.
Kohlrus, T. (2009).Strategic analysis of Raytheon(Doctoral
dissertation).
Kwak, Y. H., & Anbari, F. T. (2006). Benefits, obstacles,
and future of six sigma approach.Technovation,26(5), 708-715.
Sheth, J. N., & Sisodia, R. (2001).The rule of three:
surviving and thriving in competitive markets. Simon and
Schuster.
