Your group needs to submit a comprehensive report to the Board of Directors of ABC Ltd recommending a particular market that ABC Ltd should consider for expanding internationally for future growth.
International Expansion Strategy
ABC Ltd is an organization in the Defence Industry of Australia. ABC limited is a contractor of defence equipments maintenance and repair. This means that some of the defence equipments owned by Royal Australian Navy (RAN), Australian Army, Royal Australian Air Force (RAAF) go to ABC Ltd for regular and timely maintenance or irregular maintenance which mostly consists of repairs. The defence equipments have a predefined period after which maintenance on the machines must be done. Thus the defence machines and equipments like naval ships, the helicopters and the artillery guns at their time of maintenance as per the instructions of Original Equipment Manufacturers (OEMs) are maintained by ABC Ltd. Also there are cases when some of the components of these machines fail. In these conditions also, the machines are repaired by the organization. The organization has required technical and engineering capabilities to do the activities involved in its business is one of the major players in the business of defence maintenance contractors. However the industry under which the organization falls is Defence Industry. Defence Industry is big industry in Australia and the major customers with in Australia for the organizations like ABC Ltd are RAN, RAAF, Army and other ‘tri-service’ units.
Global Industry Structure
Global Defence Industry is a very big industry with current estimated expenditure of about $2 trillion by all the countries in the world for defence purposes. The defence industry includes manufacturing the defence equipments, servicing these equipments, preparing software and many other related activities. The country which is the largest contributor to the expenditure done by world on defence is USA. In 2011, the total global expenditure on defence was about $1.6 trillion out of which $711 billion was spent by USA alone. USA not only the largest customer but also the largest supplier in the defence industry as it is the largest exporter of defence related equipments and services to the world. The next largest player in this industry is China which has spent $143 billion on its defence. Like USA, China is also one of the biggest exporters as well as biggest importers of defence equipments and services. But it must be realized that the expenditures done by these countries are the figures of only for business related to defence equipments and services but also include the other expenditures like paying salary to the armed forces and other non equipment purchase expenditures. (Deloitte Global Services Limited, 2012)