Diversification - The art of survival

Congratulations to BAE Systems on the recent contract with South Korea to upgrade aircraft. "Nothing new!" many will shout; but what is very interesting is the fact that BAE Systems are not the OEM of the aircraft.

Yes, BAE Systems are a world leading manufacturer of aerospace vehicles and equipment and yes they provide outstanding support to the armed forces who operate BAE Systems aircraft. This marks a real departure in their strategy of providing services. Upgrading an aircraft system from another OEM.

Understanding the different engineering layouts and getting the bill of materials correct will prove to a real challenge, especially as the OEM of the aircraft (who will also have very strong relationships with component suppliers) was beaten in the competition.

A great story, which could only have been better was if the work was being undertaken in the UK.

Let's hope that this departure for BAE Systems in upgrading other OEMs aircrafts for clients is successful and not only leads to more work for the contractor but strengthens the companies position in the global defence and security sector.

http://www.theguardian.com/business/2013/dec/23/bae-systems-contract-south-korea-f16-texas

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