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Executive Summary

Northrop is one of the global companies well known for mastering the art of innovation. The company has established an environmental record and thus, socially responsible. An analysis of its financial performance illustrates that the company’s annual returns have been growing gradually, and it is therefore postulated that the company’s future financial performance will as well be higher than the current records. The methodology used in the analysis is the case study analysis method since the analysis has been derived from the already established data. It is therefore recommended that Reid Investment Group acquires this company in order to boost its annual returns, expand its global operations, considering the fact that this is an already established global company and attain a competitive advantage.

Company Profile

Originally established in 1939 in California as Northrop Corporation, the company was reincorporated in 1985 in Delaware. Northrop Corporation, in 1994, combined with Grumman Aerospace to form the contemporary Northrop Grumman Company. Initially, both companies operated in the airplane manufacturing industry, for instance, the Grumman Aerospace was well-known for constructing the Apollo Lunar Module. Northrop Grumman Corporation is currently considered as a global defense and aerospace technology company, and in 2010, the company was rated as the fourth largest global defense contractor, as well as the largest designer of naval vessels.

Northrop Grumman Corporation offers products, solution and services in shipbuilding, electronics, aerospace, information systems and technical services. Some of the products that this company manufactures include military aircraft and vessels, satellites aircraft carriers, sensors and radar systems, and missile defense systems. The company has also acquired other companies, formed joined ventures and merged with other companies in an aim to expand its operations and increase its revenues. Some of the company’s affiliated partners and companies include Remotec, which is the leading remote controller vehicles manufacturer. Another subsidiary is Park Air Systems, which deals in the manufacturer of communications equipment, aerial navigation and the control of air traffic, for the global customers.

Company’s Past Performance

The company was established with a mission of becoming the global leader in technology and innovation, providing superior ability in tandem with maximized cost efficiencies, and indeed the company is working towards attaining this goal. For instance, the company is considered as the world’s fourth largest defense contractor. Furthermore, the Northrop Grumman Corporation was in 2002 considered as the Forbe’s company in that specific year. This means that the company was credited with mastering the skill of innovation.  In addition, the company received the celebrated Ron Brown Award in 2007 for corporate leadership. This ward is meant to recognize companies that have attained outstanding community employee relations. Northrop Grumman has also stood up as a socially responsible company, instituting several projects that are aimed at protecting the environment. One of its latest projects, the Greenhouse Gas Inventory Project aims at minimizing the carbon footprint emitted by the company during its operations.

Looking at the company’s financial performance, it is speculated that the company’s revenues for the 2010 financial year increased compared to the previous financial years. For instance, the total revenue for the financial year 2010 was estimated to be $34.757 billion US dollars, while that of the previous year was $33.755 billion US dollars.  The total revenue for the 2008 financial year was $33.887 billion US dollars. However, the company’s profits have been gradually increasing on annual basis. For the 2010 financial year, Northrop Grumman attained a net income of $2.053 billion dollars, while the net income for the 2009 financial year was estimated at $1.686 billion dollars. The net income for the 2008 financial year was $1.262 billion US dollars. Consequently, the company’s assets have been increasing annually.

This analysis basically considered the company’s previous performance. This can as well be considered as a case study analysis as it incorporated the already established data. For instance, this analysis has taken into consideration the company’s previous performance, in terms of the financial performance to come up with the estimate of its future performance, in order to provide a recommendation of whether or not the Reid Investment Group should acquire it. An analysis if the company’s previous performance has enabled analysts to postulate the company’s future performance.

Recommendation Regarding the Acquisition

According to the analysis provided above, I recommend that Reid Investment Group should go forward and acquire the Northrop Grumman Corporation. This is in reference to various aspects about this company. First, looking at the company’s financial performance, it is considered that the company has been increasing its returns on annual basis.  This therefore, illustrates that company has been gaining an upward growth and therefore the acquisition will be of significant benefit to Reid Investment Group as it will be able to increase its annual returns.  The acquisition will also make the company expand its operations considering the fact that this is an already established global corporation with its operations spread across the globe. In such a way, Reid Investment Group will also be able to increase its brand awareness across the globe.

In addition, Northrop Grumman is one of the global companies that are well known for their unique innovations. In the contemporary business world, innovation is considered as the key driver to business success. It is therefore paramount that all companies striving to attain success incorporate the rat of innovation into their business operations in order to attain success.  Since Northrop Grumman is an innovative company, the acquisition will enable the Reid Investment Group to improve its innovative ability and therefore attain success as well as a competitive advantage in the market. Reid Investment Group should therefore acquire this company in order to expand its operations, attain higher sales and improve its competitive ability in the market.

Conclusion

An analysis of the Northrop Grumman Corporation illustrates that this is one of the successful companies that have incorporated the art of innovation into their operations. Besides, the company’s annual profits have been gradually increasing on an annual basis since from the previous year’s analysis. It is therefore recommended that Reid Investment Group acquires this company in order to boost its annual returns, expand its global operations, considering the fact that this is an already established global company and attain a competitive advantage.

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