PAS 2011: Boeing eyes international and adjacent markets for growth

Speaking shortly before the opening of the Paris Air Show, the head of Boeing Defense, Space and Security (BDS), Dennis Muilenburg, said that although the current defence environment was a challenging one it was one that the company had been anticipating for some time and in which it had been positioning itself for continued success.

‘We believe we have a strategy that is the right strategy for this environment,’ Muilenburg stated. The company anticipates a relatively flat defence budget in the US and declining budgets in Europe. These are currently two of the biggest markets for Boeing’s defence business. ‘We’ve got a strong core business and we are going to continue to drive execution and investment in that business,’ Muilenburg observed.

However, there is no doubt that Boeing will now need to look further afield for continued revenue growth. Five years ago international revenues only made up 7% of the total and were mainly confined to Europe. ‘We see some growth in budgets in the Middle East and the Asia-Pacific region. Having just returned from the Shangri-La Dialogue in Singapore there is a lot of defence opportunities and needs in that part of the world,’ Muilenburg insisted. International revenues have increased to 17% for BDS last year and the company hopes to leverage these further until they make up at least 25% of the business.

Looking at the growth business areas for BDS, the company sees the opportunity to grow certain areas of the business as well as move in to adjacent markets. ‘We see opportunities to grow in some adjacent markets such as cyber security, unmanned systems, and our logistics and services work,’ Muilenburg suggested.

Acknowledging that those markets are already maturing and have a number of well-established incumbents, Muilenburg told Shephard that he believed there was still room for BDS to take a good market share in these sectors. He added that Boeing already has expertise in these areas.

The company has a number of high profile UAS developments, including the Phantom Ray and the Phantom Eye, that Muilenburg said will position it for future growth. He also alluded to the company’s expertise in cyber security. Boeing has one of the largest online supplier networks in the world, which Muilenburg said was under constant cyber attack. ‘We can leverage the expertise we’ve developed in securing that network,’ he concluded.