An Analysis of the Competitive Strategy in the Industry Providing a Defense System of Systems

The change from platform to network centric warfare requires new perspectives of the Defense Industrial Base. Both the 1996 Defense Science Board Report on Vertical Integration and DoD's 1999 report on Price Based Acquisition recommend that DoD take steps to further understanding of competitive conditions in the defense industry. This thesis explores one method for gaining this insight The industry is producing the system of systems for DoD, not just platforms. This thesis studies prime contractors for 78 programs which have been determined as the foundation for the future system of systems. By applying the Value-Net business model, it reviews the influences the Department of Defense, International Governments and industries, commercial firms, and suppliers have upon the prime contractors. This analysis identifies growth markers in interoperability development and open system component development. It also identifies competition-induced constraints on weapon system production markets. Through a survey of Defense Contract Management Agency Prime Integrators, it determines the concentration of prime contractor performance in the 78 programs. Based on data from 61 of the 92 prime contracts, it also reveals performance trends , indicating that key players in the industry have established strategies for network centric development This thesis also shows that using the Value-Net business model is a valid method for understanding competitive influences in the industry for network centric warfare