subject: The South Korean Defense Sector - Market Opportunities And Entry Strategies, Analyses And Forecasts [print this page] Summary Summary
This report offers insights into the market opportunities and entry strategies adopted by foreign OEMs
(original equipment manufacturers) to gain a market share in the South Korean defense industry. In
particular, it offers in-depth analysis of the following:
Market opportunity and attractiveness: detailed analysis of the current industry size and
growth expectations during 20102015, including highlights of the key growth stimulators. It also
benchmarks the industry against key global markets and provides detailed understanding of
emerging opportunities in specific areas.
Procurement dynamics: trend analysis of imports and exports, together with its implications and impact on the South Korean defense industry.
Industry structure: five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing players have entered the market, including key contracts, alliances, and strategic initiatives.
Competitive landscape and strategic insights: analysis of competitive landscape of the defense industry in South Korea. It provides an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and
availability, labor force, demographics, and political and social risk.
Scope
analysis of Defense industry market size from 2004 through 2009 and forecasts till 2015
analysis of defense budget allocation
Benchmarking with key global markets
Market opportunities
Defense procurement dynamics
Industry dynamics
Market entry strategy
Competitive landscape and strategic insights
Business environment and country risk
Reasons To Buy
Gain insight into South Korean defense industry with current, historic and forecast market values
Get insight on market opportunity and attractiveness
Get insight on industry procurement dynamics
Gain insight on industry structure
Gain insight into the regulations governing the South Korean defense industry and the potential market entry strategies with an expert analysis of the competitive structure
Identify top companies of the South Korean defense industry along with profiles of all those companies
Key Highlights
The South Korean defense industry is expected to grow at a CAGR of 7.39% over the forecast period, from an estimated US$22.4 billion in 2009 to an expected US$32.5 billion in 2015. The perceived threat of nuclear attacks from neighbor North Korea will drive growth in defense expenditure, despite South Koreas military superiority. The South Korean defense industry is also set to benefit from economic growth, a military modernization plan, and a planned reduction in defense personnel. During the review period, the country maintained a defense expenditure of 2.5% of its gross domestic product (GDP), which is expected to continue during the forecast period. During the review period, 69% of the defense budget was allocated for revenue expenditure, while the remaining 31% was assigned to capital expenditure. However, as the government plans to reduce the size of its forces, capital expenditure is expected to receive an increased allocation during the forecast period.
The key opportunities in the industry are expected in areas such as armored vehicles, joint direct attack munitions (JDAMs), fighter planes and VIP aircrafts, multi-mission helicopters, anti-mine equipment, warships, tanks, rocket launchers, and military trucks. Furthermore, although the country has not yet experienced any terror activity from external terrorist organizations (excluding those from North Korea), the globalization of terrorism and increased threat from organizations such as Al-Qaeda and several indigenous terrorist groups will support the expansion of the homeland security market. The three main areas of growth are expected to be in aviation security, cyber security and the aerial surveillance market
1.5 About ICD Research Defense Intelligence Center
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size and Forecast
3.1.1 South Korean annual defense expenditure to reach US$32.5 billion by 2015
3.1.2 Nuclear threat from North Korea, reduction in personnel, acquisition of new technology, economic growth, and reduction in reliance on imports set to drive growth of defense expenditure
3.1.3 Defense expenditure as a percentage of GDP expected to remain at current levels in the forecast period
3.2 Analysis of Defense Budget Allocation
3.2.1 Capital expenditure allocation to increase during the forecast period
3.2.2 Funding for research and development set to increase
3.2.3 Air force expenditure is likely to continue to dominate capital expenditure budget
3.2.4 Capital expenditure allocation for army to grow at a CAGR of 11.04% during the forecast period
3.2.5 Capital expenditure allocation for navy to grow at a CAGR of 10.37% during the forecast period
3.2.6 Capital expenditure allocation for surveillance and communication to grow at the fastest rate
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security market expected to grow steadily during the forecast period
3.3.2 The majority of terror threats come from North Korea
3.3.3 South Korea experienced minimal terror activity during the review period
3.4 Benchmarking with Key Global Markets
3.4.1 South Korea has one of the largest defense industries in the world
3.4.2 The US and China dominate the global defense industry
3.4.3 South Korea allocates significant percentage of GDP towards defense
3.4.4 South Korea ranked third among top arms importing countries during the review period
3.4.5 South Korea ranked seventeenth among top arms exporting countries during the review period
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Demand for armored vehicles expected to grow
3.5.2 JDAMs expected to provide attractive market opportunities
3.5.3 Plans to procure fighter and VIP aircraft expected to boost interest among suppliers
3.5.4 Demand for multi-mission helicopters and anti-mine equipment expected to increase
3.5.5 Naval modernization plan expected to create demand for war ships
3.5.6 Procurement plan will drive demand for ground force equipment such as tanks, rocket launchers and trucks
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Defense imports expected to grow considerably in the next five years
4.1.2 US share of arms sales witnesses decline
4.1.3 Aircraft constitute majority of South Korean arms imports
4.2 Export Market Dynamics
4.2.1 Defense exports grew considerably during the review period
4.2.2 Indonesia and Turkey are the largest importers of South Korean arms
4.2.3 Ships and artillery account for majority of exports
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low
5.1.2 Bargaining power of buyer: high
5.1.3 Barrier to entry: medium
5.1.4 Intensity of rivalry: medium
5.1.5 Threat of substitution: high
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 Offset policy aids development of domestic defense industry
6.1.2 Foreign direct investment in defense sector to become less complicated
6.2 Market Entry Route
6.2.1 Technology transfer provides good market entry opportunities
6.2.2 Research and development collaborations offer market access
6.2.3 Joint ventures and licensing agreements open new market entry strategy choices
6.3 Key Challenges
6.3.1 Intense emphasis on technology transfer
6.3.2 Industrial disputes and rigidity of labor market deter investment
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.2 Key Public Sector Companies
7.2.1 Korea Aerospace Industries: overview
7.2.2 Korea Aerospace Industries: products and services
7.2.3 Korea Aerospace Industries: recent announcements and strategic initiatives
7.2.4 Korea Aerospace Industries: alliances
7.2.5 Korea Aerospace Industries: recent contract wins
7.2.6 Korea Aerospace Industries: financial analysis
7.2.7 Samsung Techwin: overview
7.2.8 Samsung Techwin: products and services
7.2.9 Samsung Techwin: recent announcements and strategic initiatives
7.2.10 Samsung Techwin: alliances
7.2.11 Samsung Techwin: recent contract wins
7.2.12 Samsung Techwin: financial analysis
7.2.13 Hanwha Corporation: overview
7.2.14 Hanwha Corporation: products and services
7.2.15 Hanwha Corporation: recent announcements and strategic initiatives
7.2.16 Hanwha Corporation: alliances
7.2.17 Hanwha Corporation: recent contract wins
7.2.18 Hanwha Corporation: financial analysis
7.2.19 Hyundai Heavy Industries: overview
7.2.20 Hyundai Heavy Industries: products and services
7.2.21 Hyundai Heavy Industries: recent announcements and strategic initiatives
7.2.22 Hyundai Heavy Industries: alliances
7.2.23 Hyundai Heavy Industries: recent contract wins
7.2.24 Hyundai Heavy Industries: financial analysis
