PESTLE, Strategic Analysis, and Organizational Strategy of L3 Technologies

This article provides a strategic case analysis of L3 Technologies, including its history, mission, vision, organizational structure, SWOT analysis, and external environmental factors. The article also provides recommendations for the company's growth and success.

Running Head:STRATEGIC CASEANALYSIS 1
PESTLE, STRATEGIC ANALYSIS, AND ORGANIZATIONAL STRATEGY OF L3
TECHNOLOGIES
Institutional Affiliation
Date

STRATEGIC CASEANALYSIS2
History of L3 Technologies
L3 Technologies is an American company formerly known as L3 communications Holdings that
started in 1997.The Company deals with the supplies of communications, command and
controls, surveillance and reconnaissance systems and products, intelligence, ocean products,
training devices and services, avionics, instrumentation, navigation products and
instrumentation.L3 technologies is one of the leading Companies in the provision of a broad
range of electronic and sensor systems used in military, homeland security, communication and
commercial platforms. The company is also the key contractor in security and detection systems,
piloting training and aerospace. Their products are mainly sold to the departments of defense,
U.S. Government intelligence agencies, NASA, aerospace contractors and commercial
telecommunications, Department of Homeland and Security and wireless customers (Stanal,
Lwin& Murphy 2011). L3Company was started by Robert LaPenta and Frank Lanza in the
company of Lehman Brothers.The two founders LaPenta and Lanza had served as executives at
Lockheed and Loral before beginning L3. As a result of forming unions and acquisitions, L3
Company continued to expand and has become one of top ten U.S. government contractors.
Some of the companies it was able to merge and able to acquire included Paramax Systems
Corporation from Lockheed Martin, Training & Simulation Division of Raytheon Systems Co.,
based in Arlington, Texas which was formerly known as Hughes Training, Litton Electron
Devices from Northrop Grumman (renamed L3 Electron Devices) in 2001 and more recently in
2016 MacDonald Humfrey (Automation), a Luton, UK based checkpoint security and
automation company among many others.
Mission
L3 Company mission is “to provide customers with state-of-the-art communications and
telemetry solutions for airborne, Intel, maritime, space and terrestrial applications”.
Vision
“To be the most trusted supplier of high-reliability communications solutions.”
L3 Technologies is a worldwide company supported by over 31,000 employees who enable the
company to continue by distributing its products and providing services. L3 Company recorded

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$9.573 billion in 2017, an increase of $0.363 billion from 2016 in sales making a profit of $863
million. L3’s cash flow was recorded at $862 million in the same year.L3 Company is said to
have poor and inefficient financial planning which leads the company to keep lots of money in
the bank which could otherwise be put in measures likely to open new windows of opportunities.
The salaries entitled to the executives in the company includes $98,078 for Financial Planning
and Analysis Manager and $88,006 - $111,983 range for Financial Planning and Analysis
Manager based on 7 L3 Technologies financial planning and analysis salary for manager
reported (Thomson Reuters. 2018, January 25).
Organizational structure
Here we look at the structure in terms of corporate and management structures. L3 Company is
divided into four subsystems which includes Communication systems that deals with delivering
of products and services for the global communication market, space, ground, specializing in
strategic and tactical airborne, and sea-based communication systems.The other system is
Electronic Systems which provides a wide variety of subsystems, components, systems and
related services for military, products, and commercial customers.Sensor Systems offers varied
services inland, space and cyber domains,airborne and innovative sensor technologies in the
maritime and the fourth system is Electronic Systems that provides various components such as
subsystems, products, systems and related services for commercial and military
customers(Ferreira ET AL., 2015).
The main competitors of L3 Technology are UTC Aerospace Systems, Northrop
Grumman, Lockheed Martin, Harris Corporation and Honeywell.Despite the completion L3
Technologies faces it has managed to thrive in market because of putting their customers’ needs
as their first priority, retaining the potential and key employees and high new ones with the
needed capabilities, capabilities of their facilities, personnel, and equipment, innovative and
effectiveness of technologies, systems and R&D programs (Chen ET AL., 2012, June).
Internal Environmental Factors (SWOT)
Strength: The greatest strength for L3 is the acquisition and merging with other companies
which have greatly helped in acquiring very competitive personnel with talents in science,
engineering, architecture and developers cleared by the U.S. government Securities. There is also

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a high demand for securities across the border where different countries are looking for better
solutions. This is evidenced in 2013 when the Company won a contract worth $ $38.5 millionto
supply SATCOM terminals to Australian Defense Forces with other contracts amounting to $6 to
provide engineering support, program management and other services for Canada’s CC-150
Polaris fleet.This has helped in the expansion of international business which has resulted in
increased market share. L3 takes high considerations in diversity and Inclusion amongst their
employees and is seen as an opportunity(Watson&Strayer2010).
Weakness and threats: There is a gap in products range where consumers do not have a range of
products to choose from which is likely to benefit the competitor in the market (Vogel-Heuser et
al., 2014). L3 communications have poor financial planning as the Company has more cash in
the bank which could otherwise be used to benefit it the more. The other weakness with L3 is a
limited success to explore other business other than the core business segment they have(L3
Technologies 2018, January 25). The company has limited expansion towards adjacent products
segment due to the fact that its organizational structure is only friendly to current business
model(Hakiri et al., 2014). L3 research and development investment is below other fastest
growing competitors in the industry posing a big threat to the future of the company through its
investment is above the industry average on research and development. Last and not least L3
lacks good products demand forecast and this leads to missed opportunities which when rectified
its position in the market can rise against its competitors (L3 Technologies 2018, January 25).
External Environmental Factors
Demographics
The Aerospace division of L3 Technologies is located in Greenville, TX. It is the largest campus
of the four segments with over six thousand employees and is located fifty miles from Dallas
with an approximate population of 26 thousand. This limits the amount of local talent from
which to draw. Therefore, it maintains a diverse group of employees recruiting talent from
similar markets as itself. Much of the talent required is highly specialized, such as aerospace
engineers, aircraft mechanics, and software engineers, therefore, L3 recruits through an internet
presence and career fairs to attract talent. L3 also recruits recent college graduates and intern
partnerships through their co-op program to attract promising new talent. More senior recruits

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transition from other companies such as Raytheon, Lockheed Martin, Bell Helicopter, and
Boeing to help in the design and retrofitting of aircraft and its systems.
Currently, L3 focuses more of its business in the domestic markets than internationally. On
January 4th, 2018, L3 announced the creation of three international boards to drive growth in key
market areas (Business Wire). L3’s press release through Business Wire identified L3
Technologies Australia Group Ply Ltd. headed by Alan Titheridge as the Managing Director. He
will be leading work efforts with the Australian Defense Force (ADF) delivering advanced
technologies across their air, land, and sea platforms. He will also be responsible to build upon
the supplier base as well as the in-country workforce.Richard Foster will lead L3 Technologies
Canada Group Inc. Their goal is to increase the customer base with the broad product line L3
offers including maintenance, repair and overhaul of support equipment and EO/IR solutions that
will meet the Royal Canadian Air Force’s needs. L3 Technologies UK Group Ltd. is managed
by Ronald Cook and will be expanding L3’s Intelligence, Surveillance, and Reconnaissance
systems, simulation training for both military and civilian pilots. This expansion into
international markets will help solidify L3 as a global leader in key components of national
defense.
Political Factors
L3 is subject to many political factors involving governments both national and international.
With the majority of L3’s business practices involving U.S. departments, mainly the Department
of Defense. There is stable cash flow within the company which provides with good investment
opportunities in adjacent products segments. The company has so much cash in the bank which
can enable it to open new windows of opportunity in the world and local markets (Obay2014).
Situation or Strategic Analysis
The L3 Technologies decides to shift its business dependence on the U.S. Department of defense
and focus on international sales which have already increased to 35% to de the decline in the
DoD that happened in 2011 during the recess which affected its budget greatly(Lovewine 2014).
The company is determined to continue to embrace its strategic plan of merger and acquisition
activities which contribute significantly to international sales growth(Terpstra&Malas2017). L3
in dealing with the external environmental factors decides to introduce more products for export

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to countries like Canada, Australia, United Arabs Emirates, Saudi Arabia, united kingdom, and
South Korea in their efforts to counter the loses it made due to overreliance on relying on
department on defense. The company also target to introduce non-core products lines as a
business venture to reduce risks associated with the dealing of core- business only (Chung et al.,
2009)
There are international activities focusing to bring the needed growth in provision of cargo
security equipment and airport, heads of states and VIPS aircraft new modification, foreign
military sales Sikorsky S-92 contractor logistics support in Kuwait, and C-130 Argentina’s
aircraft upgrade(Pryor et al., 2011).L3 has been able to merge and acquire new opportunities of
growth which is significantly increasing the international sales. The company has already
expanded international sales that seeing a growth of 35% offsetting the decline in the DoD areas
of 2011(Lovewine2014).However, the company has not yet has not introduced non-core business
products lines to reduce the risks associated with the one product line. The company also has not
been able to come up with a better financial planning that will help in funding the opening of
new windows of opportunity
organizational strategy
The Company expects to carry on with its execution of programs to increase commercial and
international business in an attempt to compensate the failure of the department of defense
business through focusing on creating value for shareholders. This will be a reality through
dividends strategy and disciplined allocation of capital (Business Wire 2018, January 04).
There is a plan to invest close to $20million in research and development programs intended to
drive innovation. Investing in the new technologies supporting DOD requirement and priority
areas is the other strategic plan by the L3 technologies(Lovewine2014).
The teamwork encouraged the L3 leaders are a testimony to indicate leaders of L3 has
contributed to the growth of the company. There is no company which can increase its’
innovativeness and maintains itself for years without good and qualified managers. There is
evidence that shows appreciation of diversity and inclusion in L3 Company initiated by the L3
leadership(Kivimaa2014).

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The actionable plan has been hindered in L3 Company by the lack of research and development
projects, lack of employees’ inclusivity and also the fear of the government policies. Increased
sales may also deter the actionable plan implementation where people focus more on what they
have achieved forgetting the future disadvantages their actions may bring in the
business(Thouti&Sathe2012).Lack of products demands also makes people in the company lack
morale in the innovativeness as the product may be feared not to have the consumers. The factors
that contribute towards the success of L3 Company has been high innovativeness, close attention
paid to the customer needs, consumer behavior favoring purchases as well as maintenance of key
employees and hiring new competitive employees. Merging and acquisition of other companies
have been of great success to this company because of a new brand of talented employees that
come from these mergers. The company has gained employees very competitive in the field of
science, engineering, architects and development(Terpstra&Malas2017).
The company encourages self-evaluation of employees through bonuses earned by employees
annually depending on their performances. The evaluation of the Company’s’ financial
performance is done before focusing on the performance context of the peer group prior year
performance compared to its business plan (Kani&Yoshimo2009, September). This is how self-
assessment is done to improve the operation. The same is done to Chairman, President and Chief
Executive Officer, the significant accomplishments and overall leadership of the executive, as
assessed by the Chairman, President and Chief Executive Officer to the Committee by the
committee.
Recommendations
 The company should be more focused on expanding its sales to the international market
to avoid risks related to overdependence on U.S. department of defense as their major
product consumer.
 The company should increase its budget on research and projects developments program
far above the industry requirement to reduce competitor advantage in the market.
 L3 should be more focused on ensuring that the products are affordable so as to expand
the consumer base and in turn, this would give them a big market share

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 The L3 company should continue striving to provide the most competitive products to the
market to maintain their customer loyalty and lure more potential customers in buying
their products
 The company should continue to embrace its strategic plan of merger and acquisition
activities which contribute to international sales growth.
 The company should continue to target introducing a few or even more non-core business
product line as a new business venture to reduce its competition.
 L3 should continue its international activities of focusing to bring the needed growth in
the provision of cargo security equipment and airport, VIP, and heads of state aircrafts
modifications, foreign military sales, Sikorsky S-92 contractor logistic support in Kuwait,
and C-130 Argentina’s aircraft upgrade
 The company should come up with proper and efficient financial plan to fund its new
windows of opportunities.
 The company should also maintain its high products portfolio which can enable it to
expand into new product categories.

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Appendix
The structural management of L3 Technologies
Executive management structure
Chairman of the Board of Directors
Senior Vice President of Washington Operations
Chief Executive Officer and President
Senior Vice President and Chief Financial Officer
Senior Vice President, General Counsel and
Corporate Secretary
Senior Vice President of Program
Development
Senior Vice President, Corporate
Strategy and Technology

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Fig.1 Representation of management structure