In 2014, leading aircraft maker Airbus Group consolidated its defence and space businesses into one new division called Airbus Defence and Space. This new division made its debut as Europe's number one defence and space enterprise and one of the top ten global defence enterprises. Organized into four business lines – focused on military aircraft; space systems; communications, intelligence and security; and electronics – Airbus Defence and Space employs 38,000 people worldwide and generates revenue of approximately €13 billion per year.
Airbus Defence and Space is committed to expanding its leadership position in defence and space markets by driving innovation, globalisation, services, and value-chain optimisation – all of which improve efficiency, profitability and performance. To meet those goals, company decision makers need a clear understanding of complex and rapidly evolving markets around the world, now and into the future. As a result, Airbus Defence and Space created a dedicated Global Market Forecasting Team as part of its Marketing organisation. The new team was tasked with producing the division's first Defence and Space Global Market Forecast (GMF) document in order to provide a consistent baseline view of the market for all of the company's business areas and all of their internal stakeholders, including strategy and sales.
"Like many defence companies, we are assessing new markets for international development," said David Watts, Head of Global Market Forecasting. "The Global Market Forecast report is an important step in reaching a joint understanding of the global market and supporting international market development to refocus resources to areas with the potential for more business."
Ensuring Confidence in Data Quality
When the team set out to create the first GMF report, it faced a number of challenges. Airbus Defence and Space's portfolio serves multiple regions around the world with diverse cultures, requiring the team to drill down into the markets of many different countries. The team also worked with the company's many stakeholders to achieve consensus on assumptions and definitions in the report. Perhaps the greatest challenge was getting internal buy-in on data quality.
The team turned to a wide range of information and expertise for forecasting the global aerospace and defence markets, particularly from IHS Markit. Resources such as the Balance of Trade report, Jane's Defence Budgets, Jane's Defence Sector Budgets and Jane's Markets Forecast from Jane's by IHS Markit bring expert analysis with extensive military, defence industry, and market knowledge. Through its own internal due diligence and a close working relationship with IHS Markit, the team gained confidence in the data.
"IHS Markit is one of the primary sources of data, making up 80 percent of the market data within our report and is a must-have to do the job – especially when it comes to international forecasting," Watts said. "The IHS Markit support team and analysts have worked with us in a highly co-operative two-way relationship that has helped improve the forecast and remove uncertainties. It was a key success factor."
The feedback we've received is that the Global Market Forecast has helped people identify opportunities and better understand the global market. IHS Markit market data was essential and we could not have delivered the Airbus Defence & Space GMF without it. It's not a 'nice to have,' it is business essential information.
Sharpening Focus on Relevant Markets
Airbus Defence and Space released the first GMF document in early 2015 following a year of research, analysis, and consultation. The report combines both regional and sector perspectives using top-down budget and bottom-up program data primarily from IHS Markit and cross-checked against other internal and external data sources.
Using its own scoring methodology, the team zeroed in on certain countries for prioritisation based on three criteria: their attractiveness, accessibility for Airbus, and the size of the relevant opportunity markets. The team filtered IHS Markit data using tailored formulas to identify the global market by Airbus regions and business lines, and produced a variety of global maps. They also filtered detailed lists of opportunities in the priority countries for their addressability, which supported international market development planning and further research and analysis.
With continuous refinement of its formulas and macros, the GMF Team gained a high degree of confidence that the large datasets could be sorted rapidly to create relevant market views by region and business line. The team also created and shared interactive market dashboards that allow users across the organisation to focus in on key markets very quickly, on their own.
Enhancing Market Development
The Global Market Forecast document is proving effective as a way to provide a baseline view of the market that helps decision-makers prioritise countries and plan international market development. The report has been credited with significantly contributing to the work of planners who narrowed the division's global market focus down to a set of prioritized markets.
In addition to the annual report, the GMF team creates monthly updates. The formulas and macros that the team developed now enable them to produce those frequent updates and specific product-based analysis in an automated way and within just one day.
The GMF Team has received positive feedback from stakeholders throughout the company, recognising its highly responsive and consistent market forecast. Senior management has such confidence in the data and the analysis that they have quoted research from the GMF in numerous press briefings. The findings have also highlighted new potential opportunities that had not been included in operational planning. And Airbus shares selected information with investors to demonstrate the company's broad, deep understanding of the market.
"The feedback we've received is that the Global Market Forecast has helped staff identify new opportunities and better understand the global market," Watts said. "IHS Markit market data is essential and we could not have delivered the Airbus GMF data without it. It's not nice to have information, but rather it is 'business essential' information."
Christian Scherer, Executive Vice President for Marketing and Sales at Airbus Defence and Space, publicly praised the team's first annual report saying, "The GMF gives us a better understanding of the likely future environment, and is being used to focus our resources, particularly in our international market development efforts."