- Teaching Notes
The management team of Lockheed Martin, a U.S. defense company, was perplexed. The company had been successfully operating in the Kingdom of Saudi Arabia (KSA) since 1965. But, in 2016, new defense policies were introduced in the KSA that regulated the terms of foreign military sales. These policies aimed to reduce the economy’s dependence on oil by localizing defense manufacturing to diversify the KSA economy. International pursuits offered greater margins and the leadership board was concerned that it might lose crucial business with the KSA if Lockheed Martin did not change its business strategy. What could be done to strengthen Lockheed Martin’s relationship with the KSA while still abiding by the policies of the KSA government?