COM DEV has established an objective of growing faster than the overall space market, which tends to expand at a rate similar to global GDP growth. In order to achieve this goal we must continually advance beyond our present boundaries and increase our share of total industry spending. We intend to grow in several ways:
- Expand our share of our core markets
In our traditional areas of focus – commercial switches, filters and multiplexers – we have a higher share of the market than all of our competitors combined. We plan to continue to grow by increasing the value we provide to our customers, and by improving the share of work we are awarded from certain prime contractors. We also work to maintain the production capacity to address the growing global demand for communications satellites.
- Diversify into new market segments
In recent years, COM DEV has leveraged its space engineering expertise to successfully expand into the civil and defense sectors of the market. Today those sectors have grown to represent half of the Company’s total revenues. Our expansion into the U.S. market promises to open up new opportunities for us among civil and military programs.
- Build a domestic U.S. presence
The U.S. Government spends more on space missions than the rest of the world combined. COM DEV made a commitment to participating in that market by purchasing a production facility in California in 2007, and by acquiring an established passive microwave devices business in 2008. Our current focus is on completing the steps required to make COM DEV USA the clear leader in passive microwave equipment for U.S. Government missions.
- Move up the value chain
Our traditional strength has been the design and manufacturing of spacecraft components and subsystems. Our growth strategy includes applying our space engineering expertise to move upstream over time by developing capabilities to provide payloads, spacecraft, and potentially missions and services, while still respecting the domain of our existing customers.
- Develop new products
COM DEV is committed to the development, design and production of new technologies that can be effectively delivered via space-based platforms. We strive to identify niche opportunities driven by the needs of our customers where we have the potential to become a world leader.
Core Strategic Principles
Seven strategic principles define how COM DEV can create a more valuable Company for our customers, and ultimately for our shareholders. Starting from our existing competitive advantages, these core principles guide us in charting the best possible course for long term, profitable growth.
- High reliability market focus
- Diversified base
- Niche leadership
- Adjacent growth
- Customer driven
- Financial discipline
- Business excellence
High reliability market focus
“High Rel” markets are those for which product technical performance and long term reliability are critically important, and customers are willing to pay a premium to suppliers with heritage in the field. COM DEV’s capabilities and internal processes have been deliberately established to meet demanding High Rel requirements. In contrast, the manufacture of lower cost products calls for a different set of organizational skills. The space market will continue to dominate COM DEV’s business. Over time we will explore targeted opportunities to apply our skills to other High Rel markets like defense and avionics.
COM DEV’s origins as a Canadian supplier of commercial satellite payload equipment left us susceptible to swings in currency rates and the cyclicality of the commercial market. As we grow the Company we seek to continue to diversify it in three different ways:
- Market diversification into the civil and military space segments and other “High Rel” markets
- Product diversification to add additional capabilities to our business
- Regional diversification to further grow our European operations and to establish operations in the U.S.A. and Asia
In the mature space industry, being the best in the world in specific areas is a prerequisite for market share growth. COM DEV demonstrated this by becoming the dominant supplier of its core communications satellite payload equipment. We continue to identify niches where we have the potential to become the world leader. Our internal business units are focused around building a leadership position in a particular defined market niche. Each business unit is given considerable freedom to optimize its capabilities, competences, processes, technology and external partnerships in order to achieve niche leadership.
Our ambitious growth plans are accompanied by an objective of effectively limiting the risk involved. For this reason we require any growth initiatives to be “one step adjacent” to our existing business, meaning the initial market entry strategy should involve one of the following:
- supplying an existing product or technology to a new customer
- providing a new product to an existing customer
- leveraging an existing capability into a new market
Potential applications of technology in space are limited only by human imagination. Before investing several years and millions of dollars in developing a new product, however, we need to be satisfied that it’s more than just a good idea. COM DEV works hard to understand what our customers actually want, and what they would be willing to buy from us. Evidence of customer interest is a precondition for any development project to proceed. More broadly, we aim to be customer driven across our entire organization. Our goal is to establish strong and close relationships with our key customers “from top to bottom” in order to understand them better than our competition does.
In order to maximize profitability for our shareholders it is necessary to establish stringent financial criteria for major decisions. All investments proposed by our business units undergo a thorough financial review process to identify the intended goals and return on investment – and then we monitor the results. The purpose of this process is not to deter us from taking appropriate risks. Rather, it is to ensure that we remain focused on outcomes and to provide us with the visibility and tools to make effective investment priority and capital acquisition decisions.
A typical project for COM DEV involves dozens of people, thousands of hours of complex work, strict deadlines, and catastrophic consequences of anything less than a perfect result. In this environment it is essential for our organization to function as efficiently as the spacecraft we work on. We have established a reputation as an industry leader in the implementation of Lean methodology, with significant performance gains as a result. We will continue to seek innovations both in our products and in our production and operational methodologies.