Opportunities and Challenges of Defense Market Entry

Entering defense-related markets can be enticing and beneficial for product companies, especially for those that originated in commercial markets. Realizing an overall lift from defense market entry, however, is largely dependent on how well an organization is able to manage and adhere to the market’s particular regulatory requirements and address the ancillary operational challenges that arise.

Challenges

Divided Attention

Balancing regulated and commercial product development concurrently can divide attention and divert resources.

New Concerns

ITAR and EAR compliance commands new and incremental attention to many product development elements (policies, processes, systems, data classification, and people).

Fluctuating Requirements

Defense customers and prime contractors may demand or modify their own compliance measures at any time as part of flow-down requirements.

Opportunities

Reduced Risk

Diversifying beyond traditional commercial offerings can reduce market risk and support growth objectives.

Higher Value Customers

ITAR/EAR-registered companies see potential for larger volume sales to single customers with longer product life and service revenue.

Expanded Market Opportunities

Promoting ITAR/EAR registration and export-controls adherence can make it easier to gain contracts with allied foreign agencies.