The challenges of entering defence markets

The defence sector is a potentially lucrative market that many companies see as an ideal place to offer their products. While this is true there are some things to consider when looking at how you intend to approach the defence industry in both your local market and internationally.

• Highly regulated: The defence industry is subject to strict regulations imposed by governments to ensure national security and control the export of sensitive technologies. Complying with these regulations, obtaining necessary licenses, and meeting security clearance requirements can take time. While many countries share standards, such as those in NATO or ANZUS, there could be the need to work with several different standards globally.
• Barriers to entry: The defence market often demands significant upfront investments and specialised capabilities. Establishing the necessary infrastructure, acquiring the right equipment, and obtaining certifications can take time, planning and resources.
• Extended sales cycles: The procurement processes in the defence sector are typically lengthy and involve multiple stages, evaluations, and approvals. It can take time to navigate the procurement cycle, requiring patience and making a long-term commitment to establishing your business in the marketplace.
• Complex Procurement Procedures: Governments, defence agencies, and international alliances often have specific procurement procedures and requirements, including documentation, bid processes, and technical specifications. Understanding and adhering to these procedures can be challenging, especially for organisations new to the defence market.
• Security and Intellectual Property: Defence by its very nature deals with sensitive information and technology. Protecting classified or proprietary information and complying with strict security protocols may require the implementation of robust security measures. This may include the disclosure of parts of your IP normally beyond what would normally be expected.
• Local Content Requirements: Some countries impose local content requirements, which mandate a certain percentage of the defence contracts to be fulfilled by domestic companies. This may necessitate establishing local partnerships or joint ventures to allow international organisations to enter the local market.
• Political considerations: The defence market is often influenced by political factors, including changes in policy, budget allocations, and geopolitical considerations. Shifting priorities or changes in government can impact the stability and predictability of the market.
• Export controls and international trade compliance: If you are aiming to enter the international defence market, you must navigate export control regulations and comply with international trade laws. These regulations often govern the export of defence-related technologies, services, and dual-use items.
• Specialist expertise: The defence sector requires specialised knowledge and expertise. Understanding defence requirements, military specifications, and technological advancements is crucial to develop competitive offerings and meet the unique demands of defence customers. You may need to consider supplementing your own business experience with defence sector experts.

Navigating these challenges requires a comprehensive understanding of the defence market, building relationships with key stakeholders, investing in research and development, and demonstrating a value proposition, reliability, and compliance. Working with experienced partners familiar with the defence sector can also provide valuable insights and support in overcoming these hurdles. Terra Sales Solutions flexible and dynamic approach allows you to deliver a global sales team with extensive defence sector experience to where you need it most. Terra represents you in your target markets as an extension of your team, integrating into your business and supporting your brand at trade shows, events and to your key clients. We are constantly looking at innovative ways to put your products in front of organisations who need them. To learn more about Terra Sales Solutions and how we can work with you to achieve your international expansion goals in any part of the planet, book a conversation, and follow us on LinkedIn for the latest news from Terra Sales Solutions