A SUMMER TRAINING PROJECT REPORT

SPACEX : MULTIPLANETARY FUTURE

Submitted in partial Fulfilment of requirements for the award of

Degree of
BBA

Submitted by:
YASH SHARMA
Registration No.-170901164

Under the Guidance of

DR. BHAWNA CHAHAR

MANIPAL UNIVERSITY JAIPUR

 DECLERATION
I hereby declare that the project entitled “SPACEX: MULTIPLANETARY
FUTURE”

submitted to MANIPAL UNIVERSITY JAIPUR, is a record of an original work

done by me under the guidance of

Dr. Bhawna Chahar,

and this project is submitted in the partial fulfilment of the requirements for the award
of the degree of Bachelors of Business Administration. The results embodied in this
thesis have not been submitted to any other University or Institute for the award of
any degree or diploma.
 ACKNOWLEDGEMENTS

Apart from the efforts of mine, the success of any project depends largely on the
encouragement and guidelines of others. I take this opportunity to express my
gratitude to all those people who have been instrumental in the successful completion
of the project.

I would like to show my greatest appreciation to my teacher Dr. Bhawna Chahar.

Can’t say thank you enough for the tremendous support and help during those crucial
times, I felt motivated and encouraged to do my best every time I meet her.

Without her guidance this project would have not been materialized.
 TABLE OF CONTENTS
S.No. Topic

1. Summary

2. Background

3. Introduction

4. Literature Survey

5. Research Objectives

6. Methodology

7. Marketing Mix

8. Product Mix

9. SWOT

10. Major Findings

11. Conclusion

12. Recommendations

13. References
 SUMMARY
The Space Launch Vehicle (SLV) industry has been around for a long time, but few
companies have managed to enter this industry. SpaceX was founded only 10 years
ago, but it has managed to become a leader in the United States (U.S.) industry and a
dominant player worldwide. The purpose of this thesis research is to discover what it
took for SpaceX to break into this tightly controlled industry. A qualitative analysis
was performed to compare SpaceX to companies that overcame the barriers of entry
for their respective industries. SpaceX, implemented a unique technique to the
industry and found success. SpaceX was also evaluated against guidelines and
principles presented by relevant research. The results of this research showed that
SpaceX, driven by Elon Musk, overcame the barriers of entry primarily through their
large initial investment and implementation of vertical integration. This research
showed SpaceX adhered to the guidelines and avoided misconceptions associated
with implementing vertical integration. Musk, following value innovative principles,
is using the concept of reusability to decrease the cost of an SLV. The results of this
research show that the U.S. Air Force can aid other companies in the future to create a
healthier competition in the SLV industry.

In this project is described all of the above topics in detail including the marketing
mix, that is, the 4P’s of marketing-product,place,price,promotion and the analysis of
strengts, weaknesses, threats, and opportunites of the company. SpaceX is a company
founded by a great entrepreneur Elon Musk with risking his whole life earnings for
the company by investing all of it and making a huge success out of it by changing the
world by providing it with crazy ideas that he implemented and no one else could and
more dreams that he is going to make real like space travel for a common man and
also the biggest mission of the company-colonising Mars and making Human kind a
multiplanetary species.
 BACKGROUND

In 2001, Elon Musk conceptualized Mars Oasis, a project to land a miniature

experimental greenhouse and grow plants on Mars. "This would be the furthest that
life’s ever traveled" in an attempt to regain public interest in space exploration and
increase the budget of NASA. Musk tried to buy cheap rockets from Russia but
returned empty-handed after failing to find rockets for an affordable price. On the
flight home, Musk realized that he could start a company that could build the
affordable rockets he needed. According to early Tesla and SpaceX investor Steve
Jurvetson, Musk calculated that the raw materials for building a rocket actually were
only three percent of the sales price of a rocket at the time. By applying vertical
integration, producing around 85% of launch hardware in-house, and the modular
approach from software engineering, SpaceX could cut launch price by a factor of ten
and still enjoy a 70% gross margin.

In early 2002, Musk was seeking staff for his new space company, soon to be named
SpaceX. Musk approached rocket engineer Tom Mueller (now SpaceX's CTO of
Propulsion) and Mueller agreed to work for Musk, and thus SpaceX was born.
SpaceX was first headquartered in a
warehouse in El Segundo, California.
The company has grown rapidly
since it was founded in 2002, growing from 160 employees in November 2005 to
1,100 in 2010, 3,800 employees and contractors by October 2013, and near 5,000 by
late 2015. As of April 2017, the company had nearly 6,000 employees. In 2016, Musk
gave a speech at the International Astronautical Congress, where he explained that the
US government regulates rocket technology as an "advanced weapon technology",
making it difficult to hire non-Americans.

As of March 2018, SpaceX had over 100 launches on its manifest representing about
$12 billion in contract revenue. The contracts included both commercial and
government (NASA/DOD) customers. Its major competitors in the commercial
comsat launch market being Arianespace, United Launch Alliance, and International
Launch Services. SpaceX is the leading global commercial launch provider measured
by manifested launches.
 INTRODUCTION

Space Exploration Technologies Corporation, doing business as SpaceX, is a

private American aerospace manufacturer and space transportation services company
headquartered in Hawthorne, California. It was founded in 2002 by entrepreneur Elon
Musk with the goal of reducing space transportation costs and enabling the
colonization of Mars. SpaceX has since developed the Falcon launch vehicle family
and the Dragon spacecraft family, which both currently deliver payloads into Earth
orbit.

Musk (b. 1971) is a South African-born entrepreneur with degrees in business and
physics from the University of Pennsylvania—and he’s launching rockets because he
just kind of decided to. Musk has no formal training in rocketry, but he does have an
eye for new markets. He made his initial fortune as a co-founder of PayPal, and has
since founded Tesla Motors and SolarCity—a solar energy company.

SpaceX designs, manufactures and launches advanced rockets and spacecraft. The
company was founded in 2002 to revolutionize space
technology, with the ultimate goal of enabling people to
live on other planets.

SpaceX is headquartered in California, which also serves

as its primary manufacturing plant. The company owns a
test site in Texas and operates three launch sites, with
another under development. SpaceX also operates regional
offices in Redmond, Texas, Virginia, and Washington,
D.C.

The Headquarters located in the Los Angeles suburb of Hawthorne, California is a

large three-story facility, originally built by Northrop Corporation to build Boeing 747
fuselages, now housing SpaceX's office space, mission control, and, as of 2018, all
vehicle manufacturing.
In March 2018, SpaceX indicated that it would manufacture its next-generation, 9 m
(30 ft)-diameter launch vehicle, the BFR, at a
new facility it is building on the Los Angeles
waterfront in the San Pedro area. The company
has leased an 18-acre site near Berth 240 in the
Los Angeles port for 10 years, with multiple
renewals possible, and will use the site for manufacturing, recovery from shipborne
landings, and refurbishment of both the BFR booster and the BFR spaceship.

SpaceX, unlike any other SLV company, implemented a vertical integration strategy
to overcome the industry barriers. As defined by The Economist (2009), “Vertical
integration is the merging together of two businesses that are at different stages of
production.” In the case of SpaceX, this applies to the manufacturing, assembling, and
launching of the SLV. The benefits and disadvantages of vertical integration have
been a controversial topic among researchers for 3 years.
 LITERATURE SURVEY

The purpose of this chapter is to provide background into the Space Launch Vehicle
(SLV) company SpaceX and its major competitors. This will provide an
understanding of the foundation of the industry and how the barriers of entry
developed. This chapter also provides background into relevant research into
innovation, concepts of which can be used to evaluate the actions and mission of
SpaceX. Furthermore, the literature review provides background information about
other industries having high barriers to entry but that were overcome by smaller
companies, such as FedEx and the postal service industry.

Prior to the Commercial Space Launch Act of 1984, only NASA was permitted to
launch satellites into space; commercial companies were forced to have their payloads
launched by NASA. This Act ignited the SLV industry,
because commercial companies could now enter and
create an industry that did not exist. In 1990, a new law
was passed by Congress that forced NASA to use
commercial space launch vehicles when possible. This
law essentially formed a new multibillion-dollar
industry, and there are currently about ten active space launch providers throughout
the world.

SpaceX was founded in 2002 entirely from private funds. The primary goal of SpaceX
is to create technologies to reduce space transportation costs and enable the
colonization of Mars. SpaceX has achieved many firsts in the SLV industry, including
the first privately funded liquid propellant rocket in 2008 and the first privately
funded company to launch, orbit, and return a spacecraft in 2010. Space X was
likewise the first private company to send a spacecraft to the International Space
Station (ISS), accomplishing this feat in 2012. SpaceX is working on a unique
approach to the SLV industry in which they plan to reuse the first stage of their
rockets to reduce expenses.
 RESEARCH OBJECTIVES

SpaceX has managed to break into a very tightly controlled industry with little
experience. This makes SpaceX the ideal candidate to research to determine the way
forward in encouraging competition that will benefit the U.S. Air Force. Therefore, it
is important to verify that SpaceX has broken into this industry and is a viable
competitor. Figure 1 shows data collected and analyzed from Federal Aviation
Administration (FAA) licenses granted over the last six years for space launches
(Federal Aviation Administration, 2016). Since this is based on FAA licenses, it does
not include launches that occurred outside of U.S. airspace. This data shows not only
a significant increase in recent years of SpaceX activity, but it also shows that SpaceX
now has the clear majority of U.S. SLV business. Figure 2 shows worldwide launches
over the last six years, which indicates that SpaceX is gaining market share
worldwide. SpaceX has thus proven to be a company on the rise and a major player in
the U.S. and worldwide SLV industry.
 METHODOLOGY

SpaceX is an entirely privately funded company and for this reason there is little to no
data released about the company’s earnings or financial standing and most of its
design decisions, thus making it difficult to perform statistical analysis. This led to a
more qualitative research approach where SpaceX was compared to other companies
who used similar techniques to succeed. Once a repository of data was collected on
different companies and how they compare to SpaceX, the most important aspects of
SpaceX that have led to its successful entry into the Space Launch Vehicle industry
can be identified.

The main source of the collection of the research data is the internet, the various
posted articles about the company and the CEO and the founder Elon Musk. The first
step of the research includes the basic explanation of the working of the company ,its
background and providing with the foundations. The second step includes the
description of the marketing mix of the organisation as the project is based on the
functions and working of the marketing department of the company. Going on to next
chapter which is a deep SWOT analysis, then describing the product range and ending
with evaluating the competitive environment of the company based on the previous
chapters and summing up the major findings providing with conclusions and some
recommendations for future.
 MARKETING MIX

PRODUCT

SpaceX makes the bulk of its money from engaging in just one activity: launching
satellites into orbit. The company charges commercial customers a standard rate of
$62 million per launch for this service. It charges perhaps $20 million more for more
complicated government space missions such as resupplying the International Space
Station, putting a science satellite into orbit for NOAA, or launching a GPS satellite
for the Air Force.
It charges money to people who want to put things into orbit around the Earth (or
beyond, eventually). SpaceX uses the rockets they build and operate to provide this
service.

PROMOTION

SpaceX’s best marketing is successful launches. Along with a little bit of coverage of
launches as they happen to show the public what they’re capable of. Their promotions
also work by the various tests they perform of their brand new rockets and the media
coverage they get by doing these activities, also Elon Musk is the first person in the
world or it can be said that SpaceX is the first company to send a whole sports car in
space. The car was owned by Elon
musk. Its stereo was programmed to
play David Bowie's Space Oddity on
repeat as it travels for millions of
years through space. Or until the
battery dies, anyway. The release of
their launch videos, the success of
their missions, the coverage done by
the media and the excitement of these unusual missions and experiments on the
internet as well as in the public does their work of their promotion.

PRICE

The cost of each Falcon Heavy launch starts at $90 million and a fully expendable
Falcon Heavy would cost only $150 million. That's about $250 million cheaper than
the closest competition.  The less heavies a slightly smaller Falcon 9 rocket costs $62
million every time its launched. By contrast, the cost of launching rockets from
SpaceX competitor United Launch Alliance will run $422 million per takeoff by
2020, according to one analysis of Air Force documents. The main reason of Elon
Musk’s to form this organisation was to cut the massive costs and give the
government as well as other commercial businesses a launch in much less than other
companies with still earning great profits leading to greater completion in the space
launch vehicles industry.
 PLACE

SpaceX Headquarters is located in the Los Angeles suburb of Hawthorne, California.

The large three-story facility, originally built by Northrop Corporation to build
Boeing 747 fuselages, houses SpaceX's office space, mission control, and, as of 2018,
all vehicle manufacturing. SpaceX uses three leased orbital launch sites: Launch
Complex 39A of the Kennedy Space Center, Space Launch Complex 40 at Cape
Canaveral Air Force Station, both in Florida, and Space Launch Complex 4E of the
Vandenberg Air Force Base in California. Space Launch Complex 40 was damaged in
the Amos-6 accident on September 2016 and repair work was completed by
December 2017. SpaceX is also building a commercial-only launch facility at the
Boca Chica site near Brownsville, Texas and is expected to be operational no earlier
than late 2018. In addition, SpaceX uses a suborbital test facility, the SpaceX Rocket
Development and Test Facility in Texas. A high-altitude suborbital test facility was
under construction in New Mexico, but was abandoned following the switch to flight
tests on commercial missions. SpaceX has indicated that they see a niche for each of
the four orbital facilities currently in use or under construction, and that they have
sufficient launch business to fill each pad, particularly so by the end of the decade if
SpaceX business remains strong.

SWOT ANALYSIS
STRENGTHS

Again, moving from lowest ranking of overall importance to the most important
factors, there are several internal strengths that have allowed SpaceX to thrive in the
new market.

 The first of these factors is the partnerships that the company has created.
SpaceX could not exist without the support of key players within the industry
itself. These relationships have given the firm an edge in breaking into the
market, removing several barriers to entry such as limited capital, facilities,
and missions to run on their own. One such example of the power of
partnering has been the coordination of the company from its emergence with
the Kennedy Space Center of NASA (Engler, 2016). From Kennedy SpaceX,
has utilized launch facilities, landing locations, and NASA control oversight to
complete some of the companies most
prominent missions. Without engaging
with NASA, SpaceX could have never
accomplished the feats that it has thus
far. More so, without strategic
partnership the company would have failed to cover the cost of creating the
assets needed to run their missions. In the future, key partnerships will be an
avenue used for the advancement of the firm in execution and knowledge
base. Drawing upon these resources has allowed the company to accomplish
great things with using their next greatest strength, IP and innovation.
 SpaceX is focused on creating value for the company by challenging the status
quo through compelling innovations and influential intellectual property. To
surpass the giants the likes of NASA, Chinese, or Russian Space agencies has
required the firm to constantly be looking for ways to produce formidable high
tech equipment and create products that translate into value for the firm.
 The products that SpaceX has focused innovation into are launch vehicles,
their own state of the art rocketry, and engines. Not contracting out the
production of these items have allowed SpaceX to differentiate themselves
from new competitors, building a brand of mission accomplishments centered
around the use of their own equipment and development teams. Maintaining
 the IP for such innovations allows SpaceX some bargaining power against
other would be competition, who now must find better complete vehicles or
try and produce at the quality of SpaceX’s technology.
 All this innovation stems from the next strength that the company possess, a
vision unlike any other. From the earliest premonitions of the Space
Exploration Technologies Corporation there was but one driving factor
pushing Elon Musk into business; taking humans to mars. Everything that has
been done by the firm stems from the push to the red planet that has so
enthralled the CEO. It was quickly understood that this goal could not be the
beginning and end for the company,
that there needed to be growth to that
point, and this is still pushing the
organization today. To try and
succeed where others said only failure
would exist has been a constant
endeavor for SpaceX, a firm that seems to relish in doing what others say
cannot be done. It is this vision that has made the company into what it is
today, a formidable force in a market that did not exist fifteen years ago.
 This vision, the drive to go where no others have gone in a way that was not
considered prior has brought SpaceX its greatest asset and competitive
advantage, changing the cost landscape for launch. It is the most important
strength the company offers because of how when utilized, SpaceX has
effectively taken the global launch market over in the last ten years because of
this progress.
 With in-house creation of most components used by the firm, as well as
reusable rockets, SpaceX has been able to effectively steal away launch
contracts all over the world by exploring the concept of cutting costs in an
industry that has long considered extensive costs of missions to be nothing
more than consequence of business.

WEAKNESSES
 Coupled in the internal environment of the firm’s strengths comes the weaknesses
that the company must overcome to continue operations into the future.

 The first of these weaknesses explored for SpaceX is the incredible amount of
capital required to run the business. In the first ten years (2002-2012) SpaceX
operated on around one billion dollars, 300 million dollars of which was
raised from private funding including an estimated 100 million dollars from
CEO Elon Musk himself. The remaining 700 million dollars came from
government subsidization and a 500 million dollar contract with NASA. This
may seem like enough capital to run any business, but in the space vehicles
and launch market this is enough to bet by. The immense costs of spaceflight
and required technologies mean that growth comes at a high price point, and
others have joined to help pay for these rising costs. In January of 2015, the
company created another round of funding and gained support from Google,
and Fidelity at the expense of 8.33% of the ownership of the company. The
complete list of financial supporters now includes these two capital giants, as
well as Draper Fisher Jurvetson, Founders Fund, Valor Equity Partners and
Capricorn. Maintaining these fiscal partnerships is a necessity for the
operation of the firm, which for now remains completely private, avoiding the
pressures of quarterly profits.
 This possible emphasis on profits is the next weakness of the firm, as profits
have ranged from those of a sinking business to one of the largest capital
creators in the country. The massive expense required and massive profits
from successes have made this a tough topic to accurately portrait for the
company, although there are a few things to know for sure. First, through the
analysis done to answer this very question of profitability, the Wall St.
Journal found that SpaceX earned about 0.02% net profit from the estimated
own billion dollars in revenue seen in 2015. This figure remains far below the
posted results of some key competitors such as Boeing Aerospace, and
Lockheed Martin, both with profit margins over 10% (Smith, 2017).
 With a few launch failures, the 2015 fiscal year ended with SpaceX showing
possible losses of about 260 million dollars, although 2016 showed signs of a
small profit margin again. It may be too early to tell for sure but it is known
 that the longevity of the company will require moving margins closer to those
of much larger competition.
 This point brings us to the final weakness of SpaceX, scale. As the firm grows
in the marketplace things will not get easier for the company. Currently the
relatively small scale organization can effectively produce many of their own
materials, chose what projects they want to engage in, and create value
through headlines of technological advancement. As the organization grows
these capabilities will be stretched, budgets tighter, operations less lean, and
competition fiercer. Traversing these obstacles will be much harder when
plants need to be added, more employees hired, and the excitement that
currently surrounds the company has dulled to an echo. To do so will entail
creation of new value and a renewed emphasis on cutting costs without
sacrificing quality or safety. This is no simple task, and one that will test the
resolve of the duration of operations.

OPPORTUNITIES-

Taking advantage of the changes in the market that can increase the position of the
firm is one way that SpaceX can fight against its internal weaknesses.

 The first of these potential opportunities is the aging status of the larger public
space institutions. While new entrants are coming quickly into the market
there are also large government run space organizations that offer potential
rewards to those who can work with or against them. One way that SpaceX
has sought to control its value in the market is by strongly contracting with
NASA. It is recognized that the much younger and leaner organization can be
of great benefit to NASA, and this focus has propelled SpaceX to its status
today. As many innovations have grown from SpaceX they have created great
value in working with government bodies all over the world to achieve
communal goals.
  Leveraging these larger organizations is what SpaceX needs to do to affirm its
position in the market and usefulness for other partners that have seen funding
cuts and industry decline. More external cooperation will be a strong path into
the future for the company taking advantage of the capabilities and knowledge
of other institutions.
 Aside from helping the larger firms with their missions, SpaceX is
incorporated at the emergence of a new market which they can hope to take a
large share of, space tourism. Space tourism planning is already underway for
the company, and using this new demand around the globe may help to
establish a profitable consumer division of the firm. As discussed the market
for launch tourism could explode in the next twenty years, and although there
is competition licking their chops to become a player in the new market, there
may not be any firm better suited than SpaceX. With extensive vehicular and
launch capabilities, there is no doubt that people will be going to the company
to purchase a ticket out of our atmosphere, and if this can be done at a profit
the potential for offerings are endless.
 Finally, the greatest opportunity on the horizon for SpaceX is the growth
potential in their own market. As more and more of the world gains advances
in technology the need for satellite launches will be higher than ever. As more
companies look to establish communication and internet capacity in remote
locations thought unreachable, they will look to the space we have in the
orbital area surrounding our planet. As more governments use drone and
satellite imaging technology there is a mandate never seen for countries to
establish a cosmological presence.

These potentials for the future poise a company like SpaceX to take hold of making
these visions a reality, and this opportunity is greatest of all.

THREATS-

The final portion of the external analysis of SpaceX are the potential threats the
company may face in the years to come. Threats must be understood so that there is a
potential to restructure or reassess capabilities to alter or avoid the possible pitfalls.
 The first threat by least importance to most for the firm is contract
dependability. Over the last ten years SpaceX has been fortunate to be able to
swallow up much of the international market for launches by cutting the
traditional costs of the service, but as others seek to meet this new price range,
contracts will become harder to ensure the security of.
 If there are launch failures this will also take a large toll on the chances of
keeping contracts with larger organizations such as NASA. These contracts
and their dependability are a key to the capital funding of the organization, and
without assurances that these contracts will continue and new ones will be
found, the value of SpaceX decreases dramatically. Making sure to keep the
dealings that have been made with other groups is integral to the continuation
of operations.
 Avoiding failures may be a piece of holding these obligations, and brings us to
the next threat facing SpaceX and any company trying to grow in the industry
of launch or space travel, risk. There is no guarantee within the aerospace
industry that everything will always go right, and in fact sending anything
outside of our atmosphere onboard a rocket is a dramatically dangerous
procedure. The risk associated makes investment a tough topic when things do
go wrong, as they will for anyone trying to launch into space.
In fact, it is so tumultuous and tedious to do so that the adage of rocket
science being the premier of solvable problems is a common statement. The
risk that is incurred in operations is much higher than in almost any business
in the world, yet there are profits to be made and frontiers to discover, which
is why the education of future risk is still a threat ranked so highly for SpaceX.
 The final and greatest threat facing the future of SpaceX is the emergence of
new competitors. So early
in the emergence of the
private market has SpaceX
come, and right now there
are very few major
competitors of similar focus
and scope to the company.
 As the market starts to show more potential for success and profit, new
entrants will come and those already coming will advance their tactics.
 Understanding the increases in the competitive environment that are coming in
the next twenty years is what SpaceX must do to ensure growth. To combat
new entrants the firm will need to leverage its strengths, reduce the impact of
weaknesses, prepare for the utilization of new opportunities, and traverse
possible threats better than the new players in the market. Only in doing this
will SpaceX continue to be able to lengthen our reach into the heavens and
foster knowledge of what is now the unknown.
 PRODUCT MIX

Rocket engines-

Since the founding of SpaceX in 2002, the company has developed three families of
rocket engines — Merlin and the retired Kestrel for launch vehicle propulsion, and the
Draco control thrusters. SpaceX is currently developing two further rocket engines:
SuperDraco and Raptor. SpaceX is currently the world’s most prolific producer of
liquid fuel rocket engines.

1. Merlin is a family of rocket engines developed by SpaceX for use on

its Falcon rocket family. The Merlin engine was originally designed for sea
recovery and reuse.
2. Kestrel is a type of engine was used as the Falcon 1 rocket's second
stage main engine.
3. Draco are used as reaction control system (RCS) thrusters on the
Dragon spacecraft. SuperDraco engines are a much more powerful version of
the Draco thrusters, which will be initially used as landing and launch escape
system engines on the version 2 Dragon spacecraft, Dragon 2.
4. Raptor is a new family of engines to
be used in its future Interplanetary Transport
System. Development versions have been
test fired.

Falcon launch vehicles-

1. Falcon 1 was a small rocket capable of placing several hundred kilograms into
low earth orbit. It functioned as an early test-bed for developing concepts and
components for the larger Falcon 9.Falcon 1 attempted five flights between
2006 and 2009. On September 28, 2008, on its fourth attempt, the Falcon 1
successfully reached orbit, becoming the first privately funded, liquid-fueled
rocket to do so.
 2. Falcon 9 is an EELV-class medium-lift vehicle capable of delivering up to
22,800 kilograms to orbit, and is intended to compete with other launch
providers around the world. The Falcon 9 v1.0 rocket successfully reached
orbit on its first attempt on June 4, 2010.
3. In 2011, SpaceX began development of the Falcon Heavy, a heavy-lift rocket
configured using a cluster of three Falcon 9 first stage cores with a total 27
Merlin 1D engines and propellant crossfeed.[104][105] The Falcon Heavy
successfully flew on its inaugural mission on February 6, 2018 with a payload
consisting of Musk's personal Tesla Roadster into heliocentric orbit[106] The
Falcon Heavy is the world's most powerful rocket in operation.[107] The first
stage would be capable of lifting 63,800 kilograms (140,660 lb) to LEO.

Dragon capsules-

In 2005, SpaceX announced plans to pursue a human-rated commercial space

program through the end of the decade. The Dragon is a conventional blunt-cone
ballistic capsule which is capable of carrying cargo or up to seven astronauts into orbit
and beyond.

The first flight of a Dragon structural test article

took place in June 2010, from Launch Complex 40
at Cape Canaveral Air Force Station during the
maiden flight of the Falcon 9 launch vehicle; the
mock-up Dragon lacked avionics, heat shield, and
other key elements normally required of a fully
operational spacecraft but contained all the
necessary characteristics to validate the flight performance of the launch vehicle. An
operational Dragon spacecraft was launched in December 2010 aboard COTS Demo
Flight 1, the Falcon 9's second flight, and safely returned to Earth after two orbits,
completing all its mission objectives. In 2012, Dragon became the first commercial
spacecraft to deliver cargo to the International Space Station, and has since been
conducting regular resupply services to the ISS.

SpaceX plans to launch its Dragon 2 spacecraft on an uncrewed test flight to the ISS
in November 2018, and in April 2019, a crewed Dragon will send US astronauts to
the ISS for the first time since the retirement of the Space Shuttle.
In February 2017 SpaceX announced that two
would-be space tourists had put down
"significant deposits" for a mission which
would see the two private astronauts fly on
board a Dragon capsule around the moon and
back again.

In addition to SpaceX's privately funded plans for an eventual Mars mission, NASA
Ames Research Center had developed a concept called Red Dragon: a low-cost Mars
mission that would use Falcon Heavy as the launch vehicle and trans-Martian
injection vehicle, and the Dragon capsule to enter the Martian atmosphere. The
objectives of the mission would be return the samples from Mars to Earth at a fraction
of the cost of the NASA own return-sample mission now projected at 6 billion dollars.

Interplanetary Transport System / BFR-

SpaceX is developing a super-heavy lift launch system, the BFR. The BFR is a fully
reusable first stage launch vehicle and spacecraft intended to replace all of the
company's existing hardware by the early 2020s, ground infrastructure for rapid
launch and relaunch, and zero-gravity propellant transfer technology in low Earth
orbit (LEO).

Other projects-

In January 2015, SpaceX CEO Elon Musk announced the development of a new
satellite constellation to provide global broadband internet service. In June 2015 the
company asked the federal government for permission to begin testing for a project
that aims to build a constellation of 4,425 satellites capable of beaming the Internet to
the entire globe, including remote regions which currently do not have Internet access.
The Internet service would use a constellation of 4,425 cross-linked communications
satellites in 1,100 km orbits. Owned and operated by SpaceX, the goal of the business
is to increase profitability and cashflow, to allow SpaceX to build its Mars colony.
Development began in 2015, initial prototype test-flight satellites were launched on
the SpaceX PAZ mission in 2017. Initial operation of the constellation could begin as
early as 2020.
 MAJOR FINDINGS

Competitive Environment (Porter’s Five Forces Model)

1. Threat of New Entrants- Low:

With the current structure of the private market for spaceflight and launch SpaceX
will have very little to worry about new entrants in the immediacy. One reason for
the low threat level of completely new entrants into the market is the immense capital
requirements that any prospective company must have to be able to move into the
market for aerospace. This extends past just the cost of production, and into the
requirements of partnership, extensive and proven record of research and
development, and formulation of differentiating factors from the companies already
established in the market. To avoid another large barrier to entry SpaceX controls
much of its own production and parts used in manufacturing, something that a new
entrant into the market would have to imitate at great cost or find suppliers to
reinforce.

2. Bargaining Power of Suppliers- Low:

SpaceX is unique in the industry as a company that uses its own production to
provide the technology for the business, while others rely heavily on sourcing high
quality products. Learning to create their own equipment even in the simplest forms
like the machining of hardware later used the assemble rockets allows the company to
drastically decrease the power of suppliers of the business. Another facet of the
market that leads to a low supplier power is that aerospace companies have little
threat associated with suppliers integrating forward. Aside from the fact that there are
as few suppliers used as possible, the notion of a firm in the supply chain for
equipment like rocket components integrating forward into a full-scale launch
organization is infeasible at best. These high-tech suppliers also have a disadvantage
in bargaining because of the low number of companies that regularly purchase their
components. These companies are largely dependent on continuous contracts with
few large aerospace organizations, meaning they require commitment to the contracts
available more than they have options for other possible buyers.
3. Bargaining Power of Buyers- Low:

The buyers of SpaceX are concentrated into the purchase of large launch contracts
that can span years into the future and provide much of the current revenue of the
business. These buyers are often large government groups such as NASA, smaller
national space agencies, or other companies who seek to send their products outside
of earth’s atmosphere and choose SpaceX contracts because of the differentiation of
the offer that SpaceX makes. The structure of the business allows for SpaceX to
separate itself from competitors by redefining the traditional launch costs offered by
other firms. The cost of launch by SpaceX is much lower than the traditional market
leader for launch contracts allowing the company to decrease the power of buyers by
reducing the incentives of choosing another firm. This market power leads to the
conclusion of very low buyer power against SpaceX, although the necessity to secure
these contracts does favor the buyers point of view.

4. Threat of Close Substitute Products- Low:

In such an advanced technology market for production and use of orbital launch
vehicles that SpaceX operates in there are very few possible substitutes outside of the
industry. The operation of launching satellites and other equipment outside of our
atmosphere entirely lacks substitutes offing any aspect of price-performance trade off
that still accomplish the services offered by a body similar to SpaceX. This does not
mean that there are no participants of the market analogous to SpaceX, as there are
several that offer services like the company, rather that these competitors are inside of
the industry. This internal natured obstacle is observed apart of regular environmental
scanning by the company.

5. Intensity of Industry Rivalry- Med:

SpaceX has several serious competitors in major markets for space tourism, satellite
launch, and government contracts for space missions that it must fight for launch
contracts. Of these competitors, the most prominent are The United Launch Alliance
(ULA) which has in the last twenty years enjoyed most of the spoils of US launch
contracts, Blue Origin, which has focused recently on space tourism but plans to as
soon as 2020 start launching larger commercial and government payloads, and Virgin
Orbit who specializes in low weight launch capabilities using a high-altitude jet to
launch orbital rocketry (Mosher, 2018). The most similar in size to SpaceX is the
ULA, but the lower cost of production and lesser ticket price per launch weight allows
the company to effectively beat the ULA out in contracts of its choosing. Blue Origin
does not yet possess the capital or high weight launch capabilities of SpaceX and thus
again the SpaceX comes out on top for the time being. Virgin Orbit is a minor
contender for the same reasons as Blue Origin, so the intensity of the rivalry within
the commercial industry is growing but still for the time slight at best.

Overall Competitive Environment: LOW

Investigative Questions Answered-

Q:Why did Elon Musk/SpaceX want to enter the SLV industry? How does this
compare to other leaders and companies who entered tightly controlled industries?

Ans:Musk entered the SLV industry to make his vision a reality. It is important to
understand that Musk is a steward in the industry looking to advance his vision. His
motivation and desire to enter the SLV industry is based on his desire to make
humans multi-planetary. He recognized it was too expensive to do this using the
current SLV technology and services. This drove him to create SpaceX and design
their own SLVs at a fraction of the price of the current offerings. Founders had a
vision and were willing to put everything on the line to make their respective visions
come true. Any visionary who wants to enter a tightly controlled industry can be
motivated by stewardship theory and a goal greater than money at the risk of losing
all their investments.

Q:What are the barriers of entry into the SLV industry? How does this compare to
other tightly controlled industries?

Ans:This research has shown that the cost to enter the SLV industry is a strong barrier
to entry. SpaceX overcame this barrier by having the financial backing of Elon Musk.
The knowledge gap is another barrier of entry into the SLV industry. Elon Musk was
not an aerospace engineer nor had he any experience in the field, but he overcame this
barrier by learning all he could about the technology and surrounding himself with
experts in the field. The SLV industry was part of a very tightly controlled market in
which all of the successful companies were part of the industry for many years and
had not faced any real competition. SpaceX overcame this barrier by offering a
significantly lower priced option to customers. Regulations were the last major barrier
SpaceX had to face. The SLV industry involves very high priced products that can be
used as weapons of mass destruction, which necessitates a great amount of regulation.
While it was a slow process, SpaceX overcame this barrier with the help of
government organizations put in place to ease the application process and by gaining
a lot of knowledge from other experts who dealt with the regulations as part of other
companies.

Q:What key innovative techniques did SpaceX implement?

Ans:It is nearly impossible to list every innovation SpaceX employed on its road to
breaking into the SLV industry, but most of their innovations have come by
implementing vertical integration and working towards a fully RLV. SpaceX took
clues from other industries such as automobile manufacturing to implement a vertical
integration business model. Using vertical integration, SpaceX has not only
simplified almost all aspects of the industry but they have also significantly reduced
the cost of launching a payload to space. In addition to vertical integration, SpaceX is
putting significant research and development towards the utilization of RLVs. They
have made many innovative strides in this goal to make SLVs even less expensive.
SpaceX has not achieved a fully RLV yet, but they have proven their concept in the
first stage and continue their efforts to reduce the overall cost of SLVs.

Q:How do SpaceX leaders value innovation versus other industries?

Ans:Musk and SpaceX have shown a desire to be a value innovative company and not
fall into the typical competitive nature most companies exhibit. SpaceX is offering
superior value to its customers in the form of cost and convenience. Additionally, its
cost is lower than the competition and attracts more customers to seek the services of
SLVs. SpaceX has also managed to avoid the three red flags that companies driven
by competition exhibit. They do not simply imitate the other industry leaders nor
react to their competitive moves. The last concept in Kim and Mauborgne’s (1999)
research of innovative companies expressed that all of their innovative subjects had
two common components to their market approach. SpaceX’s market approach has
been to strategically price their products to create new demand and in doing this they
have targeted the cost structure of the industry. In addition to following that model of
value innovation, the leaders at SpaceX have shown their ability to balance the three
types of micro culture. SpaceX has created an overall culture that embraces
experimenting while still staying schedule oriented and following the rules set for the
industry. SpaceX is not only an innovative company by nature of their products, but
the leadership puts a high value on that innovative aspect.
 CONCLUSIONS

 Elon Musk created SpaceX to make his vision of humans becoming a multi-
planetary species a reality. The vision and motivation of the founder is the first
and most important factor to keeping a company on track when it faces tough
decisions. Musk has become a steward in the industry and is willing to put his
personal gain aside to keep SpaceX motivated and on track for its mission. It
is his vision that has made SpaceX so successful and ensured their rise in the
SLV industry. Affordable SLV services would not even be an idea if it were
not for Musk’s passion.
 The largest barrier of entry into the SLV industry is initial startup cost. It does
not matter how innovative a technology or business practice is; a company
must still have a large amount of capital to enter the industry because of the
amount of equipment and understanding of the process required. Musk
provided the entire initial investment by using money he earned in previous
businesses. The knowledge required to enter this industry is 61 another
extremely challenging barrier since there are not many people with the
expertise needed to compete in the industry. SpaceX hired a group of people
with knowledge of the industry who were not given a chance to be innovative
in other companies. This allowed SpaceX to create a new company full of
experience. With the knowledge barrier comes the regulation barrier, which
makes it very difficult for any company to understand what is needed to
provide SLV services. The U.S. government provides a very detailed path for
gaining approval to launch into space and even provides counseling
throughout the process.
 SpaceX implemented two innovative techniques that allowed them to
overcome the entry barriers in the SLV industry. First, they implemented
vertical integration to reduce cost and development time. This practice was
previously unheard of in an industry that had previously prided itself on
spreading development and operations among many other companies.
Secondly, SpaceX is developing reusable launch vehicles to reduce the cost of
entry to space. The hardware is the most expensive part of a space launch, so
SpaceX intends to make all of their hardware fully reusable to get as many
 launches as possible from one physical SLV. SpaceX’s innovative techniques
are the most significant aspect of the company that has allowed them to
compete with companies that have led the industry for decades
 SpaceX is a value innovative company that is not looking to make a quick
profit or directly compete on the same technologies. Companies often fall into
a competitive mindset that hinders innovation by trying to be slightly better
than the competition. SpaceX is competing on its own terms and creating new
customers as it expands its technology. The three micro cultures are significant
to the way SpaceX operates, and they have balanced all three of these micro
cultures to stay innovative and competitive in the industry.

 
 RECOMMENDATIONS

The basic recommendations for SpaceX would be-

 With growing competition, the company would have to be equally competitive

to be the boss in the industry, many more companies are going to compete on
the basis of price as SpaceX has opened a new factor to compete on, therefore
it will have to compete on other factors as well now like safety, risk, success
rate, and much more.
 It also should focus on its mission of colonising mars, though it sounds crazy
right now but many more companies like Virgin has announced their plans of
similar nature, therefore the companies are also competing here.
 The company would have to focus on getting more international contracts as
with growing satellite needs will grow the launch contracts.
 To make the space tours as less risky as possible which can only be done with
previous testing experience as the less the number of failures the more
dependable and better it gets, it’s the same as was with aeroplanes, the first
flights were risky due to less flying experience but in today’s world its
tremendously common, therefore before sending common people in space this
should be a priority.
 REFERENCES

https://en.wikipedia.org/wiki/SpaceX#cite_note-sfn-20131124-46

http://time.com/space-x-ten-things-to-know/

https://www.seeker.com/space/exploration/spacex-focusing-on-big-fing-
rocket-phasing-out-other-systems

https://blogs.nasa.gov/spacex/

SpaceX. (n.d.). about. Retrieved from spacex:

http://www.spacex.com/about https://www.youtube.com/watch?
v=bdvv8qIl_WI#t=20sec

Ward, J. (2000). Reusable Launch Vehicles and Space Operations.

Maxwell Air Force Base:

Center for Strategy and Technology. https://www.youtube.com/watch?

v=A0FZIwabctw

Achenbach, J. (2013, November 23). Does the future of space travel lie
with NASA or space entrepreneurs? Retrieved from
http://www.washingtonpost.com/sf/national/2013/11/23/whichway-to-
space/?utm_term=.d7407c0bd7a6 https://www.youtube.com/watch?
v=Ndpxuf-uJHE

https://spacexnow.com/upcoming.php

http://www.dtic.mil/docs/citations/AD1032037

https://scholarworks.gvsu.edu/cgi/viewcontent.cgi?
article=1686&context=honorsprojects
SpaceX. (2015, June 10). SpaceX News. Retrieved from Reusability: The
Key to Making Human

Life Multi-Planetary:
http://www.spacex.com/news/2013/03/31/reusability-key-making

human-life-multi-planetary

Jacoby, O. (Director). (2011). Elon Musk Profiled: Bloomberg Risk

Takers [Motion Picture].

Chow, D. (2016, March 08). Future of Space Tourism: Who's Offering

What. Retrieved from https://www.space.com/11477-space-tourism-
options-private-spaceships.html

Engler, T. (2016, October 20). Key Strategic Partnerships- SpaceX.

Retrieved from https://kscpartnerships.ksc.nasa.gov/Success-
Stories/Partnerships/SpaceX