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The Corporate Strategy in Spacex

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Corporate strategy is the way a business strives to create value, develop a unique selling advantage, and capture maximum market share. Space Exploration Technologies Corp doing business as Space X, boldly went where no aerospace startup has gone before, posting 18 successful launches—twice as many as in the previous year—on behalf of companies in five countries, as well as the Air Force, NASA, and the top-secret U.S. National Reconnaissance Office. SpaceX delivered 48 satellites into orbit and 22,700 pounds of supplies to the International Space Station, and now holds more than 60% of the global share of commercial launch contracts. But SpaceX truly earned its place among the aeronautical elite and changed the market of space flight by making its reusable rocket system seemingly as reliable as it could get. Throughout the year, it landed eight rockets on ocean-based drone platforms and sent three refurbished ones right back into the skies. The company’s 46-year-old founder and CEO, Elon Musk, even made progress on his plan to colonize Mars and save humanity from ‘some eventual extinction event’.

SpaceX is using this new data to calculate structural margins and influence parachute design. The unique results allow a more accurate prediction of reliability in the flight parachute configuration. In fact, this new data further verified SpaceX’s most recent successful developmental test, which simulated a pad abort, where the vehicle is tumbling at low altitude before parachute deploy.

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What really sets SpaceX apart, and has made it an attraction for controversy, are its prices. As advertised on the company’s website, a Falcon 9 launch costs an average of $57 million, which works out to less than $2,500 per pound to orbit. That’s very less than what other U.S. launch companies actually charge, and even the manufacturer of China’s low-cost Long March rocket says it cannot beat SpaceX’s pricing. By 2014, the company’s rocket, the Falcon Heavy, aimed to lower the cost to $1,000 per pound.

Space X also has a competitive advantage as they are involved in backward integration, that they produce their own parts to cut costs and stay competitive in the market. Moreover, a reusable rocket adds economies of scale to operations. One rocket that is used again and again makes its launch cost cheaper. Arianespace has estimated that a partially reusable rocket would need to be relaunched 35-40 times per year to realize its full costs of benefits. The Hawthorne, California-based company has drastically reduced the costs of launching rockets and, in the process, emerged as a front runner in the industry, though it does face stiff competition from Jeff Bezos’ Blue Origin with similar motives of disrupting space travel.

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