Introduction
The business similarities between Blue Origin and Amazon Inc. can be identified in the following sentence: “The primary purpose of Blue Origin is to help create a future where millions of people are living and working in space to benefit Earth” (Carino, 2021, p. 193). The two companies have the same objective: to establish an infrastructure that benefits humans. This similarity can be seen with Amazon when it began as an online bookstore. However, it now sells various products and services. To provide these goods, Amazon has had to attract customers to its site, who buy the products they purchase online.
It can also be argued that both firms have similar strategies for pursuing this objective. For example, Amazon Inc has been described as an “online marketplace platform and cloud computing company” that allows small businesses to operate online (McCurdy, 2019, p. 69). Through its platform, Amazon gives these companies exposure on the internet and makes it easy for them to sell goods and services. This is not dissimilar to Blue Origin, which designs, develops, and manufactures aerospace vehicles. Jeff Bezos founded the company, describing its aim as to help create a future where millions of people are living and working in space to benefit Earth (Weise, 2020; Desai, 2020). It builds rockets that can carry humans into space as well.
Similarities Between Amazon and Blue Origin
Similarities between Amazon and Blue Origin can be seen in the following sentence: ‘Amazon is one of the largest capitalized companies in the world.’ The two companies have been termed leading firms in their respective fields. This can be attributed to their successes. For example, Amazon was named one of the top 100 most reputable firms by Forbes in both 2007 and 2008 (Crane, 2021). In addition, it was also ranked as one of the best places to work in the United States by Glassdoor in 2015 (Osland, 2020). Similarly, Blue Origin is expected to reach its goal of “creating a future where millions of people are living and working in space to benefit Earth” (Osland, 2020, p. 5). This will be achieved when it launches a rocket into space that carries humans and supplies that can be used on Mars.
Blue Origin has been described as one of the spaceflight’s most secretive companies, which is very different from Amazon Inc. (Gudmundsson, 2018). Amazon has been open about its future and has revealed all the strategies it plans to use to grow. For example, it has identified the need to acquire small companies that sell products that are complementary to those it already sells. It also wants to buy companies that can help it diversify its range of products and services even further.
Amazon stands out from others in its field because of its transparency. However, this is not true of Blue Origin, which Jeff Bezos started. It resembles Amazon in a way because it also sells products and services. It is unknown how the company plans to continue growing. This is different from what many companies do. They reveal their growth strategies and ensure everyone knows what they are doing (Bravo, 2018). Amazon has been known for pioneering new programs and services for customers, such as “Amazon Prime, Fulfillment by Amazon, Kindle Direct Publishing, Amazon Web Services, and Alexa Internet” (Oxford Analytica, 2021, para. 7). Amazon has been known for creating opportunities for sellers to reach a wider audience through Amazon Marketplace and Amazon Associates (Duffy, 2021). Again, it is clear that both firms have similar strategies. For example, Amazon Inc creates opportunities for sellers to grow their businesses through its platform.
Amazon Inc. uses its big data to get customers interested in the products and services sold on its platform. Blue Origin uses its innovative thinking to create plans that will allow it to create a future where millions of people are living and working in space to benefit Earth (Duffy, 2021). Amazon and Blue Origin are both innovative firms with the same vision. These two companies are working towards the goal of human expansion into space. Moreover, it is also possible that both of these firms will achieve their mission by collaborating.
Blue Origin’s Top Five Competitors
Blue Origin faces competition from SpaceX and some companies developing suborbital orbital spaceflight capabilities, including Virgin Galactic, Boeing, and Masten Space Systems (Bezos & Isaacson, 2020). The operations of Blue Origin can be compared with those of its main rivals, SpaceX and Virgin Galactic. However, the two companies do differ in specific ways when it comes to their aims. For example, while Blue Origin’s objective is to create an infrastructure that benefits humans both on Earth and in space, Virgin Galactic aims to democratize space by making it affordable and accessible to people worldwide.
The operations of SpaceX have been compared with those of Blue Origin in the past. The chief executives of these two space companies are both billionaires willing to place large financial bets on the future of spaceflight, goals that include sending humans to Mars (Greene, 2021). Virgin Galactic comparisons have also been made in the past. Virgin Galactic, a U.K.-based company owned by Richard Branson’s Virgin Group and Aabar Investments PJS, is pursuing a similar vision as Blue Origin (Bezos & Isaacson, 2020). For instance, Blue Origin’s vision is to have “millions of people living and working in space for the benefit of Earth” (Blue Origin, 2022, para. 1). Virgin Galactic’s vision is to “connect people across the globe to the love, wonder, and awe created by space travel” (Virgin Galactic, 2022, para. 1). In other words, both companies envision a future of space travel to be about people and humanity rather than industries and resources as priorities. Virgin Galactic has been operating for the past few years and has already sent some people into space.
The competitor that Blue Origin is likely to acquire first is SpaceX. This is because SpaceX is a company with similar aims of sending humans to Mars, and it can offer much help to Blue Origin since they are both companies that aim to revolutionize space travel and transportation (Stone, 2021). Both firms are likely to benefit from this acquisition. Blue Origin will be able to diversify by acquiring a company such as SpaceX, while SpaceX will be able to expand and grow by joining the team of Blue Origin.
Concerning the aim of creating a future where millions of people are living and working in space to benefit Earth, it can be said that the major competitor for both Amazon and Blue Origin is NASA (Campbell, 2020). Both firms have similar ideas for accomplishing this objective, but NASA’s methods may differ from those of Amazon and Blue Origin. For example, NASA believes it can achieve this by building a spacecraft carrying a crew of humans to Mars. Blue Origin also wants to send humans into space, but it aims to achieve this by using vertical take-off and landing technologies. It may also be able to achieve its aim by making the components of spacecraft reusable so that they can be relaunched after only refurbishment.
Launching IPO in Blue Origin
If Blue Origin launched IPO, I would advise Amazon shareholders to sell their shares. I would explain to them that Blue Origin is a startup firm a fraction of the size of Amazon, which will impact Amazon’s shareholders negatively. Blue Origin has not achieved viability or profitability (Lal, 2019). Therefore, investors should be realistic and realize that the company has no potential for gains in the short term or medium-term. The conclusion has been reached by comparing its performance with its competitor, Virgin Galactic, which will be discussed below in greater detail.
I would also advise investors to be wary of investing in Blue Origin because it has no exclusive contract with NASA. The agency stated that “’it will resume work with SpaceX’ on the lunar lander contract ‘as soon as possible’” in response to the lost lawsuit filed by Blue Origin against NASA’s collaboration with SpaceX (Szekely & Shepardson, 2021, para. 4). In other words, if Blue Origin were to go public, it is at a clear competitive disadvantage in a highly new industry with questionable future prospects. Not only are there small chances of short-term and medium-term gains, but Blue Origin specifically has no exclusive relationship with NASA to make it a prospective investment option.
Moreover, I would advise the company owners not to go through with the IPO because they might lose their funding if they cannot raise capital through this process. For example, Blue Origin’s CEO, Bob Smith, stated that the company’s rockets are not yet in the space-faring stage and are still in the research phase (Foust, 2018). Instead of relying on IPO to raise capital for the firm and its operations, I would advise Blue Origin to continue having partnerships with other private companies such as Virgin Galactic and Amazon. This could benefit it since these firms can help Blue Origin by offering discounts on space packages (Foust, 2018). In addition, I would advise Blue Origin to explore more financing options, such as seeking funding from public institutions or government organizations such as NASA.
IPO refers to the initial public offering. It is a way of raising capital that allows companies to raise financial freedom by selling their business shares to the public. On May 18, 2000, Amazon filed with the SEC for an IPO, which was to take place eight months later. This was in response to a request from its board of directors (Taufik, 2020). The board of directors also requested that Amazon’s stock price be floated once an agreement was reached on the company’s long-term strategic plans for growth (Brandenburger & Nalebuff, 2021). The IPO also allowed Amazon to sell stakes in its online services unit to use the money raised from the offering as capital for new projects and acquisitions. There were two class options issued: A and B. If Blue Origin launched an IPO, it would be dealing with massive amounts of capital compared to that used by Amazon (Stone, 2021). This is because Blue Origin is working on gaining government funding to carry out its plans (Brandenburger & Nalebuff, 2021). In contrast, Amazon is a firm that wants to rely on private capital to reach its goals.
Given that Blue Origin does not release its financials, there is no way of knowing how much it has spent on research, development, and marketing and how much it has made from this. However, we can analyze the budget of other private firms in the same space industry to get an idea of what Blue Origin might have spent and made so far (Bennett, 2022). For example, SpaceX spent about $ 1 billion developing its reusable rockets, which later turned out to be a success.
According to a recent article on Business Insider, a report released by NASA indicated that more than two dozen companies expressed interest in an opportunity to bid for contracts related to deep space missions. The total amount of competition was more than $16 billion (Sorkin, 2021). The only company that has been awarded a deal so far is SpaceX. Blue Origin and another firm, ULA, are yet to be awarded contracts by NASA. If Blue Origin were to receive a contract from Nasa, it would be something that potential IPO investors could benefit from since it would no longer be at a disadvantage. Although NASA expressed openness to cooperate with other companies besides SpaceX on its other projects, such as Artemis, Blue Origin lags behind its rival technologically (Szekely & Shepardson, 2021). This means that Blue Origin must fulfill two conditions for IPO investors to consider it as an option, which include NASA partnership and technological competitiveness. Even then, the investment should be looked in a long-term perspective since Virgin Galactic has shown a lack of profitability within the industry throughout its existence.
Virgin Galactic’s Financials
Virgin Galactic is Blue Origin’s counterpart, and its financial performance does not show promising projections for the future when one looks at its shares and growth. Figure 1 below provides an illustration of how Virgin Galactic has performed in previous years. It does not reflect a company indicating a prospect of growth since the space industry is still in its infancy. By reflecting on the performance data of Blue Origin’s competitor, the recommendation in the previous section is substantiated that investors should only consider these types of companies as long-term options with high potential. This implies that no investor should consider Blue Origin as a short-term or medium-term investment option.
Firstly, Virgin Galactic’s financials show that the industry is not profitable, but it was founded only in 2004, which means it is yet to show its long-term potential. Secondly, Blue Origin lacks exclusive contracts with NASA, which already puts it at a clear competitive disadvantage. Thirdly, Blue Origin lags behind SpaceX in terms of technological developments. Thus, investors should only invest in the company, only if all three conditions are met. These include Blue Origin being a long-term investment, Blue Origin securing NASA contracts, and Blue Origin becoming as technologically competitive as SpaceX.
Virgin Galactic’s financial success lies in the spaceflight industry. According to Bloomberg financial reports, Virgin Galactic has sold more than 600 tickets at $250,000 each (Furgang, 2018). This means it has already made over $130 million in revenue, even if we assume that NASA does not award it with a contract this year (Bennett, 2022). The space flight market will be challenging, but the space flight sector has been growing over the past few years. If they can successfully bring people into outer space via a company’s sales team and through paid space cruises, I think that in terms of profitability, it would be a good idea for investors to watch closely but avoid any investing activity before the previously mentioned conditions are met.
Conclusion
The key takeaway points from the analysis are that both Amazon and Blue Origin have different goals. Amazon aims to innovate and sell its products to consumers to increase its profit. In contrast, Blue Origin aims to cease reliance on government funding and develop a more efficient means of reaching space to focus on making a profit. If Blue Origin decides to go public similar to Virgin Galactic, investors should only invest in the company, only if all three conditions are met. These include Blue Origin being a long-term investment, Blue Origin securing NASA contracts, and Blue Origin becoming as technologically competitive as SpaceX.
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