Executive Summary
Emirates Institution for Advanced Science & Technology (EIAST) is involved in the development of technological solutions for space exploration. Many opportunities exist for advanced technology developing institutions, especially in relation to space programs. EIAST can exploit the space tourism market to enhance its future growth. In this report, the possibility of space tourism is identified through idea generation and concept development techniques. The service is in the developmental stages since adequate technologies are yet to be developed.
In this paper, the financial analysis of the venture (sales forecasting) is performed in relation to the opportunity identified. The analysis is based on results of a survey conducted by Futron Corporation. In conclusion, the opportunity is regarded as a lucrative venture for EIAST. The institution has the technical and technological capabilities to achieve the objective. In addition, the industry forecasts indicate a growing demand for space tourism in the future.
Introduction: Company Profile
Emirates Institution for Advanced Science & Technology (EIAST) was established by the Government of Dubai in 2006 (Emirates Institution for Advanced Science & Technology [EIAST] 1). It is a strategic initiative by the Dubai and UAE governments. The entity aims at inspiring scientific innovation in the region and enhancing technological development. Another major objective of this firm is to facilitate sustainable development in the region. The institution also promotes scientific research and technological innovation in the UAE (EIAST 1).
EIAST provides a wide range of services to clients in this sector. Some of the services include satellite imaging, ground station support, antenna leasing, outreach and education, as well as joint development projects for mutual benefits (EIAST 1). In addition, the organisation offers a wide range of value-added services. They include, among others, civil development and construction, infrastructure, and change detection technological services. Environmental survey and monitoring, emergency responses, and disaster management are other services offered by the institution.
The current report is an analysis of space tourism, a new product that EIAST plans to launch in the market. Among others, the report reviews the current market trends and provides a sales forecast for the venture.
EIAST Product Innovation Charter
A product innovation charter entails a set of policies guiding the development of a new service. EIAST charter can be described as the strategic initiative to inspire scientific innovation in the Emirates. The major driving objective of the organisation includes advancing sustainable technology in the UAE. EIAST possesses the core competencies (technical and expertise) needed to achieve this objective.
Market Trend Analysis
According to Seymour (34), the quest for adventure saw the onset of the space race. Humans left the earth for the first time in the 1960s. The cold war also facilitated the growth of this industry as countries competed to display their technological might. Today, capitalism is the major driver behind the development of advanced technologies (Seymour, 34). Led by the US, the global community is exploring and developing markets in this industry. The Middle East has not been left behind.
Abu Dhabi is developing the Gulf Earth Observation Space Centre [GEOC] (Seymour 35). Saudi Arabia’s King Abdul-Aziz City for Science and Technology launched a remote sensing satellite in 2004. It intends to launch 18 additional satellites in future (Seymour 35). Earlier in 2010, Iran also launched its own satellite with the intention of spreading monotheism, justice, and peace (Dillingham 19). EIAST has made its contribution to this race by launching two satellites recently. The two are Dubai Sat 1 and Dubai Sat 2 (EIAST 1).
The Middle-East’s advanced technology market is poised for phenomenal growth, considering the recent investments made in this sector. Other factors that fuel the demand for these services in the region include the rising affluence of the Middle East consumers and increasing demand for sophisticated satellites by businesses. As such, EIAST can exploit this opportunity to expand its services to other sectors in the industry.
According to Dillingham (1), the commercial space launch industry has recently experienced massive growth. Previously, the focus has been on delivery of payloads, including satellites, into the orbit. The delivery was achieved through the use of spacecraft that remained in space. However, such launches have reduced. The industry is now concentrating on space tourism (Dillingham 1). In the US alone, there is a marked growth in the development of technologies aimed at enhancing global tourism. The US Federal Aviation Administration (FAA) is anticipating increased commercial launches in the near future (Dillingham 16). Figure 1 below shows the trend in relation to commercial launches in the US between 1997 and 2010:
Market Opportunity Identification
Space tourism is a developing industry. According to Seymour (34), the market is relatively lucrative. For instance, the first space tourist paid $20 million to the Russians. The tourist, Dennis Tito (an American billionaire), spent less than eight days in space. A number of space tourism companies have been established, with the UAE hosting some of them. Examples of these companies include the Abu Dhabi Aabar Investments and the Virgin Galactic (Seymour 35). The former has paid $28 million for a 32% stake in Virgin Galactic. On its part, Virgin Galactic is selling tickets for $20000 each. It has already sold vouchers worth $40 million in deposits.
Space tourism is a very lucrative opportunity for EIAST in the recent future. As more and more people are assured of the safety of these trips, the industry will become an important area of investment. The advanced space technologies developed at EIAST can also be put into more profitable ventures.
The entry of private investors into the space flight control sector has led to the rapid development of this form of tourism. For instance, plans are underway to launch circumlunar tourist flights and establish space hotels (Beard and Starzyk 44). Further developments are expected to make these trips more affordable to attract additional customers.
Idea Generation
Idea generation constitutes a very critical aspect of the design and marketing of new products. It is also essential in marketing strategy development and establishment of effective advertising copies. As such, the process is crucial in the identification of the proposed service venture. According to Ulrich and Eppinger (23), there are numerous techniques of idea generation. They include brainstorming, attribute listing, ‘brainwriting’, lateral thinking, and product checklists.
One of the idea generation techniques used in the identification of space tourism for EIAST includes brainstorming. The technique entailed group creativity, where members of the organisation shared ideas spontaneously (Ulrich and Eppinger 24). The groups consisted of six individuals. The target was the identification of more opportunities for EIAST.
Attribute listing was another technique used to identify the proposed service. The approach entails listing key attributes of products and modifying them to improve the results (Ulrich and Eppinger 26). In the case of EIAST, the various aspects of the services offered by the institution were listed. Consequently, it became apparent that the institution can benefit from widening the scope of these services to incorporate the emerging space tourism market.
The third and final idea generation technique used was the visioning style of guided visualisation. The model involved generating ideas based on imagining concrete and ideal scenes of the desired future. The future application of advanced technologies is on space tourism. The venture is also very lucrative.
Service Concept Development
Concept development is one of the most critical steps in the development of a new product. Ulrich and Eppinger (42) provide a working definition of a concept in this context. Ulrich and Eppinger view it as an approximate description of the required technology, working principles, and product form.
The figure below illustrates the concept development process:
For EIAST to remain competitive, the management must encourage more innovation. It should set the stage for the generation of revolutionary ideas. A concept development flowchart provides an efficient, structured approach to addressing an issue. Three major steps are involved in this process. They include problem definition, concept generation, and concept evaluation or selection (Ulrich and Eppinger 54).
Based on the development process flowchart, the following concept statements were developed in line with the service opportunity identified for EIAST:
- EIAST, a leader in the development of advanced technologies in the Emirates, will deliver a revolutionary additional exciting service to humans. Many people dream of going to space. However, since most of them are not astronauts, the thought seems impossible.
- Current methods, machinery, and equipment have not been very supportive of manned space flights. EIAST intends to be at the forefront of the development of space tourism.
- Given the current success of manned flights, the development of spacecraft capable of carrying tourists to space is a possibility. EIAST will partner with like-minded organisations to make space tourism attainable in the near future.
- Offering space tourism services is a very lucrative venture, although expensive to some. Future developments will make the services more affordable, opening the industry to more consumers and increased profitability.
- Space tourism is not a highly developed enterprise. The complex nature of this enterprise requires intellectual and technical partnerships to enhance the commercialisation of the endeavour.
Best Service Concept Evaluation: Full-Screen Technique
Full-screen evaluation of the proposed concept for EIAST will determine whether or not technical resources should be devoted to the development of the space tourism idea. Full-screen technique alternatives range from mathematical models to simple checklists, managerial opinions, and judgments (Ulrich and Eppinger 71). The current report relies on managerial judgments and checklists to determine the feasibility of the venture and the ability of EIAST to invest in this sector. The company has the necessary financial and technical resources to venture into this industry. The management team has experience in the advanced technology industry. As such, it will offer support to this venture.
The best concept for EIAST will be the development of spacecraft capable of taking tourists to space. The organisation should also partner with other entities sharing the same dream to make space tourism attainable in the near future.
Sales Forecast Analysis for the Venture
To enhance the affordability of any commercial venture, a demonstrable cost model is needed. The model is used to predict whether substantial or reasonable returns on the original investment are needed or not. Providing space tourism services is a lucrative venture, albeit very expensive. As a result, it is essential to determine the financial resources needed for investment and projected returns. In addition, since this is a relatively new venture, actual costs and expected returns cannot be established. The company can only work with estimates.
Two types of services will be offered for public space tourism. The first is the suborbital orbits. It involves short pleasure trips beyond the earth’s atmosphere and back. The second is orbital flights, which includes trips to low earth orbit. According to Beard and Starzyk (12), the cost of orbital space travel is not likely to go below US$50 million in the next 20 years. The current price is US$20 million. However, suborbital travel prices are expected to drop from the current US$ 100000.
Futron Corporation conducted a survey on individuals that can afford space tourism at the present rates. It was found that the majority of these consumers were interested in taking the trips. The following figure illustrates these findings:
A substantial number of individuals are ready to spend a significant amount of money on space tourism. Around 21%-54% were willing to spend on both orbital and suborbital flights at the current prices.
The table below indicates the demographic attributes of individuals surveyed by Futron for orbital and suborbital flights:
Most of the respondents were willing to pay for both space flights if accorded the chance. The figure below sums up the overall discretionary spending patterns for respondents interested in space tourism in the Futron survey:
From the figures above, Beard and Starzyk (12) forecast that by 2021, suborbital space travel would attract more than 15000 passengers annually. The figure represents US$700 million in revenues. On the other hand, orbital space travels would host around 60 passengers annually. The number translates to more than US$300 million in revenues by 2021.
Space Tourism Product Protocol
Product protocol is regarded as a document put together to coordinate the activities of a multidisciplinary product development team (Ulrich and Eppinger 84). The space tourism service protocol can be described using the target market, product positioning, augmentation dimensions, competitive comparisons, regulatory requirements, and timing. Currently, this venture is a product for the rich. However, this is expected to change in the future. Regulations of this industry are also in the development phase. Competition to actualise the service is relatively new. However, developing a product should begin immediately.
Product Launch Planning
EIAST has the technical, financial, and expert capabilities to explore the space tourism industry. All the institution requires is to designate facilities, experts, and other relevant resources to this venture.
Conclusion
Space tourism is not very popular with consumers today. However, the projected future returns from the venture make it lucrative for EIAST. As the industry grows and competition takes root, the market will attract more consumers. It is expected that advanced technological development will reduce the cost of space trips. EIAST stands to gain by offering space tourism.
Works Cited
Beard, Suzette, and Janice Starzyk 2002, Space Tourism Market Study: Orbital Space Travel & Destinations with Suborbital Space Travel. Web.
Dillingham, Gerald 2012, Commercial Space Transportation: Industry Trends, Government Challenges, and International Competitiveness Issues. Web.
Emirates Institution for Advanced Science & Technology 2014, Explore EIAST. Web.
Seymour, Richard. “The Space Race.” Middle East 407.1 (2010), 34-35. Print.
Ulrich, Karl, and Steven Eppinger. Product Design and Development, New York: McGraw-Hill, 2012. Print.