Overview
SpaceX is one of the most valuable privately owned companies in the world. In its 16 years of operation, the company has developed revolutionary ideas, including developing the world’s first reusable orbital-class rocket, also known as Falcon 9, and the world’s most powerful Falcon Heavy rocket (SpaceX, n.d.). The company’s success in space exploration and other sectors of its operations is attributed to Elon’s approach to strategy, which is unique and unconventional.
Musk uses a low-cost and differentiation strategy to develop reusable rockets, which is considered a revolutionary idea. Traditionally, space rockets were only used once by organizations exploring space and later discarded (SpaceX, n.d.). This resulted in the high cost of operating space exploration projects. This strategy and approach to space exploration would significantly reduce the cost of exploring space and even make it more accessible.
Musk’s ability to significantly reduce the cost of launching space rockets has changed the industry and forced his competitors to revise their approaches to space exploration. SpaceX operates in a fragmented industry, and market segmentation is one of the strategies used in such industries. This often involves the identification of specific customer segments and niches within the industry. Through this, companies within the industry can tailor their products, marketing efforts, and services to meet the market segment’s unique needs. SpaceX targets commercializing its space vehicles by making them more affordable and accessible to different customers.
Motives for Creating SpaceX
While creating SpaceX, Musk had several motives that significantly swayed most decisions. Elon had a motive to reduce the cost of space exploration. He firmly believed that the high cost of space exploration was a significant barrier to colonizing other planets (Curious Elephant, 2018). This motive influenced Musk’s decision to put a lot of emphasis on the efficient manufacturing of space vehicles and also the focus on reusable rockets.
Musk also created the firm with the motive of challenging the status quo. Musk was not fully satisfied with the progress made in the aerospace industry. He saw limited ambitions in exploring space from the existing space organizations. He wanted to break the monopoly and establish norms within the aerospace industry through SpaceX. These motives swayed some of his decisions to pursue aggressive timelines and drive innovation in the aerospace industry.
Elon’s Strengths and Weaknesses in Creating SpaceX
Elon’s prior experiences played an essential role in creating SpaceX. His prior experiences contributed immensely to his strengths and weaknesses in forming the company. One of Elon’s strengths that plays a significant role in incorporating SpaceX is his vision. He is a visionary leader; for instance, he is ambitious to make humanity multi-planetary.
His visionary leadership style has provided the company with a clear direction, attracting others to join him in pursuing such an ambitious dream. Musk also has an entrepreneurial spirit that can be considered his strength (Curious Elephant, 2018). He has a successful background in entrepreneurship with businesses like Tesla and PayPal under his name, which has helped him develop valuable skills and a mindset.
Despite Elon’s strengths, he also has some weaknesses in business. He is known for creating highly ambitious timelines for his projects. Such a timeline often creates unsustainable pressure on the team responsible for delivering the project. This can strain resources and compromise the quality and safety features of the products if not appropriately managed (Curious Elephant, 2018).
Elon lacked aerospace experience while creating SpaceX, as he did not have a background in the industry. Even though his contribution to the aerospace industry was valuable through conventional ways of thinking, Musk lacked deep knowledge of the industry, which presented many challenges to the company in navigating the industry’s complex safety and technical requirements regulations.
Uniqueness of SpaceX
Like its competitors, Blue Origin has a strong presence in the commercial aerospace industry. However, its leadership style and products have enabled it to differentiate itself from its competitors. The company has made a massive stride in developing Starlink Internet.
This satellite constellation targets providing global broadband internet coverage to people (Starlink, n.d.). This product has enabled SpaceX to differentiate itself from its competitors in the industry. Unlike in Blue Origin, where Jeff Bezos has taken the behind-the-scenes role, Elon’s involvement in the company has contributed to its rapid innovation and unique culture of pushing boundaries.
Adoption of SpaceX Models
There is a high possibility that most of the incumbent companies in the aerospace industry will adopt some of SpaceX’s elements. One element that other companies might adopt is the cost-reduction measures employed by SpaceX. The company concentrates on efficient manufacturing and vertical integration, which might inspire competitors to reassess their operations to reduce overhead costs (The Verge, 2017). The survival of the incumbent companies will be determined by their ability to cope with the disruption within the industry.
Despite the disruption caused by SpaceX through innovative technologies, the incumbent has the finances, experience, established infrastructures, and relationships to help it compete with the rest of the companies in the industry. Blue Origin, just like the incumbent and SpaceX, can be a potential threat in the industry. The company has invested substantially in space technology and infrastructure development and aims to take humans to space and solar exploration. Even though the company has not achieved as much success as SpaceX, its resource capabilities and long-term management goals make it a potential industry threat (Curious Elephant, 2018). The competition between SpaceX and Blue Origin has the potential to further innovation and technological advancement in aerospace.
References
Curious Elephant. (2018). SpaceX Vs. Blue Origin Vs. ISRO, who will dominate the Future of Space? Web.
SpaceX. (n.d.). Falcon 9. Web.
Starlink. (n.d.). World’s most advanced broadband satellite internet. Web.
The Verge. (2017). SpaceX relaunches a used rocket, makes history. Web.