Question

Evaluate the competitive forces for the space launch industry to identify the forces controlling its profitability (e.g., Five Forces analysis). Is SpaceX positioned for long-term profitability?

Answer 1

In Porter's model, the five forces that shape industry competition are

1. Competitive rivalry

This force examines how intense the competition is in the marketplace. It considers the number of existing competitors and what each one can do. There are few organisation invovld till in the space launch industry.so it create moderate level of competition.

2. The bargaining power of suppliers

This force analyzes how much power a business's supplier has and how much control it has over the potential to raise its prices, which, in turn, lowers a business's profitability. Businesses are in a better position when there are multiple suppliers.but here space industry are few manufactures.so hold more power on supply.their price can determine profitability of space company’s profitability.

3. The bargaining power of customers

This force examines the power of the consumer.normally space industry is small,the customers are also few and purchasing decision is longterm decision after considering lot of factors.therefore bargaining power of buyers is low

4. The threat of new entrants

This force considers how easy or difficult it is for competitors to join the marketplace. But in the space industry is low since it must have huge investment.the cost for production and testing of aircrafts need huge financial base

5. The threat of substitute products or services

This force studies how easy it is for consumers to switch from a business's product or service to that of a competitor. It examines the number of competitors.as it need huge investment it must support of favourable price or discount, government restriction(transfer technology).how ever when comes to a finished product there is less chance for finding resemblances. so less threat from this force

SpaceX has hurtled to the top of the launch industry over the past decade, last year bringing in more revenue than any other rocket company. SpaceX has reached to the top of the launch industry over the past decade, last year bringing in more revenue than any other rocket company

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