Abstract
Abstract
In support of the Federal Aviation Administration Office of Commercial Space Transportation's goal to “encourage private sector launches, reentries, and associated services,” the analysis described in this article is a continuation of a series of reports that are based on management theory of industry structure and innovation dynamics as applied to different segments of the emerging commercial space transportation industry. These studies are being performed to inform the output of policy and acquisition decision makers. This report specifically analyzes the commercial suborbital research industry segment using the industry structural analysis framework based in management theory and developed by Michael Porter of Harvard Business School. This analysis intentionally avoids detailed proprietary data within the commercial suborbital research market in order to avoid potential financial or political sensitivities held by members of the industry. Of the five forces, the Bargaining Power of Buyers (Force 4) is estimated to be High in strength solely due to the power of the U.S. government as a buyer in this emerging market segment. The remaining four forces are estimated to be Moderate or Low in strength. Based on the varying strengths of these five forces, which are estimated overall to be Moderate, the profitability of the suborbital reusable launch vehicle (sRLV) research market could be expected to be moderate as well. Even this level of profitability could entice new entrants into the market segment in pursuit of profits, increasing the market forces and ultimately driving industry profitability down.
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