The contemporary business issue for Space

x in the USA
Executive summary
Here within this report, an engineering-based industry of a particular country is studied. The main
purpose is to highlight contemporary business issues of a company, corporate leader, or business manager
and how these issues may impact organization strategies, structure, and overall management. This study
can provide genuine information about how contemporary business issues can be resolved and managed
properly. For this study, a company named Space X is studied and its contemporary issues are
highlighted. Space X is an American space exploration corporation. It develops space transportation
mechanisms and services in Hawthorne, California. Space X was founded by visionary entrepreneur Elon
Musk around 2002. Using modern technology and very smart engineering space x has made significant
development regarding the mechanism and dynamism of rockets that were built to transport goods for the
earth to space. Although the idea, technology, and engineering sound amazing it does come with lots of
challenges and issues. Massive invvvestment and risk of success lie within this project. Thus within this
report, we are studying comparative business issuesss for space X.

Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................3
Buisness model discription..........................................................................................................................3
1) Launch Vehicles...............................................................................................................................4
2) Rocket Engines................................................................................................................................4
3) Spacecraft........................................................................................................................................4
Contemporary business issues....................................................................................................................5
Five Existential Challenges Facing Elon Musk's SpaceX...............................................................................5
Conclusion.................................................................................................................................................10
Introduction
1
Space X is an American space exploration corporation. It develops space transportation mechanisms and
services in Hawthorne, California. Space X was founded by visionary entrepreneur Elon Musk around
2002. His key goal was to reduce and disrupt space transportation costs and eventually colonize Mars.
The organization has engineered some finest launch vehicles as well as a satellite and a dragon cargo
spacecraft which they have already successfully flown to the international space station. The mission was
successful and the test was finally positive. The achievements of space x include a first privately funded
liquid-propellant rocket that was able to reach the orbit in 2008 and the first private company which has
successfully privatized space exploration technology with use of smart and effective technology as well
as engineering. Not only space x has been able to reach the orbit but they also manage to recover a
spacecraft. The major challenge for the rocket is its re-usability and space x has achieved it while it has
never been achieved before. Apart from that Space x is also the first private company to send a spacecraft
to the international space station and first propulsive landing for an orbital rocket. The orbital rocked
falcon 9 was reused . Apart from that space x was also a first private company to send astronauts to
international space stations. It has to flow 20 plus cargo resupply missions for international space stations
collaborating with NSASA as well as various unmanned demonstration of flight using Dragon 2
spacecraft has been successful. They sent the first manned spacecraft fight in 2020.

2
Buisness model discription

1) Launch Vehicles

 Falcon1 – it is a small Rocket that is used for placing hundreds of

kilograms in the low earth orbit
 Falcon9- It is an EELV-class medium-lift vehicle that could place up to
22,800 kilograms (50,265 lb) to orbit
 Falcon Heavy- This one is a heavy-lift rocket whose configuration is
done by the conglomeration of three Falcon 9 first stage cores alongside
a propellant crossfeed and 27 Merlin 1D engines

2) Rocket Engines

 Merlin- It is the rocket engine developed for Falcon Rocket Family

1
https://www.spacex.com/
2
https://www.marketing91.com/business-model-of-spacex/
  Kestrel- it is a LOX/RP-1 pressure-fed rocket engine and it was the
second stage main engine of Falcon 1 Rocket
 Draco- It is the hypergolic liquid-propellant rocket engine for which
monomethyl hydrazine fuel and nitrogen tetroxide oxidizer are used
 SuperDraco- These engines are the much more powerful version of
Draco engines
 Raptor- It is actually a methane-fueled full-flow staged combustion cycle
engines that are designed for the future Starship launch system of
SpaceX

3) Spacecraft

 SpaceX Dragon- It is the conventional blunt-cone ballistic capsule that

can carry cargo or around 7 astronauts into orbit or even beyond as well
 Dragon 2 or Crew Dragon- It is the successor Dragon aircraft and it
comprises wider windows along with new flight computers, redesigned
solar arrays, avionics, and a modified outer mold line

The Business model of SpaceX is divided into various factors that contribute
to its efficiency and effectiveness. Following are some of the elements-

 SpaceX consists of an active business improvement group which is

generally the source for all the clients. Besides, it also extensively uses
its website and social networking sites.
 SpaceX considers client relationships to be of paramount importance
and is committed to maintaining close relationships with each of its
clients.
 The Business model of SpaceX is predominantly formed by offering
rockets and satellites as well as the stock that it builds up. The Falcon 9
costs about $62 million whereas Falcon heavy costs about $90 million.
 The accomplices or investors in SpaceX make up a big part of the
Business model of SpaceX. The company contains approximately 3000
notable accomplices, 1100 of which are making week after week
conveyances.

Contemporary business issues

Five Existential Challenges Facing Elon
Musk's SpaceX

3
In the 16 years since Elon Musk’s Space Exploration Technologies
Corporation – SpaceX – was founded, the company has transformed the
commercial space market. It has proven that launch services can be provided
at far less cost than previously thought. It has demonstrated that rocket stages
can be successfully reused. And it has repeatedly accomplished feats no
commercial company would have contemplated in the past.

No doubt about it, SpaceX is a pioneer. But pioneers do not always come to a
good end. The life of Nikola Tesla, the inventor and futurist for whom Musk’s
other great enterprise is named, offers an example of how even geniuses can
lose their way in the jungle-like landscape of infant industries. SpaceX has
changed the world, but the jury is still out on whether it has a sustainable
business model.

That may be one of the reasons why Musk has not taken SpaceX public – even
though analysts estimate its value as high as $28 billion. The publicly stated
reason is that Musk doesn’t want outsiders mucking around in his plans to
send astronauts to Mars, as a prelude to establishing a permanent colony
there. It’s an inspiring vision, but public or private, there are some serious
challenges that the company will need to overcome first.

What follows, in descending order of severity, is my list of the five most

important challenges SpaceX will need to address in the near term – long

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https://www.forbes.com/sites/lorenthompson/2018/12/11/five-existential-challenges-facing-elon-musks-
spacex/#6cabfe0127da
before humans ever walk on the Red Planet. I should mention up front that I
have business ties of one sort or another to several of Musk’s competitors,
most notably Boeing and Lockheed Martin. But this story isn’t about them, it’s
about the structural challenges SpaceX faces as an enterprise.

A Dragon spacecraft built by SpaceX approaches the International Space

Station with cargo.
 WIKIPEDIA

Commercial market stagnation. The global market for commercial space

launches is not big. Bryce Space & Technology, an analytic outfit, figures it is
around $6 billion annually. SpaceX has come to dominate that market by
offering cut-rate prices for placing communications satellites in
geosynchronous orbit – the orbit that enables them to remain above a specific
point on the Earth’s surface even though they are traveling at thousands of
miles per hour, because they match the rotation of the planet.

Although SpaceX claimed nearly half of the market last year, demand for geo
satcom launches has stagnated. After averaging 17 per year between 2003 and
2015, demand went into a swoon in 2016. The average for the last three years
is eight launches per year. Arianespace, SpaceX’s biggest launch competitor in
the commercial market, says it needs ten per year just to remain viable. Lower
demand is widely viewed as the “new normal,” which is why suppliers are
beginning to bail. But the number of launch providers, particularly state-
backed providers, is growing. Something has to give.

Military market access. The U.S. Air Force, which manages national-

security space programs, recently awarded development contracts for a new
generation of launch vehicles. There were four competitors, and SpaceX was
the only company that didn’t get an award. This must have been a bitter
disappointment for Musk, who struggled for years to get military launch
certification of SpaceX’s workhorse Falcon 9 rocket. It seems the Air Force
was not as impressed with plans for a successor to Falcon 9 as it was with the
plans of other offerors.

SpaceX can still compete in the second phase of the program, but it looks like
the government will not be funding development of a new launch vehicle or
rocket engine for SpaceX. That vehicle, previously known as the Big Falcon
Rocket, is pivotal to SpaceX’s plans for the future – a fact reflected in its new
name, the “Super Heavy Starship.” It would be the biggest rocket ever built,
suitable for supporting manned missions to Mars, but the Air Force
apparently was looking for something more prosaic – like an upgraded Falcon
9. I asked SpaceX last week how it intends to remain viable in the national-
security segment of the launch business. It didn’t respond.

Civil space safety. NASA Administrator James Bridenstine went ballistic

when he heard that Elon Musk had smoked marijuana on a podcast, and
ordered a safety review of the two companies that have contracts to carry
astronauts to the International Space Station beginning next year (the other is
Boeing). Bridenstine has reason to be nervous, because U.S. astronauts have
been hitching rides on Russian rockets since the Space Shuttle was retired in
2011. His tenure at the space agency will be judged first and foremost by how
the transition of astronauts back to U.S.-made launch vehicles and spacecraft
fares.

The safety review of the two companies' internal operations will cover
"everything and anything that could impact safety," according to NASA's
Associate Administrator.  The space agency's safety advisory panel
emphasized in its 2017 annual report that "NASA should expect both
providers to exhibit a safety culture appropriate for human space flight."  It
is hard to know all the items a review might consider before the review has
begun, but cultural factors can influence design choices, operational behavior,
receptivity to risk and other matters bearing upon astronaut safety.  For
instance, SpaceX is the only launch company that proposes to fuel its rockets
while astronauts are on board.  That might be interpreted as a cultural
inclination to accept greater risk than is deemed prudent.

Weak enterprise profitability. Media coverage of a somewhat murky debt

placement by SpaceX last month revealed that the privately-held company
generates about $2.5 billion in revenues annually, and in the 12 months
ending in September, it produced $270 million in earnings before interest,
taxes, depreciation and amortization. However, a Bloomberg account of the
debt placement noted that the company included pre-payments by customers
in its earnings calculations while excluding some research expenditures.
Without those adjustments, it said, the company would have sustained a loss.

This is not so surprising, because SpaceX’s strategy has been to dominate the
launch market by offering lower prices than any competitors. Cut-rate prices
mean thin margins, even after factoring in Musk’s vertical-integration
business strategy (which is supposed to minimize costs). However, if the
company can’t generate respectable margins during its peak year of launch
activity – 20 launches so far in 2019 – how much prospect does it have of ever
making real money? Musk says SpaceX isn’t about making money, it’s about
going to Mars, but that brings me to one final, existential challenge.
Oversized capital requirements. Going to Mars is expensive. It requires
all sorts of costly equipment that doesn’t currently exist, starting with that big
successor to the Falcon 9 launch vehicle. SpaceX was hoping that the Air Force
would help foot the bill for developing its Super Heavy Starship (capable of
lifting a hundred astronauts at once), but the outcome of the recent military
launch competition would appear to preclude that. So SpaceX will have to
generate the necessary funding internally or seek outside financing.

Meanwhile, the company is embarked on a plan to orbit 7,500 small satellites

in a constellation capable of providing broadband Internet service pretty much
anywhere on Earth. That might one day offer SpaceX big revenue
opportunities outside the launch arena, but in the near term it demands lots of
investment funding. The risks are hard to quantify, but huge – so huge that
other companies with far greater resources have elected not to pursue such a
project. If SpaceX were generating the kinds of returns typically associated
with a successful tech company, the financial burden might be bearable. But it
seems that SpaceX’s investment plans are out of sync with the company’s
ability to raise the necessary capital.

Anybody who has followed the SpaceX saga to this point knows it would be
foolish to discount company plans. Elon Musk is disciplined and driven,
dedicated to a vision of mankind’s future in space. But when you consider the
scale of challenges SpaceX faces, it’s hard to escape the conclusion that some
adjustments in the vision are going to be necessary.

Conclusion