MSL303 Minor 2021

Anoushka Gupta

2018ME10590

Q1. A) SWOT Analysis of SPACEX

Strengths

 The most advanced rockets & spacecrafts for private citizen only at a comparatively low-cost
 Strong leadership and backing by the forces of leading evangelists of the USA
 Partnerships with NASA in receiving data to improve and perfect vehicles of SPACEX
 Vision to change the world with technology acts as key driving motivation of the workforce
 Mission to launch thousands of satellites into the low earth orbit would enable great
developments in wireless communications
 Intellectual property: patents, engineers, and research & development by aerospace experts
 Highly innovative culture balances the high-pressure situations for successful rocket launch
 In-house fabrication of all the components helps in better troubleshooting by the original
developers in critical moments and helps in cost reduction in assembly
 Strong R&D and top-notch technology in unique reusable and computational systems

Weaknesses

 Challenges and uncertainties involved in invention of something completely new (never built
and tested before by anyone)
 Low profitability, typical to a young company incurring loss as lot of costs into R&D
 Limited number of crew members and limited payloads reduce the efficiency of the system
 High investment needs and dependency on financial capital. Expensive hiring of expert
engineers.
 Headquarters in LA, California, need to cover distance to go to launching zones in Hawaii
 Unease of scale due to lack of resources to sustain exponentially growing needs when
scaled. Would take a lot of time never have direct customers/open to general market (B2C
from B2B)

Opportunities

 Technology and algorithms can be used in other applications and can be sold to companies
building autonomous systems
 Space tourism available to public can create high revenue as people will agree to pay any
price to go to moon and mars!
 No competition, no other commercial unit has such technical and financial ability (very high
barrier to entry)
 Using satellite data in different applications and partnering with government and
broadcasting companies.
 Transporting cargo to ISS for other government space organizations
 Pursuing goals of helping in public research for the first ever human - carrying spacecrafts

Threats

 Pollution regulations imposed by government would force SPACEX to make changes in their
structure and manufacturing plants to reduce plume spread.
  Dependence on contracts as the main revenue stream, no direct customers.
 Threat of new startups such as started by SPACEX ex-engineers: "Relatively Space" who are
automating manufacturing of rockets
 High risk of failure due to environment induced pressure imbalances
 High Interest rates on loan payback

Chart 1. Mapping key points in SWOT Analysis of AmazonGO

Q1. B) PESTEL Analysis of SpaceX

Political

 The position taken by the president, the office of space affairs and department of energy, US
determine how commercial space travel will take shape. As the decisions of NASA one of the
key stakeholders of SPACEX depends on the orders from the white house!
 Lack of support by political leaders and stakeholders who were also mentors of Elon Musk

Economic

 Very high production cost and thus the price to launch space travel not economical to the
general market
 Low demand and lack of affordable supply of noble materials and rocket component
manufacturing
 The 2008 recession impacted SPACEX very negatively almost to bankruptcy

Social

 The crew members selection is associated with donations to philanthropic hospitals and
private citizens & entrepreneurs are chosen, via inspiration scheme!
 Elon Musk a pioneer in bringing change in society, his past startups driven by technology
have been revolutionary and SpaceX thus has a very high social reach (with livestreams of
every rocket launch)
 The society is excited about the future of human life on Mars as envisioned by Elon Musk
Environmental

 Lots of pollution and lack of sustainable green energy systems used by SPACEX
 Policies like ban on toxic materials/chemicals, plume levels monitoring etc will control the
laboratory practices
 Disposal of lots of e-waste need to be proper.

Technological

 The technology is the heart and soul of SPACEX. The most tech savvy reusable systems are
the most unique.
 Any technological developments by NASA and universities in aerospace engineering like the
invention of Nitinol material would be adopted by SPACEX to shape its future.
 Advances in mechanical and aerospace engineering need to be incorporated,

Legal

 Legal bounds of contracts can cease SPACEX not to benefit from the NASA confidential
research data
 PPP partnerships (Public private partnerships) with the government can fuel SPACEX’s
research which can fulfil government and NASA’s goals

Chart 2. PESTEL Analysis of SPACEX

Q1. C) SWOT Analysis of Amazon GO

Strengths

 Amazon's USP of delivering streamlined hassle-free experience delights customers with

absolutely fast "Grab and Go" process
 Accuracy challenges to correctly detect item type when items have same weight and
similarly detect similar human physiques as different humans
 Leveraging sweet data for efficient and optimized inventory management strategy: reduce
labor costs and thefts
 Profile: what customers stare but don't buy, how they move and use in other amazon apps
 Amazon has $12B operating profit which increases financial ability of incurring initial losses
 Large scale warehouses and Amazon network (offline: 700 Whole Food outlets in US which
give a very big retail advantage and online: AWS)
 Strong R&D and technology in computer vision, deep learning and sensors through top-
notch engineering workforce
Weaknesses

 Dabbling in many big areas together:

1) Inventory Management 2) Remove manual intervention 3) Deduct right money from the
right person in real time fastest way 4) Reducing computational costs
 Expensive hiring of engineers, as well as existing lack of motivation to amazon GO engineers
as the launch and scaling is delayed whereas other amazon engineers get gratified.
 Amazon is already in ecommerce delivery, and the customers would prefer delivery at their
homes rather than going out. The Amazon Go platform reduces some traction on their star
product.
 Not economical as there are small profit margins. Due to high costs of expensive cameras,
developing the most efficient algorithms, and multiple different sensors
 There are extra needs to address as the product rolls for eg: how to limit the number of
people in a store, how customers refund and return items
 Unease of scalability as when data multiples, amazon would need exponentially high amount
of data storage units
 Lack of 100% Amazon experience as most of the products they sell are not made by Amazon
 Need to build/change the ceiling and shelves of retail stores from scratch and spend millions

Opportunities

 Growing population of boomers and busy affluent Gen Z market who want to save time with
quick food choices
 Extension to books and other items from grocery. No shame felt by customers in buying just
one item of minimal cost
 No competition, no other startup has such technical and financial ability
 Designing attractive restaurant like stores where hunger is satiated without paying bills or
checking out
 Sharing data to outsource certain aspects like cyber security and partner with makers of
product to give them feedback
 Computer vision algorithms can be put to use in other applications and can be sold to
companies building autonomous systems

Threats

 Coming under regulations of compulsorily accepting cash

 Misuse by hacking of app, problems in keeping data safe and secure
 Other startups like Focal systems have already put cameras to optimize inventory and have
very high traction with retail stores
 The customer feels like stealing even when they are not, which is negative experience
 Privacy concerns by customers as their whole body will be mapped
 Customers would want to clear doubts and bargain/ask for discounts, use coupons and
discuss price with the cashier
 Easy to fool the algorithms if environment is not clear and ideal for clear distinctions
 Replacements by advanced "vending machines" and "self-checkout" machines
 Chart 3. SWOT Analysis of Amazon GO

Q1. D) PESTEL Analysis of Amazon GO

Political

 Amazon Go needs to give a disclaimer about the kind of sensors/cameras and data it is
collecting.
 Some things like privacy breaches may not be politically acceptable by political powerhouses
and can create protest and unrest by public.
 Also, replacing all the labour could cause protests as people’s source of income is destroyed.

Economic

 People don’t have mobiles, and even with mobiles they need to have long battery life to
sustain smooth Amazon Go experience.
 The general market may not pay extra price to avoid waiting lines depending on their
income status.

Environmental

 COVID environment would give more importance to safety, thus more cashless contactless
experience would have been highly successful.
 Clear air without obstacles inside the stores not having “fog” for all wireless communications
to happen accurately.
 Amazon should dispose off e-waste as per policies

Social

 Lack of social interaction makes whole experience sceptical and unattractive

 There may be more sectionalization of society (who can pay more and who cannot)
 Human’s love bargain which is lacking with no staff who can help in deciding what to buy
 More decision paralysis from human as all choice left to a customer without any time factor

Technological

 Self-checkout machines often need multiple tries (of swiping cards again and again) which
increases advantage of AmazonGO format given there are no technical bugs in their app
  Technological systems need to be robust against random noise signals and temperatures.
 New developments in robotics and artificial intelligence would enable AmazonGO to add
more and more features replacing all the manual labour and change the future of retail.

Legal

 Property rights of storage areas. Amazon Go is keeping many stores in stealth mode and
giving rent for a long time which needs to follow compliance rules.
 Cash regulations: Regulations like “demonetization” cash free would have positive impact,
whereas policies like compulsory acceptance of cash would have negative impact.
 Age bar policies in alcohol sections woud need human intervention to check identity

Chart 4. PESTEL Analysis of Amazon GO

Q2.

Yes, there can be negative demand in the market. As it is possible that there are products have no or
low perceived usage context: customers do not need the product, don’t know how to use it or how
will be of use to them, and thus don’t like it.

This can happen when marketers do not keep the product user centred, and the product or service is
doing something extra which has no need or meaning! The product/service’s perceived value can be
even negative value for a very high number of users (major section of the market) that they might
even pay a price to avoid that product, this is negative demand. The customers may instead mis
appreciate the product as per their beliefs. The product may be good and of high quality, but it just
doesn’t connect with the market because of non-existence of the need felt by customers, or
different mindsets of the market than what the company would desire, customers have lack of
access or means to apply and understand the product’s purpose.

Examples:

1. Vegetarians/Vegans and religious Hindus have a negative demand for any kind of beef,
meat, prawn etc. The beliefs of the vegetarians are very strong, and they are motivated to
follow religious sentiments. Thus, they would never buy the non-veg products as they don’t
need it. These non-veg brands lose some revenue in India specially, as the non-veg food
products do not address the need of the vegetarians.
2. The high-speed internet doesn’t solve a need of Indian low or middle-class rural population
and also, they don’t know the applications of the service because of lack of vernacular
applications of internet such as money transfer from mobiles. Thus, we can say that the rural
population have negative demand for 5G and fast broadband connections as they don’t have
IT literacy and awareness. The existing digital divide formed based on different income levels
 and different needs typical to the rural areas. Any product which is not tailored to meet
those typical needs will not work because of negative perceptions. Even the mobile data 4G
met the young urban and semi-urban Gen Z’s population demands at a satisfactory level and
thus there was no gap left which can be filled with the faster 5G and thus the expected
demand of such high-speed services is negative.
3. Solar Panels. There were no users of solar panels in India as there was very high cost
associated with setting up the technology at homes which was not positively perceived with
extrinsic benefits (such as contributing to environment). Because of the cost-conscious
mentality of the Indian population who already used the alternative source of energy
without any hassle, they did not adapt to solar panels voluntarily. The government then had
to introduce subsidies so that people install solar panels.
4. Insurance policies. It’s generally a non-preferred choice of investing money (compared to
investing in bonds, mutual funds, bank, tangible assets, crypto trading etc. This creates a
negative demand for these policies. It is “disliked” by many as it has no short-term benefits
and thus perceived as not useful.

The marketers then need to connect with customers and enlighten them with the positive
perspective which can change the perception of the product. There needs to be more incentivization
to create positive demands. We must have conversations to know customer’s needs and use
techniques like need validation and then pivot the product as per the correct need. Use of
conversational marketing to reframe the product/service value proposition such that it meets needs
directly is required with negative demands.

Q3.

Make My Trip has individual products or services in the online travel segment such as airline
ticketing, hotel booking etc. Breaking down MakeMyTrip product line and calculating market
estimates for each of the product and its growth rate will help us in strategizing the production and
management of extra resources and avoid shortage/holding costs. The market demand for each
individual product is calculated and found out via secondary data from market sources (such as
mospi.gov.in and dgca.gov.in, internet access data: trai.gov.in) or via market research. This research
then gives us a total estimation of the demand for the product. Naturally, it also gives us an
estimation of the market potential as well, depending on the market share predictions of the brand
and its advertising strategies to increase brand presence and brand recall to reach close to the
potential value.

Factors of COVID:

Passengers carried by domestic airlines during Jan 2021 were 77.34 lakhs as against 127.83 lakhs
during the corresponding period of previous year thereby registering annual growth of -39.50 %.
Similarly, the February month also saw a drop to the tune of -38% dropdown corresponding to
February 2020. The year 2020-2021 has been an exceptional year as the pandemic has set in with
effect from March, 2020 with Governments introducing lockdowns to contain the spread of COVID
19 virus. This has hit the travel industry to the maximum. However, the industry has now started
recouping the loss and making come back. As the citizens got bored in a lockdown since a year and
are now being subliminally encouraged by travel companies to come out and travel. The vaccinations
have also reduced the fear of COVID which was earlier restricting citizens to take risk of going out!
But still we can say that the government is still advising the senior citizens to not travel and there has
been a ban on foreign travel for over a year. Many airports have only limited operations with
terminals shutting down, reducing the air traffic capacities. Also a critical measure came by
government to put a cap on the maximum and minimum prices of airlines for uniformity across
brands and affordability purposes. These prices were used to calculate the average value of a ticket
across two segments – Rs. 3500 for 80% of flights are in <40 min. duration and in regular high-
frequency flight routes and Rs. 8000 for the rest 20% of flights.

Approach/Assumptions: Calculating the number of users from the data of number of domestic air
passengers. Also making comparisons of what market had in MakeMyTrip had in pre-covid and then
predicting post-covid data, and only the market for online channels airway bookings have been
considered.

Flight Booking

2019 2021 (expected)

Domestic air passengers (Lakhs) 1440.17 1215.503
Passengers in age group 20-45 1080.128 911.6276
(n)Online users who use Deal apps 756.0893 820.4648
80% of users booking Rs3500 price, p=7.5% 158778.7 172297.6
20% of users booking Rs8000 price, p=10% 120974.3 131274.4
(n*p')Rupees in crores 2797.53 3035.72
p=Commission% MakeMyTrip Gets on a booking, q=1

(Formula used for market potential = n*p*q)

We see from the above table that the market potential for Make My Trip is Rs. 3035.72 crores (if it
somehow onboards 820 Lakhs/82 Million users only for airway booking)

We can also estimate for other services similarly, even though largest revenue stream is domestic air
booking, but the hotel and bus products also have high market potential. But there is much more
competition in other services and given that in airway bookings make my trip has 47% Market Share
and is a market leader followed by Yatra and ClearTrip, we can calculate the broad estimate of the
market demand for Make My Trip, may be considered as about 47 % of Rs. 3035 crores (from above)
as Rs. 1426 crores approximately.

Looking into a large number of populations of online users (supported by internet users data about
726 Million as per TRAI website) and one of the lowest tariffs for accessing the internet) a very high
market for travel related bookings with a lot of business potential. MakeMyTrip succeeded in
addressing this demand by building the most popular aggregator with the capacity to allow millions
of Indians to see, compare and book the best one out of all the companies (AirIndia, SpiceJet) at one
place. The combo offers of giving access to hotel packages further increases the usage context of
MakeMyTrip, although the key USP remains the air bookings.

References:

https://www.trai.gov.in/sites/default/files/QPIR_21012021_0.pdf

www.statista.com

www.mospi.nic.in , https://www.dgca.gov.in/digigov-portal/?page=4264/4206/sericename