STRATEGIC TECHNOLOGY ROADMAP:

SPACE EXPLORATION TECHNOLOGIES CORPORATION

ANDERS HANSEN | ANNA-MARIA CRNJAK | BENJAMIN TEE | RICHARD AVENARIUS

PREPARED FOR: DR CHARLES WEBER

11 DECEMBER 2013

INTRODUCTION

Longtime interest in space

Mission to MARS

Developed strategic
partnership with NASA

Heavily invested in aerospace

technology R&D instead of
purchasing Russian ICBMs.

QUICK FACTS ABOUT SPACE X:

FOUNDED

VEHICLES

MANIFEST

EMPLOYEES

2002

40+

3,000+

THE LAUNCH INDUSTRY

HISTORICAL OVERVIEW
COMMERCIAL AEROSPACE INDUSTRY

2000 Present

Military
Civil
Commercial

)
Mobile
Telecommunications
Geographic Positioning
Systems (GPS)

1990s

1980s

Television Broadcasting
US government national
space policy

INDUSTRY OVERVIEW
SEGMENTATION AND BREAKDOWN
SPACE
SERVICES
2012 Global
Revenue:

SATELLITE
MANUFACTURING

GROUND
EQUIPMENT

LAUNCH
SERVICES

2012 Global
Revenue:

$54,8b

2012 Global
Revenue:
$6,5b

$190b

2012 Global
Revenue:
$14,6b

Largest segment.
Consumer Services
= biggest driver of
growth

U.S. market
share 60% of
global market

Consumer &
Network
equipment

U.S. market
share = 35% of
global market

7% growth
rate from
2011-2012

23% growth
rate from
2011-2012

4% growth
rate from
2011-2012

35% growth
rate from
2011-2012

PORTERS FIVE FORCES ANALYSIS

LAUNCH INDUSTRY
Competitive Rivalry
Medium: Several large big
players in the industry

Threat of Entrants

Supplier Power
Medium: Specialized
Manufacturers of parts

Buyer Power
Medium:
Price sensitive, Reliability
sensitive customers

Low: High barriers to

entry

Threat of Substitutes
Low: Specialized product,
High Technology

Conclusion: Presence of large, established competitors due to

barriers to entry. Price and reliability are key factors!

DEVELOPMENTS WITHIN THE LAUNCH INDUSTRY

FROM PUBLIC TO PRIVATE
PUBLIC SECTOR

PRIVATE SECTOR

The Space Act

Major Cost Savings

SpaceX was able to
launch a vehicle into
space for 1/3 the cost of
NASA.

Increased national

Agreements
Allows for increase in
innovation and
development of
aerospace tech.

Allows efficiency in
corporate business &
scientific research
Rapid development in
monetization of revenue

sovereignty
U.S. Russia relationship
[]

COMPANY HIGHLIGHTS

MISSION AND LONG TERM VISION - SPACEX

Mission:
To develop space transportations, with the
ultimate goal of making it possible for
humans to live on other planets

Future Vision:
Give costumers lower prices and faster
launch tempo
Creating reusable aircrafts for space travel
Continuing to apply innovative ideas and
ground-breaking research

SWOT ANALYSIS - SPACEX

Strengths:
Low cost, high reliability business model
In-house manufacturing of rockets
Innovation philosophy
Young & talented workforce & CEO
Able to provide services internationally
)
Pioneer in development of reusable rockets
Free from political influence
Weaknesses:
New entrant in complex & competitive
business environment
Limited funding as a privately company

SWOT ANALYSIS - SPACEX

Opportunities:
Falcon Heavy set to be the worlds most
powerful rocket by payload
Reusable Dragon capsule set to be first
private crew spacecraft to visit ISS
Set to be market leader in reusable rockets
)

Threats:
Changes to legal and political environment
Loss of confidence in event of mission
failure
Failure to deliver flight manifest on
schedule

SPACEX RESEARCH
REVOLUTIONIZING THE LAUNCH INDUSTRY

1st commercial rocket

Low-cost alternative to
traditional launch
providers backed by
governments

Launch of SES Satellite

to GEO on 6 December
2013
Example of costreductions: Falcon 9 v
1.1 engine had 75%
more thrust, 60% more
fuel in rocket fuselage
for both first and
second stage

DRAGON
)

FALCON 9
v 1.1

FALCON
HEAVY

First commercially built

and operated spacecraft
that was recovered from
orbit
First commercially built
spacecraft to dock at the
ISS
Designed to carry heavy
interplanetary spacecraft
to space
The worlds most powerful
rocket
Designed for extreme
reliability the commercial
aircraft of space travel
Twice the performance and
1/3 the cost of the Delta IV
Heavy

SPACEX RESEARCH
REVOLUTIONIZING THE LAUNCH INDUSTRY

LAUNCH VEHICLE

FALCON
HEAVY

SPACE
SHUTTLE

PROTON
M

PAYLOAD TO LEO

53,000 kg

24,000 kg

23,000 kg

DELTA IV
HEAVY
)22,560

kg

Estimated Launch Date:

JULY 2014
2012 US Air Force Cost per
launch:

USD $435 million

Cost of the Falcon Heavy:

USD $125 million

FALCON
HEAVY

TITAN IV
B

ARIANE 5
ES

JAPAN HII B

CHINA
LM 3B

21,680 kg

20,000 kg

16,500 kg

11,200 kg

Designed to carry heavy

interplanetary spacecraft
to space
The worlds most powerful
rocket
Designed for extreme
reliability the commercial
aircraft of space travel
Twice the performance and
1/3 the cost of the Delta IV
Heavy

STRATEGIC ANALYSIS

INTERNAL ANALYSIS OPERATING MODEL

Flat
Organization
Structure

Culture of
Innovation

Vertically
Integrated
Production

Simplicity
Low Cost
Reliability

Leading
Edge
Design

Competition
in multiple
markets

LEVERAGING ON A FLAT ORGANIZATIONAL

STRUCTURE FOR SUCCESS

Silicon Valley Tech Firm

Flat organizational structure

)

Large multinational firm, 24

shareholders from 10 countries

Open office design and culture

Separate design and production

Young and talented workforce

Successful CEO in Elon Musk

Joint decision making under

authority of European Space
Agency

Corporate structure supports

collaboration and efficient
decision making

Bureaucracy and government

ownership hampers decision
making and innovation

LEADING EDGE DESIGN AND COST INNOVATION

Simple and proven rocket design allows for reliability and up to 70%
cost improvement for customers

ARIANE 5

PROTON M

LONG MARCH 3B

FALCON 9

ARIANESPACE

ILS (Russia)

CHINA

SPACEX

PRICE

$US 220M

$US 85M

$US 70M

$US 54M

PAYLOAD to GEO

10,500 kg

5,500 kg

4,491 kg

4,540 kg

US$ 20,952

US$ 15,545

US$ 15,586

US$ 11,894

VEHICLE NAME
MANUFACTURER

COST per KG

VERTICALLY INTEGRATED PRODUCTION

Arianespace has multiple
contractors:

SpaceX manufactures all their

parts in-house:

Eliminates subcontractors

Rockets made in Europe

Reduced cost & better quality

Prime contractor: Astrium Europe

Tighter feedback loop between

design and production

Delivers rockets for launch in

French Guiana in S.A

Development time reduced (85%)

Increased transportation cost

COMPETITION ACROSS MULTIPLE MARKETS

Competes for
Government
Contracts

Lightweight
Sub-Orbital
Market

Economies of Scale through

high launch activity!

Commercial
LEO Orbit
Market

Ability to go to
GTO and
beyond
Falcon
Heavy

Falcon
9
)

Falcon 1

Dragon

Continuous pursuit of cost

improvements across all
markets!

CULTURE OF INNOVATION & IMPROVEMENT

Developing
Worlds First
Reusable
Rockets

Reusable
Dragon
Cargo
capsule

Worlds Most
Powerful
Rocket by
Payload

Highest
structural
safety
margins for
human flight

STRATEGIC ROADMAP
Resources

Distinctive
Competencies

Low Cost Falcon 9

Rocket
Rocket Landing
Technology
Reusable Dragon
Cargo Capsule
Young, Talented
Engineers

Capabilities
In-House
Manufacturing
Short Design to Build
Time Period

Lowest cost per

payload to LEO and
GEO

Regular resupply
missions to the ISS
Worlds most powerful
rocket - Ability to
launch >53,000 kg to
LEO

Sustained Value
Creation
Market leader for light
commercial
launch
How do you
marketdeliver
consistently

superior value to
Development
customers?of
reusable rockets for
all deployments
Market leader for US
How
do you build
government launch
intangible assets
contracts

and prevent
duplication by
Pioneer
in expeditions
competitors?
to Mars and beyond

RECOMMENDATIONS & FUTURE

DIRECTION

PRESENT CHALLENGES AND COMPETITION

DELIVERING SUSTAINABLE VALUE CREATION
CHALLENGE 1:

CHALLENGE 2:

CHALLENGE 3:

CHALLENGE 4:

Establishing

Ramping up

Maintaining

Successful

credibility as the

production to

resource position

development of

new kid on the

meet market

barriers against

reusable launch

block

demand

competition

rocket system

CREDITS: STEVE@GREENBERGART.COM

RECOMMENDATIONS
LEVERAGING ON DISTINCTIVE COMPETENCIES FOR GROWTH
Develop and retain key talent
and personnel
Continued
pursuit of
Cost
Innovation
Dominate lightweight
launch segment
Enhance production
capabilities (x2)

Develop &
Build
Credibility

Economies of Scale with

launch activity
Increase number of launch
sites in US

Establish market
leadership in
development of
reusable rockets
and deep space
exploration
capabilities

Grasshopper Project
Crew Ready Dragon
Capsule
Use of Falcon Heavy for
Mars Exploration Project

END OF PRESENTATION
THANK YOU!

APPENDIX: 2012 SATELLITE INDUSTRY

INDICATORS SUMMARY

SOURCE: Satellite Industry Association Annual Report 2013

APPENDIX: TOP LEVEL GLOBAL SATELLITE

INDUSTRY FINDINGS

SOURCE: Satellite Industry Association Annual Report 2013

APPENDIX: SATELLITE AND COMMERCIAL

LAUNCH DEMAND FORECAST TO 2022

Demand for satellite

launches set to pick up
in the near term

Trend toward heavier,

more capable satellites
(50% in heaviest mass class)

Ability to deliver dual

manifests an
advantage

SOURCE: FAA 2013 Commercial Space Transportation Forecasts

APPENDIX: NASA COMMERCIAL CARGO AND

CREW PROGRAM GOVT SPACE CONTRACTS
Commercial Orbital
Transportation Services (COTS)

Commercial Crew Program

(CCP)

Developed since 2006

Developed since 2008

NASA helping US companies

to develop and demonstrate
cargo space transportation
capabilities

To develop and advance US

capabilities in crew
transportation designs

Competition opened to private

sector for safety and cost
effectiveness

Key Competitors: (milestones)

SPACE X has completed

ALL COTS milestones in
May 2012
Only competitor: Orbital
Sciences Corporation
(completed all COTS
milestones in Sept 2013)

Boeing (8 out of 19)

Sierra Nevada (5 out of 9)

Space X (6 out of 14)

SOURCE: NASA Cargo and Crew Update NAC HEO Meeting July 2013

APPENDIX: SPACE X COMPLETED MISSIONS

Mainly test flights and

government contracts

First commercial launch

for SES (Europe) in Dec
2013
USD$ 1.6 billion contract
to resupply ISS

SOURCE: SPACEX LAUNCH MANIFEST WEBSITE (C.A.A Dec 2013)

APPENDIX: SPACE X LAUNCH MANIFEST

14 Launches planned in
2014, another 14 in 2015
Value of launch contracts
worth up to $40 billion
*

About 60% of these

contracts are from the
commercial space

SOURCE: SPACEX LAUNCH MANIFEST WEBSITE (C.A.A Dec 2013)

APPENDIX: SPACE X LAUNCH AND

MANUFACTURING FACILITIES (1)
SPACE LAUNCH COMPLEX 40 CAPE
CANAVERNAL AIR FORCE STATION
Cape Canaveral, FL

Bought facility since 2007

Successfully launched the Falcon 9

in 2010 at SLC-40

SPACEX HEADQUARTERS & MISSION

CONTROL
Hawthorne, CA

Design and manufacture of engines

and rocket bodies

Floor plan designed around mass

production to achieve pace of 40
core engines annually

Home of Mission Control since 2002

SOURCE: Space X COTS Mission Update (July 2013)

APPENDIX: SPACE X LAUNCH AND

MANUFACTURING FACILITIES (2)
SPACEX ROCKET DEVELOPMENT FACILITY
McGregor, TX

Test center for engines and

structures

State-of-the-art rocket
development equipment

SPACEX LAUNCH COMPLEX 4E,

VANDENBERG AIR FORCE BASE
Near Lompoc, CA

Newest launch facility acquired in

early 2012

Designed for heavier launches of

the Falcon Heavy and
Grasshopper projects
SOURCE: Space X COTS Mission Update (July 2013)