BUSINESS STRATEGY

 

Five Forces of SpaceX

Bargaining Power of Suppliers: Because SpaceX is unusual in having its own production site to develop new technologies and manufacturing systems, the bargaining power of suppliers is deemed to be minimal (low) when evaluating the expanding business operations of the organization. There is limited margin for anyone in the chain to adjust costs or gain much of an advantage over one another in this horizontally linked supply chain of expensive products. This is the main cause of the industry's low supplier power, but there are other factors as well, including the fact that just a few major space organizations make higher volume demands for the high-tech components required by companies like NASA.

Bargaining Power of Buyers: The bargaining power of buyers is considered at a high level. The expanded availability of options is the primary cause of the market's increased buyer power. Customers of NASA have more options than ever, including commercial companies looking to purchase satellites, launch services, and other technical services, such as T-Mobile.

Threat of New Entrants: The threat of new entrants is faced at low level as a successful manufacturing process, launch campaign, or any other aspect of the space industry comes with a colossal financial investment demand up to $500 million year on operations only to keep facilities in good working order and to cover the expense of building new assets.

Threat of Substitute Products or Services: The threat of substitute products or services is medium, especially in a sector as huge as aerospace, is now greater than ever due to the development of new strategies to combat the duties that the organization has historically attempted to combat.

Rivalry Among Existing Competitors: The rivalry among existing competitors is low. It should be mentioned that the use of collaboration is now more prevalent than it has ever been, and this is significantly reducing the conflict between industry firms. However, there are huge hurdles to leaving the business, which heightens rivalry. These barriers are a result of the enormous capital requirements and high fixed expenses connected with the companies that lower the competition.