Successful Market Entry in the European Commercial Space Industry
Total Page：16
File Type：pdf, Size：1020Kb
DELFT UNIVERSITY OF TECHNOLOGY Successful market entry in the European commercial space industry by Kirsten Drost December 2017 Graduation committee: Dr.ing. V.E. (Victor) Scholten Dr.ir. G.A. (Mark) de Reuver Prof.dr. C.P. (Cees) van Beers Management of Technology Faculty of Technology, Policy and Management Delft University of Technology Acknowledgements Special thanks goes to my supervisor Dr.ing. V.E. (Victor) Scholten and to my supervisor of the master thesis preparation course Dr.ir. G.A. (Mark) de Reuver. I would like to thank all the interviewee's for their time, valuable response and enthusiasm. Furthermore, I would like to thank J. Rotteveel for his effort and time in helping me to define the research question, the scope of the problem, identifying the research sample and subsequently introducing me to the companies in the research sample. Finally, I would like to thank my examination committee: Dr.ing. V.E. (Victor) Scholten, Dr.ir. G.A. (Mark) de Reuver and Prof.dr. C.P. (Cees) van Beers. i Contents Acknowledgementsi List of Figures iv List of Tables vii 1 Management Summary1 2 Introduction 4 2.1 General introduction..................................4 2.2 Problem definition...................................5 2.3 The conceptual model.................................7 2.4 Research objective & questions............................ 11 2.5 Research approach & design.............................. 12 2.6 Practical & scientific relevance............................ 13 2.7 Thesis outline...................................... 14 3 The space industry 15 3.1 Literature review method............................... 15 3.2 The context of the space industry........................... 15 3.3 The actors in the space economy........................... 20 3.4 The space manufacturing industry.......................... 22 3.5 New space........................................ 26 3.6 The policy framework................................. 34 3.7 Entry barriers in the space industry......................... 38 3.8 Conclusion....................................... 39 4 Literature review 41 4.1 Innovation........................................ 41 4.2 Business models.................................... 42 4.3 Market entry strategy................................. 48 4.4 Conclusion....................................... 50 5 Methodology 52 5.1 Research approach & Design............................. 52 5.2 Data collection and analysis.............................. 54 5.3 Analysis theoretical framework............................ 55 5.4 Research quality.................................... 57 ii CONTENTS iii 6 Results 59 6.1 Description of the cases................................ 59 6.2 Identified problems in the Dutch space sector.................... 81 6.3 Cross case analysis................................... 84 7 Discussion & Conclusion 91 7.1 Discussion........................................ 91 7.2 Theoretical implications................................ 99 7.3 Practical implications................................. 102 7.4 Conclusion....................................... 102 7.5 Limitations....................................... 104 7.6 Future research..................................... 105 A Interview questions 106 Bibliography 108 List of Figures 2.1 Problem definition: The goal is to have an autonomous access to space which can be achieved by having a competitive space industry. Autonomous access to space results in three substantial advantages for Europe: Global competitiveness, Achieving key political priorities and the safety of citizens.............6 2.2 Approach: Stimulate the uptake of new entrants in order to trigger disruptive in- novation which leads to new value propositions, new customers, new applications of space technology and industry growth. Finally contributing to maintaining a competitive European space industry.........................7 2.3 The conceptual model................................. 11 3.1 The European space manufacturing industry sales and employment over time (ASD Eurospace, 2017b)................................ 23 3.2 The European space manufacturing industry sales per main customer segment over time (ASD Eurospace, 2017b).......................... 24 3.3 Details of public and private procuring entities in the European space manu- facturing industry in 2016. Commercial market representing European private procuring entities and export sales (being also public entities outside of Europe) (ASD Eurospace, 2017a)................................ 25 3.4 The eight verticals of new space according to NSG(NewSpace Global, 2015)... 32 3.5 The mix of types of investment in space companies varies over 2000 to 2015. Image from (The Tauri Group, 2016)......................... 34 3.6 By number of investors, VCs are the largest investor group for space start-ups. Image from (The Tauri Group, 2016)......................... 34 3.7 The finance gap explained by the different facets of investing in new space. Image from (Sadlier, 2014).................................. 35 4.1 Different types of entry modes from internationalization theory. Figure from (van der Lippe, 2014)................................. 50 5.1 The business model canvas for company A...................... 55 iv LIST OF FIGURES v 6.1 This figure shows that Company A is able to perform activities on all levels of the space value chain. They even offer products or services on all levels of the space value chain. They manufacture space hardware and sell components or complete systems, they launch space hardware which is a shared activity that they perform with a partner, they operate the space hardware and sell operating equipment, they manufacture, operate and sell ground equipment, they are able to construct databases as a value added service and are even capable of providing services based on space data which are ready for use to consumers. Company A is not positioned somewhere in the space value chain but covers all levels of the space value chain..................................... 61 6.2 The business model canvas for company A...................... 62 6.3 This figure shows that Company B is able to perform activities on all levels of the space value chain. They however only offer services based on space data directly to the consumers. In order to realize their service, company B must also perform activities on higher levels of the space value chain. Company B is a system integrator so the manufacturing of components (also ground equipment) is done by a partner, a partner also takes care of launching, but company B operates their hardware themselves and processes the data into a value added service which they offer as their final product. Company B is not positioned somewhere in the space value chain but covers all levels of the space value chain 65 6.4 The business model canvas for company B...................... 66 6.5 This figure shows that Company C is able to perform activities on almost all levels of the space value chain. Their final product is a database ready to use for research. Company C manufactures space hardware and ground equipment and sells complete systems, they launch space hardware themselves, operate the space hardware and deliver a database as a value added service. Company C is not positioned somewhere in the space value chain but covers almost all levels of the space value chain.................................. 68 6.6 The business model canvas for company C...................... 69 6.7 This figure shows that Company D is able to perform activities on almost all levels of the space value chain. Company D is a system integrator so the manu- facturing of components (also ground equipment) is done by a partner, a partner also takes care of launching, but company B operates their hardware themselves and processes the data into a value added service which they offer as their final product. Company B is not positioned somewhere in the space value chain but covers almost all levels of the space value chain.................... 72 6.8 The business model canvas for company D...................... 73 6.9 This figure shows that Company E is able to perform activities on various levels of the space value chain. However, before company E can execute this model, they first have to build the complete value chain. Thus although it looks like the activities of company E stop after operating the space hardware, they have to be able to perform activities on all levels of the space value chain in order to be able to build it. Company E is not positioned somewhere in the space value chain but covers almost all levels of the space value chain.................... 76 6.10 The business model canvas for company E...................... 77 LIST OF FIGURES vi 6.11 This figure shows that Company F is able to perform activities on all levels of the space value chain. Company F manufactures their hardware together with a partner, the partner takes care of launching and operating the space hardware but company F manufactures and controls the ground equipment. The final product of company F is a service based on space data which is ready for use to consumers. Company F is not positioned somewhere in the space value chain but covers all levels of the space value chain............................. 79 6.12 The business model canvas for company F...................... 80 7.1 The process of market entry is described as matching different configurations of market entry strategy, business model with the market factors. The business model and market entry strategy can be changed and the