Elon Musk has developed rockets that can be used more than once in space, therefore, reusable rockets that are less costly. Most of SpaceX’s funding had come from Musk’s personal savings, and SpaceX and Musk’s other major ventures, not from government contracts or funding. Later on, Musk had initiated a corporate-level strategy where it had developed a lower cost method for rocket launch and offered different rocket production options, meaning increased diversification for its rockets.
Concepts like manufacturing a business’s own supplies and products in order to be cost efficient was applied in the SpaceX case. For instance, SpaceX has produced 80% of its launch hardware unlike other aerospace companies that charged higher prices for rockets due to its extra cost production with its third-party hardware manufacturers and suppliers. SpaceX has developed all its products from scratch with its own resources and engineering solutions. SpaceX reversed innovation and brought back value to simple consumer electronics that can be easily purchased. SpaceX was lacking funds so it used available consumer electronics that were cheaper to build the company’s rocket components.
SpaceX’s new methods of developing alternative technologies and designs with its engineers has affected the aerospace industry particularly suppliers that produced products for aerospace companies, causing them to lower their prices. Aerospace companies had also lost their financial positions in the market as NASA was able to have SpaceX on its side as an alternative in terms of having advanced protocols in worst case circumstances within the space while not being a huge financial loss for SpaceX as well.
Later on, SpaceX realized that vertical integration allows it to exercise more control over its operations and management, meaning all engineers were on track in designing, testing, and improving launch systems together in the same environment. SpaceX has a faster repair response time than NASA because it has its own test site, giving SpaceX a great advantage in maintaining its market position and improving any faults sooner before any rivals enter the market and develop a faster improved rocket than SpaceX. Other aerospace companies use government test sites for their products which takes months and several paperwork before approval.
Due to SpaceX’s faster production and repair time, it can make twenty rockets per year compared to its rivals. SpaceX’s unique feature and reverse thrusters and other installations help the rockets to safely return back to the ground so they can be reused. When a rocket can be reused, the company saves production time and cost, meaning the rocket can go on several trials to space without having to wait for the next rocket launch. SpaceX has a global competitive advantage in developing the rocket in a much cheaper way than any other company overseas.
