The Innovation Station

(A.3) Original iSearch 

 

Week 5 - Virgin Galactic

* Date of publication: 26th October 2011

* Sources: o http://www.virgingalactic.com/overview/ o http://science.time.com/2013/09/25/virgin-galactic-the-hour-is-nigh-for-tourists-in-space/ o http://www.ausbt.com.au/richard-branson-commercial-virgin-galactic-spaceflights-in-2014 o https://plus.google.com/+VirginGalactic/posts (Social Media reports about "oldest person ever to fly in space." o http://skift.com/2013/10/31/virgin-galactics-u-s-spaceport-needs-state-money-to-make-ends-meet/ ("Virgin Galactic has again pushed back its estimated start date due to lack of budget.2) o http://www.bbc.co.uk/news/technology-15460935

* What companies are involved?

o Virgin

o White Knight Two (special aeroplane that functions as the mother ship and launch-platform for the spacecraft SpaceShipTwo. Mother ship is a large fixed-wing aircraft with two hulls linked together by a central wing.)

What does it do?

Virgin Galactic is an innovation developed by Virgin and is innovation that Virgin have added to their ‘eco-system’ of products and services. This innovation offers consumers the chance to travel to the edge of space and experience approximately six minutes of weightlessness. The total time of travel is 2.5 hours and with only six passengers and two pilots, the Virgin Galactic are offering an extremely unique and intimate experience, which is reflected in the £250,000 price tag. Although it is not available on the market as of yet, Virgin are proposing that the experience will be underway during 2014. This innovation has been in the pipeline since 2004 and the past ten years have been spent developing the technologies and undergoing test flights to ensure that consumer safety is paramount.

In terms of theory, it is clear that Virgin galactic are the first movers within this market, which has created advantages, but may also pose some disadvantages for the company. With regards to the advantages of being a ‘first mover’, Virgin have further added value to its brand, something that is expensive for late entrants to break. With the innovation being developed over several years, Virgin have been able to accrue valuable knowledge of the market through extensive R&D, thus enabling them to have a vast understanding of this field as well as creating valuable relationships with those who have knowledge with regards to space and travel; something that is difficult for competitors to imitate. They will also be able to undertake market research allowing Virgin to best understand what consumers want enabling them to continually improve their service offering. Although being a first mover has its advantages, we have also identified that this also can create disadvantages. For example, as Virgin Galactic has not entered the market yet, they have no real certainty as to whether the innovation will be a success and mistakes

may be made due to this uncertainty. Furthermore, due to the high expenditure on R&D, if the innovation does not ‘take off’, then this will ultimately determine the failure of the business and may allow cheaper competitors offering a similar experience to enter the market and become a success.

It is difficult to comment on the diffusion of innovation as Virgin Galactic is not yet available; however, they have allowed people to sign up for the experience ready for when it is available. People who have signed up include A list celebrities such as Rhianna and Leonardo Di Caprio. These people can be seen as the ‘early adopters’ as well as the ‘connectors’ who may help with the notion of ‘The Tipping pint’ as they are people within the community who know a lot of people. We have identified Richard Branson as a ‘Salesman’; he is the face of Virgin Galactic and part of his marketing campaign is to invite people to join him on this adventure into space. We think that due to the high price of £250,000, Virgin Galactic have restricted the diffusion and adoption of this innovation as it is targeted at a specific niche market, one where you must have a high level of disposable income. With this being the case, we believe that it is vital that the price must be reduced in order for this innovation to be appealing to the early majority. One way for this type of innovation to be appealing and beneficial to the early majority would be to introduce fast travel, e.g. London to New York in two hours; as a group, we think that this will be the way for this type of innovation to diffuse.