The Future & Recommendations

The website has effectively exemplified the strengths and weaknesses of Virgin Galactic as an innovation. Virgin galactic are the first movers within this market, which as highlighted previously brings with it both advantages and disadvantages. Virgin have been able to further add value to its existing brand, and their continued strength and performance is something that new entrants may find difficult and expensive to compete with. It is this status that has allowed Virgin to accrue valuable knowledge of the market through extensive R&D, thus acquiring a vast understanding of this new, untouched field.

Their business prowess has also undoubtedly benefited them when establishing valuable relationships with those who have knowledge with regards to space and travel. This again may be difficult for competitors to imitate. Virgin's early movement has also allowed them to conduct thorough market research into consumers needs which although a positive can prove useful to competitors who do not have to spend extensively on research. Competitors may also be able to imitate technology used by Virgin without spending heavily on R&D.

As this is a new market, with no past experience, Virgin could find themselves being a guinea pig from which late movers can learn from their mistakes. This is something that Virgin will have to safeguard and be wary of in the future.

As a technology innovation we believe this is revolutionary and not only has the ability to offer a new experience to thrill seekers, but could revolutionize the travel industry. By integrating this technology into global flights, times could be reduced dramatically and this has already been discussed by Virgin who believe they could get from London to New York in 2 and a half hours, a dramatic decrease from current times.

We also believe 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. It is dependent upon Virgin how fast they want Virgin Galactic to diffuse. As mentioned previously utilizing the technology for transatlantic travel could be the easiest way to diffuse their innovation as this would be acceptably and more reasonably affordable than their space flights. It would also prevent Virgin having to devalue and reduce the rarity of their Virgin Galactic experience, continuing it as a one off, special opportunity to see space.

In order to further support our analysis of the future for Virgin Galactic, an effective tool is Porters' 5 Forces (1980). This looks at the 5 areas Virgin Galactic will have to sustain from a strategic viewpoint in order to maintain their current status as the worlds first commercialized space travel providers. Below is our analysis of these key areas:

Industry Competitiveness

At present Virgin are the most advanced, and most known provider in the race to commercialize space travel. This has resulted in forecasts of monopolistic share of the Space Travel industry.

One way which Virgin may try to develop their stranglehold on the market is by using their technology in transatlantic flights through their Virgin Atlantic segment of the Virgin Eco-system.

By integrating this technology to offer a quicker and more efficient mode of flight transport to consumers they could potentially showcase the experience on flights and attract a whole new market of "space speed travel" clients wanting to travel the globe faster than ever.

Threat of Substitute Products

As touched upon previously, although not directly competitive thus far consumers may soon have other options on how they want to view space. Competitors such as World View, space adventures and RocketPlances may damage Virgins market share in the future.

The only way for Virgin to tackle this is by ensuring their service is the pinnacle. This will be undoubtedly boosted by the glamorous appeal of rich superstars partaking in the experience, which undoubtedly adds to the appeal. By ensuring they offer the premium service Virgin are likely to maintain the attraction of the super rich, whereas competitors such as world view and Space Adventures may find themselves more directly competing for consumers with less to spend.

Bargaining Power of Customers

At present, the bargaining power of consumers is very slim as Virgin are the only ones providing this niche service. This has allowed Virgin to place a $250,000 price tag on the experience. As competitors arise however, Virgin may find their customers choosing cheaper alternatives.

In order to maintain their customer base and attract new ones they may need to look at reducing the price. This could however make the experience less special as it may not really seem a one off chance if the masses are able to partake so easily. This question of quantity versus quality is something Virgin may be forced to question in the future.

Threat of New Entrants

Studies have suggested that late movers can imitate their competitors at a cost of 65% of what the initial first movers had invested. (Johnson, Scholes & Whittington, 2008). This means that a competitor may be able to undercut Virgin Galactic and pay a fraction of their original start up costs. This perhaps opens the possibility of new entrants to the market. Despite this the high start up costs and vast array of legislations that must be adhered to mean that this is still a niche market with many barriers to entry. This is aptly represented by RocketPlanes lack of impact on the industry when compared to Virgin Galactic.

Bargaining Power of Suppliers

As Virgin Galactic is a joint venture, there is an argument that the suppliers could hold Virgin to ransom, and perhaps lease space travel technology to competitors. Despite this the publicity Burt Rutan has gained from Virgin and their prowess as a brand means that this is an unlikely instance.

In order for Virgin Galactic to sustain itself going forward it must ensure that strong ties are established between the connected parties and that stakeholder interest is met and kept.

One threat could be with the specific and unique fuel needed to power the SpaceShipTwo, and Virgin may find themselves paying heavily for this niche product.