Managerial Decision Making – Case Study 1

 “Commercial Space Travel” on page 16.

On October 4, 2004, at nearly 400,000 feet (70 miles)above the Mojave Desert, history and $10 million dollars were made. SpaceShipOne had completed its third required flight to claim the $10 million X Prize. The Ansari X Prize was created to jump-start interest in commercial space travel and was similar to the hundreds of aviation incentive prizes created in the early 20thcentury to help develop today’s $300 billion commercial aviation industry. The X prize achieved its goal with 26teams from seven countries spending over $100 million to make commercial space travel a future reality. Onceinconceivable for non-governmental agencies, there are now several for-profit companies looking to enter the space-travel market. Sir Richard Branson created a new company, Virgin Galactic, and has ordered five spaceships from the creators of SpaceShipOne.Branson’s ships will be larger, holding five passengers and one pilot. Virgin Galactic has already had 5,000people make serious inquiries about tickets, which are currently running at $190,000 apiece. Another company, Space Adventures, is selling space-travel tickets for less than $100,000 and has advanced deposits of $10,000 from 100 customers. Not only didSpaceShipOne make history in being the first non-governmental group to launch people into space, but it may also have made history by launching a new industry. Only time will tell!

Questions 1. Clearly, there are potentially great risks associated with being blasted into space and then gliding back to earth. Many systems must work almost flawlessly for day-in and day-out space travel. This is rocket science after all. From your perspective, would you be an early adopter and want to be one of the first to fly into space? Or would you wait until the industry was more mature? What factors would you include when thinking about commercial space travel?

Questions 2. The economics of space travel raises some interesting questions. These space-travel entrepreneurs believe that they can control costs better than governmental organizations. By being smaller and leaner, they can react quickly to changes in the marketplace. PeterDiamandis, the organizer of the X Prize, summed up this sentiment by stating that these entrepreneurs were the“furry mammal(s)among the dinosaurs of the aerospace industry.”Do you agree with this thinking, or do you believe that for-profit companies might cut corners to keep costs down and thereby be riskier?

Note:
1. Your Case Study should be 2 – 3 pages in length and written in APA style format.
2. Separate title and reference page (minimum of 2 references)
3. Double spaced with 12-point Times Roman font.