Date of Award


Document Type


Degree Name

Master of Business



First Advisor

Jack Kirk

Second Advisor

Clark Compton


As the United States only launch vehicle program NASA'~ Space Shuttle forced the shutdown of conventional launch vehicle operations . A system whose profitability depended on frequent use, but which, instead , incurred numerous launch delays, the Shuttle soon could not cover the cost of itself much less turn an profit. The French Ariane, albeit a simpler launch vehicle, soon successfully competed with the Shuttle for payloads.

The Reagan Administration, by various supportive measures, encouraged the market entrance of commercial launch firms . The Shuttle and Ariane, however, subsidized by their respective governments , set prices so artificially low that no large commercial launch vehicle company (e.g. McDonnell Douglas, General Dynamics) could hope to survive if they entered the market.

Nonetheless, in the early 1980's several entrepreneurs started small launch firms with the hope of placing small payloads into orbit at a cheaper price than the Shuttle could . The handful of these companies in existence today hope to be operational by the end of the decade. The grounding of the Shuttle fleet after the Challenger accident and the Ariane's technical difficulties may provide a valuable market opportunity for large and small commercial launch vehicles.

This study is a three part analysis to determine if the future market environment will allow a small launch firm to establish itself and capture a sector of that market . The primary thrust o f chis analysis addresses the market all launch vehicles serve: the satellites that require access to space in order to generate revenue . First, an analysis of the satellite population over the past ten years was conducted to determine trends in satellite use. Characteristics of satellites such as their categories, and their weights which are critical to small launchers were addressed in order to define a target market segment and to establish its growth based on the historical data. Next, an analysis of forecast satellite and launch vehicle use provided another basis to determine the need for small launchers. Satellites projected for the next ten years were associated with the most probable launcher that would be available at the time the satellite is scheduled to be orbited . This forecast supported the initial trend analysis . These projections are subject to a great deal of uncertainty because of the dynamic nature of the s pace business environment following the Challenger accident. Issues affecting the market forecast were addressed and include the Administration's future launch vehicle policy , the possibility of a replacement Shuttle , the final US space station configuration, the threat of foreign launch competition, the revival of expendable launchers and the demand for communication satellites. The likely course of action associated with each issue was determined and its impact was assessed against the projected trends and forecast . This information provided the most accurate forecast and was used in conjunction with representative data from several small launch firms to determine their profitability.

The study established that a small launch firm could not profitably operate without a significant investment of additional capital to upgrade its capabilities to a point where it could orbit moderate sized geosynchronous satellites . Currently and for the next eight years there will be on insufficient demand to orbit smaller satellites . Once the space station is deployed in the mid-1990's a change may occur and the need for transferring small payloads to the station may develop.

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Business Commons