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The Space Review: Scenario planning for suborbital

Published by Sigurd De Keyser on Mon Jul 19, 2004 1:13 pm
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chabot imageScenario planning can help form contingency plans for suborbital companies to thrive whatever the market conditions are. Scenario planning was made popular by Royal Dutch Shell in the 1970s. Shell considered what would happen in the event of a big drop in world oil reserves. It was the only company ready for the huge oil price shock after the Yom Kippur war. Shell has lost its credibility these days because it lied about its oil reserves. Ironic that Shell went from the top of its game to attempting a shell game in one generation. Scenario planning may offer today’s struggling suborbital executives the boost they need now to have a multi-billion dollar scandal three decades hence.

The meat of scenario planning is comprised of three steps: identifying the critical uncertainties, composing scenarios, and analyzing business decision under the different scenarios.

There is substantial uncertainty in the suborbital industry, but much of the uncertainty may not be critical. Regulatory uncertainty may be cabined by the prospect of new language enabling a successful vote in favor of the Senate version of HR 3752 to coincide with SpaceShipOne’s anticipated Ansari X Prize flight in September. Technical risks appear to be manageable. The drum has been beating for a long time on the risks of suborbital, so having a death on an early flight might not be the industry’s biggest risk. The biggest remaining uncertainty may be the level of demand; the critical uncertainty that remains is whether suborbital is going to be a huge market, or a tiny market. Read More

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