This report conducts an initial Industry Structural Analysis (ISA) based on the framework developed by Dr. MichaelPorter of Harvard Business School and detailed in his "Competitive Strategy" text. The ISA frameworkcharacterizes the profitability of an industry being dependent on the strength and sources of five predominant forces:(1) the threat of entry by potential entrants, (2) the intensity of rivalry among existing competitors, (3) the pressurefrom substitute products, (4) the bargaining power of suppliers, and (5) the bargaining power of buyers. The threatof entry by potential entrants is dominated by seven barriers of entry categories: (ⅰ) economies of scale, (ⅱ) productdifferentiation, (ⅲ) capital requirements, (ⅳ) switching costs, (ⅴ) access to distribution channels, (ⅵ) costdisadvantages independent of scale, and (ⅶ) government policy. This analysis intentionally avoids identification ofspecific firms or detailed proprietary data within the commercial suborbital research market with the intent ofavoiding financial or political sensitivities that may be held by members of the industry. An analysis of this nature isnot intended to be "the final word" but a starting point for a discussion by interested members of the industry using awell-defined, baseline structure and vocabulary to facilitate a better understanding and comprehension of theanalysis' observations.
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