The prominent players in the long high-altitude endurance (pseudo) satellite market are Airbus SAS, Lockheed Martin Corporation, Boeing, Northrop Grumman Corporation, Thales Group, Israel Aerospace Industries (IAI Ltd), MAG Aerospace, SZDJI Technology Co. Ltd, AUGUR–RosAeroSystems, Hawkeye Systems Ltd, and AeroVironment.
Competitive Scenario
BCG Matrix
The BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray a firm’s portfolio on a quadrant along relative market share axis (horizontal axis) and speed of market growth axis (vertical axis).
Question Marks
Ventures or start-ups generally start as question marks; for example, AeroVironment Inc. and AUGUR–RosAeroSystems are new companies in this market. Question marks are businesses operating with a low market share in a high growth market. They have the potential to gain market share and develop into stars (market leaders) in the end. Question marks can, therefore, be analyzed carefully to determine whether they are worth the investment required to increase market share.
Stars
Stars are business units with a high market share (potentially market leaders) in a fast-growing industry. Stars generate large amounts of revenue due to their high relative market share but also require significant investments to fight competitors and maintain their growth rate. Airbus SAS, Boeing, and Lockheed Martin Corporation are stars, which ensures future cash flows in the long term.
Cash Cows
Eventually, after years of operating in the industry, market growth might decline and revenues stagnate. At this stage, stars are likely to convert into cash cows. As they still have a relatively large market share in a stagnating market, profits and cash flows are expected to be high. Due to the lower growth rate, investments needed should also be low. Cash cows, therefore, generally create cash in excess of the amount needed to maintain the business.
Dogs
SZDJI Technology Co. Ltd and Hawkeye Systems Ltd, in a slow-growth or declining market with a small relative market share, are considered dogs. These units generally break even (they neither create nor consume a large amount of cash) and generate less capital to maintain market share. These businesses are, therefore, not as interesting for investors. Subsequently, there is still money involved in these business units that could be used in units with more potential; dogs are likely to be divested or liquidated.
Market Share Analysis
The market share analysis is derived by considering various factors such as financial position, segment information, R&D investment, brand value, product portfolio, strategy analysis, and key innovations in the global high-altitude (pseudo) satellite market among other factors. The major players holding prominent positions in the global high-altitude long endurance (pseudo) satellite market are Airbus SAS, Lockheed Martin Corporation, Boeing, and Northrop Grumman Corporation.
According to Wantstats analysis, Airbus SAS is the leading company in the global high-altitude long endurance (pseudo) satellites market, accounting for a 25.30% market share in 2018. Airbus SAS offers innovative technologically advanced pseudo satellites. Recently, the company launched its Zephyr series. Lockheed Martin Corporation accounted for a 20.94% market share. Boeing and Northrop Grumman Corporation occupied 14.91% and 8.21% of the market, respectively, in 2018.
In this competitive environment, the companies are adopting almost all strategies, right from product launches to joint ventures and partnerships to grow and sustain in the market. Their focus is primarily on the implementation of lightweight materials, electronic technologies, and robust systems. The growth of market vendors is dependent on market conditions, government support, and industry development. Thus, the vendors should focus on improving their products and expanding geographically.
Threat of New Entrants
The global high-altitude long endurance (pseudo) satellite market is expected to grow at a considerable rate during the forecast period. However, the capital-intensive nature of the market and the need for advanced technology could deter new players to a certain extent. Moreover, the market already has well-established players such as Airbus SaS, Boeing Company, and Lockheed Martin Corporation with a wide geographic reach. This makes it difficult for new entrants to achieve economies of scale, which the leading players already possess. Therefore, new entrants present a low threat to the major stakeholders in the market.
Bargaining Power of Suppliers
In this market, suppliers include providers of electronic components, software solutions, and other basic components that are subject to stringent regulatory review and need to be certified suitable for civil and military applications. Although supplier concentration in the market is high, due to these factors, there are a limited number of key suppliers in the market. However, the suppliers have an edge over buyers regarding product offering and pricing, resulting in a moderate bargaining power in the market.
Bargaining Power of Buyers
The buyer concentration in the global high-altitude long endurance (pseudo) satellite market is moderate. The buyer concentration is moderate and the buyers include government agencies, private companies, and militaries. They are highly reliant on successful and established manufacturers of pseudo satellites due to the high-end applications and need for reliable equipment and services, which increases switching costs. Hence, the bargaining power of buyers in the global high-altitude long endurance (pseudo) satellite market is projected to be moderate.
Threat of Substitutes
Pseudo satellites are used in applications such as maritime surveillance, border patrol, intelligence, reconnaissance, and environmental surveillance. Presently, there are many substitutes for pseudo satellites such as drones, geostationary satellites, and polar orbiting satellites, which is restraining the growth of the market. However, due to the various advantages of pseudo satellites over these substitutes, the use of pseudo satellite is expected to increase during the review period. Thus, the threat of substitutes in the market is expected to be moderate during the forecast period.
Rivalry
There is intense competition among the existing players in the market with manufacturers investing heavily in the research and development of high-quality, advanced, and cost-effective pseudo satellites. Moreover, due to the increasing demand for cost- and energy-efficient satellites and rising need for border surveillance, the rivalry for market share is set to increase. Thus, the rivalry in the market is projected to be high during the review period.
