D-Orbit: Keeping The Thermosphere Clean

D-Orbit is an entrepreneurial start-up operating in the aerospace industry, developing a technology for the controlled removal of end-of-life debris from space. The case focuses on the nexus between strategy and (space) sustainability. The emphasis of this case is given to the role of the private sector (in this case entrepreneurial start-ups) in tackling sustainability issues by converting them into opportunities for profits. The case triggers discussions on the tension between market imperatives (the extent to which the solution proposed by D-Orbit offers more value to customers than alternative solutions) and sustainability problems (in this case, "the tragedy of the commons" and issues related to moral hazards) and stimulates reflections on the role the private sector can play in achieving a sustainable future. In order to achieve these objectives, the case presents a challenge faced by Luca Rossettini, founder and president of D-Orbit Srl: whether increasing skepticism on the part of would-be investors concerning the robustness of the current business model (and its customer value proposition) is a signal of possible problems which are worthy of attention and rigorous strategic analysis, or whether it is simply due to a lack of familiarity with the industry, as some of Luca's colleagues suspect. Luca and his team believe that the principal benefit of D-Orbit for satellite operators is that it will allow them to prolong the life cycle of a satellite, saving the propellant destined to be used for de-orbiting maneuvers by the on-board propulsion system. This represents a considerable opportunity cost for satellite operators. However, investors seem worried that the same operations could be performed simply by enlarging the existing on-board propellant tank to carry more fuel. Is this a viable alternative? Is it potentially more attractive to customers? What other benefits might D-Orbit offer? An analysis of the case will progressively lead to discussing possible configurations of the aerospace industry, as well as D-Orbit's main competitors and substitute technologies. It will also lead to a comparison of the three main alternatives from the view point of incremental analysis (i.e. incremental benefits and incremental costs). These are: the situation as is, D-Orbit and enlarging the propellant tank. Such an analysis will help students to realize that, while from a customer's perspective D-Orbit does not offer comparatively strong benefits with respect to viable alternatives, from a sustainability standpoint the solution proposed by D-Orbit offers a way to avoid the tragedy of the commons in space sustainability by eliminating satellite operators' incentives to misbehave.