insitu

Nick Kufus, Eric Brandon, Alex Purcell, Nathan Hungate

History

Snapshot

• Over $400 Million in annual revenue

• More than 800 workers

• Purchased in 2008 by Boeing– They are wholly owned,

not wholly integrated

• Largest customers: – USMC, US Navy, Australian Defence Forces, Canadian Defense

Forces, USAF, Spec Ops

Snapshot (Cont)• Main office in Bingen, Wa and Brisbane Australia (more than 17 offices

throughout Columbia River Gorge)

• More than 473,000 combat flight hours• Base model $100,000• Able to fly over 24hrs on 1 pint of fuel• Recently purchased 120,000 sq. ft. facility

Relevant Information:

• According to global marketing research group Lucintel; total revenue from UAV’s is expected to exceed $7 billion over the next decade

• Boeings hydrogen powered phantom eye drone can stay at 65,000 ft. for up to 4 days without refueling.

• Google acquired Titan Aerospace (20 People) April. 14, 2014 (Yesterday) and Facebook acquired Ascenta Mar. 28, 2014. $20 million

• http://online.wsj.com/news/articles/SB10001424052702304117904579501701702936522 • http://www.salon.com/2013/12/02/what_to_make_of_amazons_drone_plan/

Diagnosing Key Issues

• Legality? Privacy Infringement• Warfare Issues…Who pulls the trigger and who calls the

shots– Human rights laws, domestic laws, UN Charter laws, law of

neutrality• Political, Ethical, and Legal questions stemming from use• Competitors (General Atomics, Lockhead Martin Co.,

Northrop Grumman, Denel dynamics, SAIC)• Crashes are costly (high-tech)• Undiversification

Worldwide Operations

– North America – Europe– Middle East– South America– Asia Pacific– Arctic

• (Above) Gov. Jay Inslee and Steve Morrow, President and CEO of Insitu

Uses

• Defense

• Public Safety

• Commercial

• Research and Education

What sets Insitu apart?

• No weapons payloads• Lots of configurations• Unique launching system• No runway landing• Efficiency

PESTEL Analysis• P/L: Insitu signed cooperative research development

agreement with FAA

• E: Price of technology is dropping

• S: Depends on usage

• T: Smaller, faster, lighter

• E: UAS & UAVs are more efficient & replace higher fuel consuming vehicles

Overall:

Porters 5 ForcesThreat of new entrants- moderate• Lots of startups going that direction though they are not necessarily on the scale or have the same

degree of technological ability Threat of rivals- moderate• They are the powerhouse in the midsize drone technology, however, there are a few firms like

environment though producers of smaller aircraft are moving into the same business segments• Power of buyers- moderate• the number of buyers is very low, but on the other hand they are one of very few suppliers in their

segment

Power of suppliers- low • the ability to do a lot of their parts production in house gives them a very high BADNA for any

purchasing

Substitutability- low• the number of competitors in their segment is low none of them sit in the same size category, and

carryout the same type of activities.

SWOT• Strengths- Boeing subsidiary (synergies, deep

pockets), in a high growth potential industry (teal group, product( 24hours plus operation ability, catch cable, and launchers make for small ground footprint), Airware alliance (ICOMC2), experience

• Weaknesses- not diversified (only makes

midsized drones), still a very young market

• Opportunities- diversify into a different size aircraft. Larger ones could be used for commercial transport or agriculture purposes. Smaller ones have greater opportunity for the consumer market.

• Threats- cuts in military spending, competitors that fit commercial applications a little better,

Acquisition/Alliance:

QUANERGY• A privately held, silicon valley based technology

company developing smart sensing solutions for real-time 3D mapping and object detection, tracking, and classification– In transportation, the data will be utilized to greatly improve

the accuracy and reliability of on-board driver safety systems and enhance them with object recognition and scenario analysis capability, and also to enable autonomous driving in the future.

– http://www.transportationtechnologyventures.com/blog/?p=659

Diversification Strategy:

Parrot tech.

• http://ardrone2.parrot.com/ • Mobile phone drone controlling technology

Recommendations:

• Experiment with start ups in drone “add-on” technologies. Weapons, surveillance, mapping, telecommunications, film making, etc..

• Continue to partner with the federal Gov. to solidify the contract with the military, a market in which competitors would not be able to compete in.

• Mobile Phone controlling capabilities (Parrot Tech.)• Real Time 3D Mapping and Object Detection