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Medium New Product/Market Entry Pricing Strategy Creativity

Dark Sky

#Aerospace & Defense #Manufacturing
ProHub Comment

This case tests the candidate's ability to analyze growth strategies for a single-customer, capacity-constrained aerospace manufacturer. The case reveals critical trade-offs between revenue maximization, cannibalization effects, and strategic portfolio decisions, requiring candidates to move beyond simple financial calculations to consider operational and competitive factors.

Estimated Time 15 minutes
Difficulty Medium
Source Kellogg
50 / 100
Our client, Dark Sky, is a small manufacturer of unmanned (ie. remotely piloted) data collection aircraft. Dark Sky produces the Assessor, an aircraft originally designed for unmanned weather exploration. In 2006, the United States military began purchasing Assessors for use in Intelligence, Surveillance and Reconnaissance (ISR) missions. The Assessor is profitable, but sales have stagnated and the client wishes to grow. What are some steps Dark Sky could take to achieve growth?

Clarifying Information

  1. Customer / Price: Dark Sky’s only customer is the US Military, with which they have a Cost-Plus-Fixed-Fee contract. The contract has been extended in the past and is up for renegotiation; the Military has agreed to a marginal inflationary price increase
  2. Company: Dark Sky has additional capacity to manufacture. They are too small to acquire competitors.
  3. Product: Dark Sky designs a unique aircraft that is launched from a catapult device; the aircraft can be launched from ships at sea or from harsh terrain (e.g. desert, mountains). Dark Sky only sells the Assessor, but has other prototypes designed.
  4. Competition: There are approximately 20 competitors that manufacture unmanned aircraft.