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Hard Commercialization Profitability Market Entry

Thunder, Lightning, Strike

#Aerospace
ProHub Comment

This case tests the candidate's ability to balance quantitative market sizing with qualitative business logic. The initial analysis appears negative ($1,200 cost vs. $900 customer value), but the interviewer guide indicates candidates should discover a hidden value driver: the massive cost of flight disruptions to airlines' complex networks. Success requires moving beyond simple unit economics to understand customer operations.

Estimated Time 15 minutes
Difficulty Hard
Source IESE
50 / 100
Our client, AirChief, is a small industrial company in Kansas, USA that manufactures aircraft maintenance and repair equipment. Their clients include (1) commercial airlines and (2) maintenance companies which airlines outsource aircraft maintenance to. AirChief has developed a proprietary chemical technology that allows airlines to repair lightning strike damage much faster than they currently can. They want to know whether they should commercialize said technology.

Clarifying Information

  1. AirChief is heavily vertically integrated and intends to manufacture the product themselves.
  2. AirChief is one of two suppliers that sells the vast majority of specialized equipment for repairing aircraft, including the leading current lightning strike repair solution (although all current solutions are vastly similar)
  3. AirChief’s goal is to achieve a profit by selling the technology they have developed.
  4. AirChief operates solely in the United States.
  5. Lightning strike repair products are a small (think 4-6% revenue) part of their overall catalog. As a result they are willing to wait a long time (5+ years) to see returns from a truly revolutionary product in the space