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WHAT is PuRCHAsing And suPPly sTRATEgy? 159

As the market for satellites developed, scientific and technological innovations have led
to what has been called a ‘democratisation’ of space, with SSTL maintaining what it says is a
40 per cent share of the global export market for small affordable satellites. How has it achieved
this success from such small beginnings? Well, partly because it was an early player in the
market, having the vision to see that there would be a market for small satellites that could
serve the ambitions of smaller countries, companies, research groups and even schools. As
the company says, the small satellite revolution started with SSTL. But, in addition, it has
always been innovative in finding ways of keeping the cost of building the satellites down to a
minimum. SSTL pioneered the low-cost, low-risk approach to delivering operational satellite
missions within short development timescales and with the capability that potential custom-
ers wanted. In the early 1980s, as the first microcomputers became commercially available, Sir
Martin Sweeting speculated that it may be possible to use programmable technology to build
small satellites that were ‘intelligent’ when compared with conventional large and expensive
hard-wired satellites. It also would allow the satellite to be reprogrammed from the ground.
Particularly important was the company’s use of commercial off-the-shelf technology. Com-
bined with a determination to learn something from each new project, a pragmatic approach
to manufacture and low-cost operations, it enabled SSTL to keep costs as low as realistically
possible. In effect, using industry-standard parts meant exploiting the, often enormous,
investments by consumer- electronics companies, auto part manufacturers, and others who
had developed complex components for their products. Even if this sometimes limited what
a satellite could do, it provided the scale economies that would be impossible if they were
designing and making customised components from scratch. ‘We were being parasitic, if you
like,’ admits Sir Martin.
However, not all commercially available components made for terrestrial use are up to coping
with conditions in space, which is a hugely important issue. Reliability is essential in a satellite.
(It’s difficult to repairer them once in space.) And even though off-the-shelf components and
systems have become increasing reliable, they must be rigorously tested to make sure that they
are up to the severe conditions found in space. One of the key problems is how components
react to the high levels of radiation in space. For example, different smartphone constituents
(a regular source of components) react in different ways to radiation. Knowing which bits can
be used and which cannot is an important piece of knowledge. Yet, although individual com-
ponents and systems are often bought off-the-shelf, the company does most of its operations
activities itself. This allows SSTL to provide a complete in-house design, manufacture, launch
and operation service as well as a range of advice, analysis and consultancy services. ‘What
distinguishes us is our vertically integrated capability, from design and research to manufacturing and
operations’, says Sir Martin. ‘We don’t have to rely on suppliers, although of course we buy in compo-
nents when that is advantageous.’

Why adopt a network perspective?

A key insight derived from adopting a network perspective is the recognition that dif-
ferent organisations in a network relate to each other in a range of different ways. These
include ‘classic’ interactions, such as upstream and downstream market linkages (i.e.
buying and selling from each other), and competition (i.e. ultimately, a whole range
of performance attributes – such as price – will be driven, even if indirectly, by com-
petitor offerings). But a broader network perspective also reveals that organisations,
many of them direct competitors, frequently collaborate; it is increasingly common,
for instance, for groups of organisations to combine together into consortia when

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