Critique

I am doing my critique on the underwater airplane. The article itself was very interesting to me. I agree with almost all of the reviewers key points on the article from CNN. There are not any other competitors for a business such as this. Their product being an underwater airplane is currently unmatched in the industry and is truly one of kind. The man that built it, Richard Branson, is a successful billionaire. He constructed this underwater bird of the sea. He believes that a ride in his plane should cost his guests 25,000 dollars. This is just where it starts. He then will charge his guests another 300,000 for staying on his privately owned island. These two costs along with miscellaneous ones run each guest a grand total of 400,000 dollars per stay. Clearly this does not appeal to everyone granted the cost is so high. The reviewer says that Branson will have a tough time coming out on top… I beg to differ. He is making the majority of his money from people simply staying at the island. He uses the plane as a tool to lure them there. Even though there are not hundreds of thousands of people with this amount of disposable income there are some that do. Of this smaller population of high income people they would be more interested in buying a product such as this. If there are only 100 people that visit his island every year that already puts him at 30,000,000 dollars. I have a hunch more than 100 people venture there every year.

The reason Branson is able to charge the prices he does is because he was able to use technology to get ahead of his competitors. Microsoft used this for a while to make all of their money. Since Branson’s underwater plane is one of a kind there are no substitutes for it that are out yet. By charging this high price in the beginning consumers have no choice but to spend if they want to experience it. These first years are when he will make his profit. I believe that once other competitors are in the market that his profit may stabilize and break even. This won’t be problematic granted his first couple years of income. The reviewer talks about variable costs being an issue but when you put things in perspective a pilots wages and filling up a large gasoline tank seem very minuscule.

I found this article very interesting to read and was surprised there is a thing such as an underwater airplane. The reviewer did a great job with this article and hit the key points; most importantly that this industry is indeed a monopoly.