Case Study 2: DJI Innovations
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案例分析范文 The company invested in small unmanned multi-rotor autopilot systems to extensive flying systems that were used commercially.
Case Study 2: DJI Innovations
Overview
Situated in China’s Guangdong province, DJI Innovations has been a global player in developing and making quality, high performance, reliable, and easily used small unmanned aerial systems for commercial and recreational activities. Frank Wang established the company, then a 24-year-old undertaking a master’s degree in electronic and computer engineering at the Hong Kong university. The company began with a collection of flight-control innovations and helicopter systems targeted at local hobbyists. Later on, Frank moved the company’s attention towards aerial photography by driving several technological breakthroughs. The company invested in small unmanned multi-rotor autopilot systems to extensive flying systems that were used commercially.
The company’s most significant success came with introducing its ground-breaking innovation, Phantom, a flying quadcopter aimed at the hobby market. The Phantom was a game-changer due to its unique design in aspects of capacity to carry a camera and its ease of flying even for beginners at an affordable price. With positive reviews from consumers, the Phantom gained fast market acceptance, and the company began selling thousands of units each month by mid-2013. 案例分析范文
The volume of sales increased 79 times in 2013 when compared to 2011. Through the innovation of products, Franks had successfully created a new market by attracting a new group of customers who previously were not consumers of in this industry. By the end of 2013, the company’s total market share was close to 80% of the small unmanned aerial vehicles and was making 60-70% margins. Moreover, the company had attained yearly sales of $131 million, with a three to fivefold increase in earnings per year since 2010. Backed up by an employee base of 1,500 employees and several product lines, the company’s global operations covered North America, Europe, and Asia.
The DJI company is a global player in developing and making quality, high performance, reliable, and easily used small unmanned aerial systems for commercial and recreational activities. 案例分析范文
From a personal effort, Frank designed the first helicopter that motivated him to undertake more developments on it. Under the encouragement of his tutor, professor Zexiang Li, Frank focused on backward and forward movement to make the helicopter easy for anyone to operate without practising for months. Frank and his team went ahead to build the second-generation helicopter and controller system, and the cost was lower for this model. Motivated by the company’s technology growth, Frank hired some more people to work on the third-generation products. The company blended low-cost, high-performance tools with significant competence in developing stabilisation and positioning software to pilot the new product automatically. The new third-generation helicopter controller turned out to be a leading technological product.
The DJI company is market-driven in that it learns, understands, and responds to the perceptions by stakeholders and behaviour in the market structure. From the case study, even though the company continued to lead in this industry, some new market trends emerged. Customers purchased the controller from the company and gimbals from other firms and put them together with a camera to take aerial photos. In 2010, one of the company’s parts suppliers informed Frank that he was selling 200 gimbals in a month and that most of his customers were using multi-rotors. 案例分析范文
The new trend in the market made Frank stop, and he looked at other firms that worked with such helicopters.
He noted that most of these firms were not developing; they had either stayed at one level or had closed down while the market for multi-rotors was increasing. Frank took time to analyse this information and weigh the advantages and disadvantages of multi-rotors against helicopters. With this information, the company decided to change its approach and invested in multi-rotors. This change means that the company is market-driven.
The company launched one of the most innovative products, the Phantom, a highly integrated multi-rotor made for the mass consumer market. Before the Phantom was introduced, making and flying multi-rotor aircraft was a sophisticated task only done by experts. The reason behind this is because existing items were often in the form of a kit that needed time, patience, and skills in a sophisticated procedure of creating one.
Launched at $679, the Phantom was half the price of rival units. As Frank puts it, the company was the first to make military-level technology available to the public, which gave the product a competitive advantage and attracted a bigger group of consumer hobbyists than just control pilots. The product also had advanced navigation and software controls. Another distinctive feature of the product was that it came with a mount made to carry a small light camera. The mount permitted consumers to attach the camera of their choice for recording videos and taking photos. Advanced technology, better features, and low prices are the competitive advantages of the Phantom. From a competitive position, DJI is a market leader with a market share of close to 80%, as discussed in the case study.
Key Issues 案例分析范文
Managing the NPD Process
Lakemond et al. (2013) suggest that challenges in the development of a new product arise regardless of the speciality of a product. As discussed in class, launching a new business – a technology start-up or initiative in a big corporation – has often been a hit-or-miss option. For the DJI company, the main factors that pushed for the development of the new product were the emergency of advanced technology, fragmented markets with demanding consumers, and highly competitive levels. However, for a small business like DJI, there were challenges in the new product development process. The company faced issues in terms of bandwidth required for new product development. Numerous difficult decisions had to be made in every development stage to ensure that the scarce resources were adequately and effectively allocated.
Maintaining Market Position
Even though DJI remained the leader in the industry, with many popular reviews and sharing of information on online platforms, a variety of these products entered the market. These products ranged from DIY projects to complete multi-copters. Some were manufactured by huge aerial companies such as Hoverfly and Draganfly. Closer to DJI company in Shenzhen, a small company had designed Hex, an open-source copter kit with 3D printers and sophisticated machines for faster manufacturing and prototyping.
Other critical players that threatened the competitive position of DJI in China include Hubsan and Chenghai, whose products were gaining popularity at a faster rate. Another company in Taiwan, Tai Shih Hobby, was focused on developing and producing innovative RC aircraft. Therefore, the hobby market was becoming saturated with some products more suitable for beginners while others were meant for extreme hobbyists. 案例分析范文
Protecting the Firm’s Patented Technology
From the case study, DJI has not had any problems protecting its patented technology in international markets regardless of its higher-tech products. The company has consistently produced higher quality products than competitors in the US, China, Japan, and France, but no case has been discussed concerning its patented technologies.
Potential Problems of New Market Entry
Besides competing in the new market, DIJ faced challenges in penetrating the US market due to some regulatory measures. From 2010 to 2020, the US was projected to remain the biggest producer and operator of unmanned aerial vehicles. The nation’s production accounted for 45% of the international market. However, legislative and regulatory issues significantly delayed the emergence of the commercial market that had now become the main target of DJI. The federal aviation agency restricted commercial use of such vehicles.
Taking videos for personal purposes was allowed, but such could not be sold for business purposes. The rules that applied to hobbyists were similar to those given to aircraft lovers in 1981. Those flying controlled helicopters were to follow guidelines. They were to be kept below 400 feet, flown away from a populated area or airport, and be kept in the controller’s line of sight. This set of government regulations are a barrier to entry in the US market for DJI because it focuses mostly on the commercial market for its products, but now, the market is suppressed by federal laws.
Critical Analysis 案例分析范文
Managing the NPD Process
From the opportunity identification framework of NPD, Frank took time to analyse information that he had collected on other firms making the helicopters. From the analysis, he discovered the opportunity of producing multi-rotors rather than helicopters. The helicopter was more sophisticated because it had many gearing systems, and many parts needed mechanical accuracy. As a result, the cost of operating and producing helicopters was high. The helicopter had a large propeller that could destroy property and severely hurt people. On the other hand, the multi-rotors were simple, needed less maintenance, and were portable. The company, therefore, identified the opportunity of producing multi-rotors and shifted to the production of these rotors.
Maintaining Market Position
With the company’s high-tech products being its main selling point, Frank has developed the concept of continued superior products to maintain DJI’s competitive position in the global market. Short-term and long-term research and development efforts would be needed to ensure superior technology for the systems. Franks projected that a single technological advancement needs ten individuals and three years to develop. Thus, planning in aspects of research and development was crucial for designing the product line. The company also planned to reduce prices even for expensive models while maintaining costs to remain profitable to maintain the competitive position.
Potential Problems of New Market Entry
In the NPD frameworks, a business should commercialize its product as the final stage of developing a new product (Kowang et al., 2014). In what seems to be a response to US regulations on commercial use of unmanned aerial vehicles, DJI has plans to penetrate the commercial industry. With filming and photography applications, the company showed its flight control product array on several platforms. For instance, the annual show in the US attracted the industry’s top stakeholders, scientists, students, and researchers. In doing so, the company seeks to commercialize its product because it exhibited products that can be used commercially. 案例分析范文
Observations and Recommendations
A business with visionary leadership has a higher chance of beating all odds and become successful. Leaders who make informed decisions on behalf of the firms are crucial in the success story of such entities (Taylor et al., 2014). From the case study, DJI managed its strategies effectively in all of its transition stages. When the company had scarce resources to manufacture first-generation products, plans were implemented and ensured fair distribution of resources. As a counterintuitive move to address disparities in the organization, Frank deliberated on some strategies that resulted in Frank giving up the service business but used it as a marketing tool that attracted more customers. Finally, being a market-driven entity, DJI shifted to the manufacturing of multi-rotors because they were profitable. Therefore, from the analysis of this case study, the firm managed its strategies effectively.
DJI can use a customer-based approach as an NPD strategy. The company can work backwards from the customers. It can provide information about the product and make it as simple as possible for anyone to understand (Millson and Wilemon, 2008). Then, the company can work in reverse from the information released to the product. This approach is a product development strategy that can focus on the company’s internal process in customer engagement to design specific goods that meet a particular need (Steiner et al., 2016).
References 案例分析范文
Kowang, T. O., Long, C. S., & Rasli, A. (2014). New product development framework for multinational multi-locations-based organizations in south-east Asia. Procedia-Social and Behavioral Sciences, 129, 68-74.
Lakemond, N., Magnusson, T., Johansson, G., & Säfsten, K. (2013). Assessing interface challenges in product development projects. Research-Technology Management, 56(1), 40-48.
Millson, M. R., & Wilemon, D. (2008). Impact of new product development (NPD) proficiency and NPD entry strategies on product quality and risk. R&D Management, 38(5), 491- 509. 案例分析范文
Steiner, M., Helm, R., & Hüttl-Maack, V. (2016). A customer-based approach for selecting attributes and levels for preference measurement and new product development. International Journal of Product Development, 21(4), 233-266.
Taylor, C. M., Cornelius, C. J., & Colvin, K. (2014). Visionary leadership and its relationship to organisational effectiveness. Leadership & Organization Development Journal.
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