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Idea Generated And Business Model Developement: Drone Delivery
Table of Contents
The drones’ usage for delivery is being investigated by various establishments, universities, and regulatory bodies throughout the globe. Also named as autonomous aerial vehicles or unmanned aerial vehicles (AAV/UAV); initially drones were introduced as fixed wing aircraft within the military service. Discussion of this report focuses on how a post and shipping business can exploit drones as well as it discusses about the requirements for modifications and considerations for the built surroundings, regulatory as well as social anxieties associated with the delivery drone usage.
Customers have shown exceptional interest in receiving their products through drown
As inclusion of drones in delivery is on the corner, the FAA is supposing that in USA by the year 2022, there will be 450,000 operating drones, with more than 300,000 approved commercial pilots. Bamburry (2015). Commercial drones for delivering are still in their evolution phase, with huge continuing testing for finding reasonable business models as well as manufacturing solutions.
With such awareness, drones are being included in further practical and ground-breaking utilities and functions. For one’s post and delivery business, drones can be included as a creative idea. The delivery drones have similarities of a typical hobbyist drones and are quadcopters and have the capacity of carrying parcels weighting up to ten pounds.
Usage of drones can be very advantageous in the Transport or Shipping business
Although UAVs applications on the Post and parcel delivery are still under development; the idea however, seems to be ground-breaking for upcoming days. Kornatowski et al. (2018). The inclusion of this technology might drastically lessen the time taken for delivery and diminish human effort.
According to Osterwalder’s and Pigneur’s model, the main tool for their business is thinking or modeling, which is termed as Business Model Canvas. It is an imagery presentation of main business model subjects. Here is an image of all the nine blocks of the model:
- Customer Segments (CS): You need to find out who do you consider as your customers and why will consider your service? Find out the customer archetype you are targeting. Identifying and in-detail understanding about your customers is a must.
- Value Proposition (VP): What is the product and/or service you will be offering and to whom? What requirement your service / product will be filling? How will it solve present problems? What problems you will be addressing?
- Channels (CH): How will your customers get the product or service you are offering? Are you exploiting physical locations or virtual platforms for distributing your product or service?
- Customer Relationships (CR): What are your customer attainment and retainment strategies? What are your strategies for bringing traffic to your website or a physical address? What is your plan for growing the customer base?
- Revenue Streams (RS): What would be your formula of making money? What value are you selling to your customers?
- Key Resources (KR): What is your requirement for making the business successful? What are the key assets you require?
- Key Activities (KA): What are the actions you need to take for operating the business? What are the significant components you need to consider for making the business work?
- Key Partnerships (KP): What are the actions your partners would perform? What will you be attaining from your partners?
- Cost Structure (CS): What are the consistent and inconsistent expenses for operating this business? What are the most costly actions? Are there any financial system for scaling?
From UCD viewpoint, the most essential segments are customer segments (CS), channels (CH), value propositions (VP), and customer relationship (CR). Additionally, this book illustrates that the business model’s standpoint, mainly the revenue flow links value propositions (VR) and Customer segments (CS). Hence, the book has become a great inspiration for designers as well as engineers for familiarizing themselves with the aspects of the product/service development business. Pucihar et al. (2018). The model must be applied in the development phase of a drone supported Post & Parcel delivery system.
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For including drones within a delivery system, a few major points needed consideration about the built surroundings. Whereas new constructions can be erected for accommodating drones, present buildings will require amendments. To deliver to any building, be it industrial, commercial, or residential; there must be space using which drones can deliver the goods.
For an existing building, using roofs, balconies or even front porches can be effective. A building’s outdoor side requires weather protection or a shelter, along with a locating system that a drone can detect. Drones generally use GPS navigation to coordination. GPS coordinates installed in buildings will be apt.
Also, GPS precision through smartphones can also be very helpful to get real-time updates about the drone’s location. A hut-like construction might be designed for letting the drone enter and drop off the parcel. Tests are also being done to find the best ways or delivering parcel to the rural and remote locations. Wang et al. (2019).
In various fields drones are already in use. Chen et al. (2018). For instance, drones are often used in photography, surveillance, construction checking, search and rescue operations etc.
In spite of drones being in use for several years, the United States Federal Aviation Administration (FAA) has created stern policies showing the process for registering UAV’s, and guidelines for flying them correctly. Bamburry (2015).
Drones have become more affordable as well as its availability can also be noticed. Presently, there are 2.5 million drones in the USA itself, which is supposed to nearly be tripled by the year 2020.
There are some areas that need major upgrading for regularizing drones in post and parcel business:
Regardless of some preliminary improvement in defining drone regulations, many questions are yet to be answered and resolute. For instance, FAA might take years for deciding the regulations for delivering drone-based packages. The laws stating drone operations will be inevitably multifaceted, for justifying in the process drones are being devised as well as what woukld be the best practices for using UAV’s in the future. Murray & Chu (2015). Administration needs to introduce laws that will facilitate innovation, however limiting privacy breaches and airspace misuse that eventually will be very challenging.
The best part of drones is their competency of flying without any pilot. In most of the cases, there has to be someone responsible for controlling the UAV’s remotely. Flight patterns of drone comes with various other concerns that mainly includes finding ways for evading obstructions and to ensure drones does not hinders each other. Reddy et al. (2019).
Presently, using drones for shipping and posting is very costly. One can obtain a utilizable consumer model within a few hundred dollars, however for companies to invest in drones as ground-breaking technologies and arrangement would cost a huge amount for each bought drone. Additionally, an entire fleet of drones would be needed for full-scale delivery, which is nothing less than a million dollar investment. As delivery drone and service intended to be economic, it might take years to apply such business models for using drone to have a cost-effective and justifiable usage.
Reliance is another main obstacle drones are facing presently. Think of a futuristic situation where drones are the only mode of package delivery; and if the success rate of the carrier handling drones is 90%, probably none would be interested to take that 10% risk. Reddy et al. (2019). It is must for drones to obtain much higher reliance level (nearly 100%), prior being used for delivering parcels. Various concerns like launch failure, navigational errors, disturbances, package theft or even people noticing the drone dropping the parcel off – any of these might occur.
The research shows that a considerable part of public is still hesitant in allowing drones near them
Very first concern for drone based parcel is obtaining acceptance of public. If people are suspicious of drones being exploited for surveying their property, or delivering their packages, carrying out military missions, organizations will be least interested in using them. Drones have attained noteworthy public enthusiasm; however customers are still not ready and cannot have full confidence in this technology’s future usage.
Solution of the problem
The post and parcel business owners, drone makers, people who represent public communities as well as FAA and/or other government representatives need to have several meetings to sort the above mentioned issues out. As the issues are mainly related to regulation and people’s perception about drones, a clear discussion using the business model in mind can be of great help to sole the issues and come up with resolutions.
The idea of using drones in shipping parcels seems to be very innovative. However, issues with regulatory bodies, public accessibility of drones as means of delivery, costing and lastly occurrence of any technical faults while delivering the parcels are matters of discussion for entities that are planning to strive in delivery through drone industry which is already working with influential companies. They need to have more visibility and give time so that the drones become more viable and faultless so that the chances of losing business and facing any lawsuit risks are mitigated.
The Amazon is aiming at using drones to deliver packages to their customers’ hand within thirty minutes or less using their innovative drone delivery system, According to Amazons official statement, their drones can travel within a radius of 10 miles, and can carry packages weighing as much as 5 pounds. Although the project is still in the developing stage, Amazon is hoping that they will be able to start this delivery system very soon.
In April 2019, Google Wing became the first drone delivery business that received Air Carrier Certification from the FAA. With the attainment of the Certification, Wing will start a commercial service in USA for goods delivery from local businesses to homes. These drones already flew more than 70,000 test flights, and did over 3,000 doorstep, driveways as well as backyards deliveries to the Australian customers.
The start-up is very serious in delivering probably anything, round the clock at any place, using drones. The Australia based organization’s delivery using drones project is under development. However determination and strong branding that the company did makes us believe that they will probably become one of the leaders within this emergent industry of drone delivery system.
It needs to be pointed that the technology of drone is certainly setting some innovative benchmarks within the niche of package delivery business in every potential side. It is factual that through utilizing drones, the delivery businesses would be able to reduce the human labor cost and wait times in a drastic manner. Yet, considering the initiative from a cost-effective approach, it can be noticed that drone delivery might be something, which is not as worthy as it sounds to be.
The drones cannot deliver several parcels in one run (at least for the time being), that makes the service delivery in must owning a fleet of drones for making an actual profit through the deliveries. As a concluding statement it can be said that the usage of the technology of drone for the delivery trade is undergoing the identical challenges as the technology of self-driving vehicles. Many companies have come up with the technology, however the biggest problem for it to actually work in real life, are legal and regulation related issues.
Pucihar, A., Ravesteijn, M. K. B. P., Seitz, J., & Bons, R. (2018). Designing business model tooling for business model exploration: An experimental design for evaluation.
Murray, C. C., & Chu, A. G. (2015). The flying sidekick traveling salesman problem: Optimization of drone-assisted parcel delivery. Transportation Research Part C: Emerging Technologies, 54, 86-109.
Bamburry, D. (2015). Drones: Designed for product delivery. Design Management Review, 26(1), 40-48.
Kornatowski, P. M., Bhaskaran, A., Heitz, G. M., Mintchev, S., & Floreano, D. (2018). Last-centimeter personal drone delivery: Field deployment and user interaction. IEEE Robotics and Automation Letters, 3(4), 3813-3820.
Wang, K., Yuan, B., Zhao, M., & Lu, Y. (2019). Cooperative route planning for the drone and truck in delivery services: A bi-objective optimisation approach. Journal of the Operational Research Society, 1-18.
Reddy, T. B. S., Teja, P. H., Teja, R. P., & Praneeth, T. (2019). Adaptive Autonomous Technology in Unmanned Aerial Vehicles for Parcel Delivery.
Chen, M. H., Lan, Y. Q., Hu, J., & Xu, Z. (2018). An improved edge recombination algorithm for scheduling problems of drone package delivery. Journal of Discrete Mathematical Sciences and Cryptography, 21(2), 423-426.
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