{"id":10358,"date":"2020-02-09T21:20:29","date_gmt":"2020-02-10T02:20:29","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/dji-winning-in-consumer-drones\/"},"modified":"2020-02-09T21:21:57","modified_gmt":"2020-02-10T02:21:57","slug":"dji-winning-in-consumer-drones","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/dji-winning-in-consumer-drones\/","title":{"rendered":"DJI: Winning in consumer drones"},"content":{"rendered":"

DJI Overview: f<\/b><\/strong>rom hobbyist to billion-dollar business<\/b><\/strong><\/p>\n

When Frank Wang incorporated DJI (Da Jiang Innovations) Co in his dorm room in 2006, the market for unmanned aerial vehicles (commonly known as drones) was limited to a few die-hard hobbyist and research institutions. DJI began by selling component to a few research universities and drone hobbyists around the world.<\/p>\n

As the DIY drones market moved from single-rotor to quadcopter designs, Wang began to develop flight control functions, GPS systems and video stabilization gimbals, and marketed them to a small audience in specialty trade shows and UAV enthusiast message board.<\/p>\n

In 2012, DJI launched its flagship product Phantom, and it was the first ready-to-fly, preassembled drone on the market. Phantom quickly became the best-selling product. The ease of use helped Phantom to find a following beyond dedicated UAV enthusiasts, and market DJI\u2019s steady march towards dominance in consumer drone market. The drone maker has steadily move toward bigger market with its subsequent Mavic and Spark series. By 2018, DJI accounts for 72% of the total drone sales.<\/p>\n

Key decisions contributed to DJI\u2019s success: With Phantom, it produced a superior product by integrating modular components. It innovated around technology to fulfill customers\u2019 needs, and it continued to reinvent itself by introducing new products and optimized internal resources and processes to a product focused strategy.<\/p>\n

Becoming leader in <\/b><\/strong>the <\/b><\/strong>consumer drone market<\/b><\/strong><\/p>\n

Since its first Phantom launch, DJI has positioned its product to serve the needs of the aerial photography and videography market. Its product evolution, innovation process and pricing were all tightly integrated around the concept of a \u201cflying camera\u201d.<\/p>\n

Wang positioned the company as a\u00a0\u201cglobal leader in aerial influence\u201d. The company\u2019s goal was to allow customers to take stunning footages from the air with a high-quality, easy to use product. Once Wang realized the potential for aerial imaging, he pivoted from single-rotor helicopter to quadcopter technology and began developing gimbals which could fix and stabilize cameras attached to drones. From 2012 onward, DJI has focused on innovation around key technologies that enable better image quality: Quadcopter flight control, gimbal for camera stabilization, and transmission of video and photographs in real time.<\/p>\n

Disruptive technology in aerial imaging<\/b><\/strong><\/p>\n

Before commercially available drones, aerial imaging was limited to military and profession crew manning large fixed-wing UAVs or helicopters. Phantom and other products offered by Parrot and 3D robotics allowed footages to be taken at a much lower costs of a store-bought drone, resulting in a disruption in the aerial imaging market.<\/p>\n

Technology also unlocked the demand for drones by making them much easier to pilot and use. The need to manually control early drone models created a high barrier to adoption and hence non-consumption. The modern drone comes with collision detection and automatic flight control system, making it vastly more accessible to people without extensive drone flying experience.<\/p>\n

Continuous <\/b><\/strong>Innovation<\/b><\/strong><\/p>\n

Since DJI launched its Phantom, the company has been on a sustaining path to introduce features that help to \u201ctake better videos\u201d. Phantom series steadily improve the image resolution, flight time and ease of use.<\/p>\n

From the outset, Wang wanted DJI to make professional grade drones at a reasonable price acceptable to most people, whereas other players saw the space as \u201cattaching camera to a toy drone\u201d. Retailing for $679 when it first launched, Phantom was more expensive than offerings from DJI\u2019s rivals such as Parrot and other Chinese drone manufacturers. However, because its value proposition for aerial imaging was so compelling, many customers are willing to pay the premium features of the Phantom.<\/p>\n

Expansion: m<\/b><\/strong>oving into mass consumer market\u00a0<\/b><\/strong><\/p>\n

Following the success of Phantom, DJI has moved steadily towards serving a bigger market. This involved designing features around new customer needs.<\/p>\n

On area of innovation is around drone weight. Unlike drone enthusiasts, mass market consumers priced portability over performance and customization. Mavic, DJI\u2019s next series released in 2016, was designed to be foldable and light, catering to casual drone enthusiasts. DJI also introduced Spark in 2018, which weighed just 300g and could easily fit into a small backpack.<\/p>\n

Instead of panoramas or footages of natural scenery, Mavic was designed with the selfie crowd in mind. DJI introduced the \u201cgesture mode\u201d, which let users take selfie without been seen holding the camera. The drone was also able to track and circle around a person, taking aerial selfie images perfect for social media sharing.<\/p>\n

Organization: a<\/b><\/strong>ligning resources around innovation<\/b><\/strong><\/p>\n

Manufacturing<\/b><\/strong><\/p>\n

Unlike its competitors, DJI established its own manufacturing facilities to produce the drones. Shenzhen is at the heart of Chinese manufacturing, which enabled DJI to respond quickly to ramp-up in demand. The low cost of labour also helped the drone manufacturer to retain competitive pricing, even with high-performance features added to its drones.<\/p>\n

The in-house manufacturing capability can support the rapid pace of product launch.\u00a0When changes to specifications are made during product meetings, engineers could produce prototypes within hours.<\/p>\n

People<\/b><\/strong><\/p>\n

DJI poured its resources into building the world\u2019s largest research and development team. With 800 employees and 25% of its engineering staff devoted to R&D efforts, DJI became the leader in patent applications on drone related technology.<\/p>\n

Organizational Process<\/b><\/strong><\/p>\n

The company was able to establish its dominant position through rapid product cycle, typically launching 1 to 2 new products every single year. To promote bottom-up innovation, DJI allowed any staff from product development team to lead initiatives if their proposals can withstand the extensive interview and scrutiny from the product development committee.<\/p>\n","protected":false},"excerpt":{"rendered":"

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