Drones - Assignment 1
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Swinburne University of Technology *
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Jan 9, 2024
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How often have you heard a buzzing sound, and looked up only to see nothing but a flashing light? You look again, thinking have I gone crazy? You know it’s not an aeroplane or a helicopter, so what could it be? These small objects are known as drones, or according to Nex and Remondino et. al. 2014 unmanned aerial vehicles. Drones have been used in numerous industries, including agriculture, property, and infrastructure and of course for recreational video and photography purposes. However, with rapid technological advancements’ drones are expected to become an integral part of the transport industry, lowering operating costs and overcoming geographical challenges. According to the Australian Government’s Department of Infrastructure, Transport, Regional Development, Communication and the Arts, drones have the potential to transform the transport and logistics industry as they possess the ability to provide alternative methods for delivering parcels, food, medical supplies and provide other services. It is estimated that drones will produce savings in e-commerce from 2020 to 2040 by as much as 1,875 million dollars. Green energy needs to be incorporated into value propositions statements and strong marketing campaigns for companies looking to fully capitalise on sales from consumers. According to Chhilwar 2015, the logistics and e-commerce industry consists of warehousing, courier, shipping, road, rail, and air cargo. Within the industry, competition is extremely high, with low levels
of differentiation, often companies only point of difference to competitors are price and service quality. This gives buyers a lot of bargaining power, as consumers, expect to receive products at fast rates, with greater flexibility and a low price. With low barriers to entry, the use of drones is going to impact the market share of all existing competitors. Consumers, particularly those of Generation Z are actively addressing climate change and according to the Waiting for Green Light, Transport Solutions to Climate Change, transport is Australia’s second-largest source of greenhouse gas pollution after electricity. As drones continue to
influence this market, a long-term benefit and market advantage include their ability to reduce annual CO2 emissions, by up to 8,000 tonnes. That figure is the ACT alone, imagine the impact across
Australia and the world! With such an impact on the climate, drones would soon become a favoured approach, especially given plans such as Net Zero emissions by 2050. The use of drones will need to ensure brand loyalty through its value proposition and continue for ways to provide innovative and unique services. An example of how drone could continue to develop innovate ways, would be having delivies not only to your home, but anywhere anytime. Many large manufacturers are jumping on board, with companies such as Amazon, launching ‘Prime Air’ which sees drones deliver packages from its warehouse for as little as $1. Imagine ordering a package, only to have it delivered 30 minutes later. Once upon a time, this would have been nothing but a dream, but for consumers, this is a very attractive feature. Drones are the fastest form of delivery method on the market. With consumers wanting quick, climate and cost-effective delivery methods, drones seem to be jackpotting the market. Merchants see the benefits too. As Artificial Intelligence continues to develop and grow, drones can link in effectively with AI to avoid packing delays and save on human wages. This, however, could lead to growing concerns over employment options, and lose of jobs, which could cause some unreset amongst consumers despite the quick turnaround. As Porter (2008 p. 81-82) states, buyers are powerful if they have negotiating leverage, especially if they are price sensitive. To ensure profitability and gain bargaining power of buyers, companies using drones as a delivery method would want to ensure timeframes are met. This will consolidate their competitive advantage in the industry over methods such as couriers or postage.
Although drones do have some downfalls, some consumers continue to voice concerns about privacy measures. Australia has been at the forefront of security levels when it comes to legislation. In 2002, what was known as the ‘Drone Age’ was the year Australia introduced leading legislation and created governing civilian use of the technology. Many other countries are still trying to navigate
through legislation, which leads to a pressing concern that drones could be prone to being hacked and pose significant cybersecurity threats. This could also be a threat to drones being used as a substitute product to shipping, couriers and postage. Supply and demand is also increasing drones' market share. The Covid-19 pandemic caused havoc, on Australia’s operations of global and domestic chains and exposed many vulnerabilities with 98% of trade and most jobs connected to or reliant on sea freight in some way, according to the Australian Industry Group report. We saw lengthy lockdowns, shipping container shortages and skyrocketed prices. Our global supply chain was already under significant pressure, but the pandemic
exasperated this stress. For many, this meant contracts couldn’t be met, or customers' expectations were failed. But how do drones play a part in this? Just think, during the pandemic planes stopped flying. As an island, Australia receives most of the cargo via air, so when planes stopped flying cargo frequency was reduced. Although drones only have the capability to fly short distances, as technology progresses, drones in fact may be able to solve Australia’s global and domestic supply pressures, in the not-too-near future, and begin to moderate shipping prices. They have the potential to decrease our carbon emissions drastically, as well as reduce traffic across cities. They have so many benefits and are set to continue to gain market share, but some downfalls will need to be addressed to ensure market share can continue to be gained. This includes legislation
and privacy concerns, and ensuring adequate people are trained with the right skill set to fly drones. Drones hold an exciting future in the way logistics and transport operate. The question remains, how
much market share can they gain, and will cause some aspects such as rail to become irrelevant in the future? Despite having many benefits, there are some important concerns to be addressed before they become the front-runner, and being to attain market share. References
Au, C. (n.d.). WAITING FOR THE GREEN LIGHT: TRANSPORT SOLUTIONS TO CLIMATE CHANGE
. [online] Available at: https://www.climatecouncil.org.au/wp-content/uploads/2018/10/CC_MVSA0154-Report-
Transport_V6-FA_Low-Res_Single-Pages.pdf
.
Department of Infrastructure, Transport, Regional Development, Communications and Arts, c. 2023, viewed 7 August 2023, https://www.drones.gov.au/drones-australia/benefits-drones-australia/
transport-and-logistics#:~:text=Drones%20have%20the%20potential%20to,Deloitte%20Access
%20Economics%2C%202020
). Department of Infrastructure, Transport, Regional Development, Communications and Arts, Economic Benefit Analysis of Drones in Australia, viewed 7 August 2023,
https://www.infrastructure.gov.au/sites/default/files/documents/economic-benefit-analysis-of-
drones-to-australia-final-report.pdf#page=43
Nex, F., and F. Remondino. 2014. “UAV for 3D Mapping Applications: A Review.” Applied Geomatics
6 (1): 1–15
The Australian Industry Group, 2021-2022, Australian Supply Chains: State of Play, AI Group, viewed 7 August 2023, https://www.aigroup.com.au/globalassets/news/reports/2021/supply_chains_state_of_play_dec20
21.pdf
THE POTENTIAL IMPACT OF DELIVERY DRONES IN THE AUSTRALIAN CAPITAL TERRITORY Prepared by AlphaBeta for Wing. (2018). Available at: https://www.infrastructure.gov.au/sites/default/files/migrated/aviation/technology/files/
submission-25-3-files_1811_alphabeta-report_drones-in-the-act.pdf
.
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