MGT807 Entrepreneurship: DJI Drone Market Analysis Report

This report provides an in-depth analysis of the DJI drone market, examining its market share, key players, and the impact of drone technology. It explores DJI's market entry strategies, including foundations rights, work opportunities, advertising, and networking. The report delves into DJI's financial model, highlighting its revenue and funding sources, and discusses the barriers the company faces, such as technological, regulatory, and market challenges. It concludes with key findings and takeaways, emphasizing the importance of innovation, strategic market entry, and addressing obstacles to maintain a competitive edge in the rapidly evolving drone industry. The report covers DJI's market advantages, including its manufacturing capabilities and partnerships, while also acknowledging the issues it faces. The report also provides a detailed account of the commercial drone market and the impact of DJI in the market.

Running head: INNOVATIONS AND TECHNOLOGY
INNOVATIONS AND TECHNOLOGY
Name of Student
Name of the University
Author Notes

1INNOVATIONS AND TECHNOLOGY
Executive Summary
The purpose of the report is to evaluate the drone market of DJI and its industry. Drones have
major impact on the market share and will increase in the upcoming years. It can be
perceived that drones have several uses including commercial, scientific, agricultural,
recreational and other applications. DJI entered the new market by using certain market entry
strategies such as foundations right, work opportunity, advertising through channels,
networking for growth, recognizing the marketing policies. DJI has the highest market share
in the global drone market. Based on the analysis, it can be perceived that there are several
barriers in the DJI drone market such as tech technological, regulatory and market barriers,
which can be solved by investments for new technologies and through continuous research
and development.

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Table of Contents
Introduction................................................................................................................................3
Market and key players of DJI...................................................................................................4
Key players.............................................................................................................................7
Market entry strategy of DJI......................................................................................................7
Financial model of DJI drones...................................................................................................9
Barriers in drone market of DJI...............................................................................................10
Findings....................................................................................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................13

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Introduction
Drones are one of the most important technology in today’s world. It is an aircraft
without human pilot, a type of an unmanned machine. Drones includes a controller on the
ground and communication system device inbuilt for communication. Drones, also known as
unmanned aerial vehicles (UAV) are made from light materials, which improves their
manoeuvrability when flying, reducing their weight (Dupray & LeBlanc, 2017). Drones are
often used by the militaries and army and can be equipped with additional equipment’s such
as cameras, GPS guided missiles, Global Positioning System (GPS) and so on. Drones are
controlled by software or by remote. Drones have plenty of application areas (Zeng & Zhang,
2017). With the growing technology, use of drones are expanding massively. Drones are
mostly used as a military device, however, the use of drones are expanding to other sectors
which includes commercial, scientific, agricultural, recreational and other applications .
Drones are used for policing and surveillance, product deliveries to the remote areas, aerial
photography, and inspection of infrastructures, prevention and surveillance of smuggling,
smuggling and drone racing. This report will be focusing on Z DJI, one of the key market
player in the drone industry.

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Fig 1: Drone
DJI drones are best popular in searching and rescuing operations. It can provide
security to a people during emergencies (Grogan, Pellerin & Gamache, 2018). Major systems
like turbines, power lines are inspected with drones. Drones can create 3D maps of an area
using the multi special camera and laser scanners. Drone can be used to observe the different
climate condition and environment in the sky. It can also document the nuclear accidents,
volcanic eruptions and glacier surveillance.
Market and key players of DJI
DJI drones comes with advanced data security technology, which aid them to capture
the market more effectively. DJI drones have best quality services with very low repair cost.
DJI drones. DJI are improving its customer relation by improving customer service,
increasing its brand reputation with quality drones. Over the past few year, DJI drones made
a key impact in the commercial global market. The demands for their high quality drones are
increasing day by day therefore it is essential to perceive the market of drones (Medlin,
Vannoy & Eggers, 2018). The global commercial drone market is valued at 5.80 billion
dollars and approximately 276 thousand units are sold globally in 2018. DJI drones have the
highest drone market share (8%) and their market is growing tremendously. It is forecasted
that the Compound Annual Growth Rate (CAGR) of the global market will be at 18.83% to
66.93 billion dollar in 2025(Walia, 2019).

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Fig 2: Global market
DJI fetched 66% of North American market share for the drones priced below $1000 and
67% of share for drones priced below $2000-$4000 (Xu & Muneyoshi, 2017). The industry
of DJ drones are as follows.
 Consumer drone shipments for personal use will hit 40% in 2020 to $2.8 million.
 The Government drones, DJI has provided government edition drones with
complete data control and they have provided 600 Mavic pro drones, which were used
in 1500 security operations.
There are several key factors for the increase of demand of the UAV devices of DJI.
Factors which includes the UAV venture funding includes; technological developments,
rising application in commercial sectors, 3D mapping and drone delivery; are expected to
subsidize to market growth (Amorim et.al., 2019). DJI serve their customers with best quality
drones in competitive price. They have retail store and online store to meet the market
demands. DJI has good market advantages over other companies, as they own several
manufacturing funds in Shenzhen. Several issues are also present in the market of DJI, which
will be discussed later on.

6INNOVATIONS AND TECHNOLOGY
In 2016, the total sales of DJI has exceeded $1.45 billion. This is primary because of the
increased demand and quality products. The increased demand for drones is mainly as drones
provides enhanced productivity through graphical visualization and aids to reduce the cost of
the project (Glaser, 2017). Drones impacted economic value of DJI positively. DJI captured
the market with phantom and Mavic pro devices which are known for aerial photography.
DJI provides these products inn cost effective price. DJI represented 36% of its market share
in drones, which are being used for camera purposes. In this price range, other manufacturer
failed to provide drones. This aided DJI to capture the market share more effectively. Across
North America, DJI represented 50% of the global market share. DJI has partnered with Sony
for camera devices and Microsoft for software devices used in drone. To capture the market
share, DJI aggressively cuts the price of its products. The growth in global drone market is
expected to continue massively and it is expected that this market will grow almost three
million units and $6 million revenue this year.
Fig 3: Drone market by type
Key players
Several key market players are operating the military UAV market and commercial
some of the prominent players in the market are Terra Drone Corporation, Parrot SA, Yuneec
International, and DELAIR. The Parrot (France), Aeryon Labs (Canada), 3D Robotics (US),
are the major players of commercial UAVs and General Atomics (Khillari, 2020). DJI

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provides drones for the commercial and military areas. DJI is one of the leading key player in
the UAV markets. This company provides diversified ranges of products such as UAV
platforms; sensor system and ground combat situations. DJI is the chief contractors of drones
for the US armed forces and creates their revenue from the sale of UAV devices such as
predator and sky guardian (Intelligence, 2016). DJI holds a major share globally, due to its
sales of UAVs for aerial photography and videography, like Phantom 4 Pro, Mavic Series,
and Spark.
Market entry strategy of DJI
Marketing strategy is what one want to achieve with their drone advertising. Augmented
commercial use of unmanned aerial systems (UAS) which is also known as Drones grants
many business openings such as in construction, farming, and security and so on. There are
also growing demands for Drone operators. The key marketing strategies of DJI are as
follows.
 Foundations right
 Work opportunity
 Advertising through channels
 Networking for growth
 Recognizing the marketing policies
 others
These strategies are discussed below which will aid to understand the impact of drone
market.
1. Foundations rights-
The industry, which is opening their drone market for commercial purposes, needs to
go through Small UAS rule, which is commonly referred to as ‘Part 107’. The

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industry also needs to obtain the necessary certificates provided by Federal Aviation
Authority i.e. FAA approved knowledge-testing center as flying a drone without
essential qualification can have serious consequences. Drone operators will also have
to keep up with changes in the law to guard their business reputation.
2. Work opportunity
One should not expect work would approach itself to them. To industry needs to
convince their potential customers about the benefits of using a UAS by
demonstrating a drone’s abilities such as showing examples of images a drone
captures from the air.
They must be prepared to be proactive and overcome objections for economic benefits
from a drone business. To improve the market operation afterwards, sales training
should be taken.
3. Advertising through channels
Website is a great tool for displaying aerial photographs and video footage for a drone
operator. DJI uses websites to forecast their products in the market. With a website,
DJI can provide contact info, samples of the work, an overview of the Company etc.
information’s to the potential customers.
4. Networking for growth
DJI should make contact with local business such as with construction companies real
estate agents, insurance companies for aerial photographs. The drone market operators
must link local business networking groups and get to know their local market.
Making contact with other commercial drone operators is also very important for
growth (Baloch, & Gzara, 2020).
5. Recognizing the marketing policies

9INNOVATIONS AND TECHNOLOGY
The need for commercial drone pilots is increasing and therefore recognizing the
marketing policies are crucial. Without proper understanding of market policy, DJI
cannot enter the market.
6. Other strategies
DJI drones also follows other strategies to enter the market effectively which includes
making professional record visible, deciding proper marketing outlet, developing the
trust multiplier that is the customers testimonials which will smoothen the market
entry process.
Financial model of DJI drones
.As per the recent reports, DJI tops other competitors with a revenue of $2.9 billion.
DJI raised its capital from funding’s. They received $105 million funding for the product
improving and services. DJI had a hard time until 2008 as they were not being able to receive
enough funding’s from the investors. As per the balance sheet of 2009, it can be observed that
DJI had huge amount of revenue boost in their organisation. DJI got $ 1 million is sales in the
year 2009 which was increased to $130 million in the year 2013.DJI sold more than 2 million
products in 2018 which aided them to earn revenue worth $15 billion (Popper, 2015). From
the financial data analysis, it has been found that DJI primarily collect the funds from its
shareholders. From the cash flow statement of the organisation, it has been found that the
working capital and net income of the company has been increased massively over the past 5
years. DJI was valued at $8 billion in 2015 when it raised $75 million from its investors. The
market share of DJI has been increased with the production improvement. The market share
has been increased to 72% in 2017 to 74% in 2018 and it is expected that DJI will acquire
90% of the billion dollar drone market by 2020.

10INNOVATIONS AND TECHNOLOGY
Barriers in drone market of DJI
Drone market are growing massively over the past few years and researches show that it
will have large market share in 2025 however, there are many obstacles that limits the
adoption of drone based solution (Atwater, 2015). The obstacles of drone based adoption are
mentioned below
 There are plenty of technological barriers coming in way of DJI drone market. These
barriers limit the market from creating new business opportunities. This includes in
having navigation issues, remote piloting, object avoidance and continuous flight.
These barriers needs to be solved in order to expand the drone market (Frederiksen &
Knudsen, 2018).
 Drone market of DJI often face financial barriers, which affects their market entry and
technological development.
 DJI also faces Safety issues are one of the most significant barriers that blocks the
adoption of drone in different sectors. Regulations influence the people’s desire for
technology. Barriers of BVLOS and autonomous flight prevents the introduction of
drones to the industry.
 DJI often face substantial market entry barriers. They fails to get the necessary access
to channels, which will enable them to develop and provide technologies to the
market. These barriers can be improved by investments. However they are trying to
improve their channel through suppliers, online stores, and sale events.
 Drones and their payload can cause barrier to market of DJI. Their payload often fails
to withstand harsh environment condition. To overcome this situation, they are
improving drone through research and development, software development and
network development.

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Findings
From the study based on drone market, it can be perceived that the drone market is
significantly increasing globally and the DJI will be the leading global drone company in this
industry. DJI can undertook certain market entry strategies such as networking for growth,
recognizing that marketing policies to enter the market effectively. It can be perceived that
there are certain barriers in the DJI market such as contextual barriers, financial barriers,
market barriers, regulatory barriers and technological barriers. From the financial model, it
has been found that DJI will acquire most of the global market by 2020 as they have huge
investments and revenue. Some key players are also operating the drone market including DJI
and 3D Robotics.
Conclusion
On a concluding note, it can be stated that the drones are one of the most useful
innovation, which can be used for policing and surveillance, product deliveries to the remote
areas, aerial photography, and inspection of infrastructures, prevention and surveillance of
smuggling, smuggling and drone racing. DJI is one of the leading drone market operator,
which acquired the drone market, and several barriers are affecting their market growth.
From the report, the growth of revenue of DJI can be perceived and it can be stated that DJI
will acquire the drone market globally by 2020. These barriers can be improved by
investments in the market, which will improve the technology. Despite of these challenges,
the implementation of drone market will continue to increase over the years.

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References
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Forecasting Spectrum Demand for UAVs Served by Dedicated Allocation in Cellular
Networks. In 2019 IEEE Wireless Communications and Networking Conference
Workshop (WCNCW) (pp. 1-6). IEEE.
Atwater, D. M. (2015). The Commercial Global Drone Market. Graziadio Business
Review, 18(2).
Baloch, G., & Gzara, F. (2020). Strategic Network Design for Parcel Delivery with Drones
Under Competition. Transportation Science.
Dupray, D. J., & LeBlanc, F. W. (2017). U.S. Patent Application No. 15/224,497.
Frederiksen, M. H., & Knudsen, M. P. (2018). Drones for offshore and maritime missions:
Opportunities and barriers. SDU Cent. Integr. Innov. Manag.
Glaser, A. (2017). DJI is running away with the drone market. Recode, April, 14.
Grogan, S., Pellerin, R., & Gamache, M. (2018). The use of unmanned aerial vehicles and
drones in search and rescue operations–A survey. Proceedings of the PROLOG.
Intelligence, B. I. (2016). The drones report, market forecasts, key players and use cases, and
regulatory barriers to the proliferation of drones.
Khillari, S. (2020). Utility Drone Market Analysis| Recent Industry Trends Report, 2026.
Medlin, B., Vannoy, S., & Eggers, A. (2018). PRIVACY, SECURITY AND LEGISLATIVE
ACTIONS RELATED TO DRONE USAGE.
Merrell, T. W. (2018). Evaluation of Consumer Drone Control Interface.

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Popper, B. (2015). DJI is about to become the first billion-dollar consumer drone company.
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Walia, K. (2019). Global Counter Drone Market Size, Share, Trends| Industry Report, 2026.
Xu, F., & Muneyoshi, H. (2017). A Case Study of DJI, the Top Drone Maker in the
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Zeng, Y., & Zhang, R. (2017). Energy-efficient UAV communication with trajectory
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