Analysis of Commercial Drone Use in Business and Commerce

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TO STUDY THE IMPACT OF DRONES IN BUSINESS AND COMMENCE

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TABLE OF CONTENTS
INTRODUCTION........................................................................................................................3
LITERATURE REVIEW................................................................................................................ 4
DRONES................................................................................................................................4
COMMERCIAL APPLICATIONS OF DRONES...........................................................................5
USES OF DRONES BY VARIOUS ORGANIZATIONS.................................................................6
IMPACT OF COMMERCIAL DRONES ON SOCIETY.................................................................7
CHALLENGES OF USING DRONES FOR BUSINESS PURPOSE..................................................8
REGULATIONS FOR OPERATING DRONES IN EUROPEAN UNION..........................................9
FUTURE SCOPE OF DRONES..................................................................................................9
METHODOLOGY AND DATA COLLECTION...............................................................................10
RESEARCH DESIGN..............................................................................................................10
RESEARCH APPROACH........................................................................................................11
RESEARCH PHILOSOPHY..................................................................................................... 11
RESEARCH AIMS AND OBJECTIVES.....................................................................................12
DATA COLLECTION TOOLS..................................................................................................12
RESEARCH SAMPLING.........................................................................................................13
DATA ANALYSIS TOOLS.......................................................................................................13
RESULTS..................................................................................................................................13
PRIMARY DATA FINDINGS.................................................................................................. 13
THE MAJOR BENEFITS OF IMPLEMENTING DRONES FOR DELIVERY SYSTEM.................14
PROBLEMS TO BE CONSIDERED FOR ENSURING EFFECTIVENESS IN USING DRONES.....15
FACTORS LIMITING THE DEVELOPMENT OF DRONES FOR USE IN DELIVERY SERVICE....16
PROBLEMS ASSOCIATED WITH THE DEPLOYMENT OF DRONES.....................................16
SECONDARY DATA FINDINGS............................................................................................. 17
DRONES BY AMAZON..................................................................................................... 17
RESPONSIBILITIES ASSUMED BY AMAZON FOR OPERATING DRONES............................18
COST AND BENEFITS OF OPERATING DRONES FOR AMAZON........................................18
STRATEGIC MANAGEMENT BY AMAZON PRIME AIR......................................................19
INCREASED CONSUMER PRIVACY CONCERNS................................................................20
PATENT FILED BY AMAZON............................................................................................ 21

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ANALYSIS................................................................................................................................ 23
CONCLUSIONS........................................................................................................................ 26
RECOMMENDATIONS.............................................................................................................28
REFERENCES........................................................................................................................... 30
APPENDIX............................................................................................................................... 37

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INTRODUCTION
The increase in the use of drones in commercial applications is capable of potentially
altering different industries. In this process of the change within the industry, the use of
drones would also have a significant impact on human behaviour and attitudes, thereby
impacting their daily lives. Drones have the potential of reshaping the thinking procedures
of humans regarding their physical environment as they have the ability to transport loads
and also collecting the data (Popper, 2015). However, the drones have been highly criticized
for being used in commercial purposes owing to the perception of it as a surveillance
instrument.
The research is highly focused on determining the emergence of commercial drones and its
impact on business activities. Commercial drones are being extensively manufactured and
used by various individuals and business organizations. The existence of the commercial
drones and their manufacturing and development is majorly inspired by the military
counterparts. However, the designs of the commercial drones are not similar to that of the
military drones, which are more expensive and huge. These drones which are being
extensively used for the commercial purposes are developed on a smaller platform by using
cheap and readily available components within the market. However, these drones are only
capable of lifting a weight which approximates four pounds.
The internet is also evolving continuously. The consumers are increasingly relying on the fast
and reliable doorstep delivery when it comes to online shopping, logistics, official shipping
of goods, and also getting personal packages. The businesses are making a substantial
investment in improvising the entire supply chain of the organization. This helps in making
the delivery procedure fast and efficient. There is also much technological advancement in
the building and use of drones in the area of delivering goods. The drones could be highly
beneficial in improving the accuracy of the delivery process, reducing the overall human
costs involved in the delivery and also accelerating the time required for undertaking the
delivery process.
The drones can be deployed efficiently in a wide variety of industries such as agriculture,
entertainment, delivery market and many other industries. This is possible due to their

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ability to carry multiple sensors, imaging equipment's and transmitters which help them in
performing highly complex tasks which might be otherwise dangerous and expensive. In
contrast to the numerous advantages, the use of drones for business and commercial
purposes is still affected by the lack of battery life of drones and also lack of existence of
regulations in several countries for defining its use by business entities.
In numerous countries, the industrial standards association and the other organizations
have been established with the objective of providing support for designing the drones and
also integrating them with the existing infrastructures. The drones are now being developed
extensively by focusing on their application within the market and also associating the same
with the different business models.
LITERATURE REVIEW
This chapter on literature review is being made with the objective of discussing the views
presented by different scholars in their journals and articles in the areas of use of drone
technology for businesses. The use of these articles has been helpful in determining the
extent to which the drones are helpful in accomplishing the operations of various
businesses.
DRONES
Drones are considered as the aircraft which are being operated without the existence of any
human pilot onboard. The drones are being controlled either remotely by the operation
who is situated on the ground or they are being controlled anonymously. Traditionally,
these drones were only operated for military purposes. However, the importance of drones
in the commercial sector is also increasing significantly.
The drones are also known as the autonomous aircraft which are capable of transporting
the small-sized packages to their destination by using the shortest available route and at a
higher speed, However, these vehicles are only capable of holding a single package at a
time. In a report issued by the DHL, Joerss et al., (2016) stated about the use of these drones
for logistics, it was argued that despite all the difficulties of implementing the drone system
and the introduction of the regulations which is restricting the use of drones, the drones
would be used extensively by nearly all industries in the near future and it would lead to

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benefits for them. The drones would not be able to replace the other forms of
transportation owing to its limitation of lifting weights. However, the drones would be in a
situation of saving a lot of congestion which would be otherwise involved in carrying out the
transactions even in the remote locations.
COMMERCIAL APPLICATIONS OF DRONES
The drones have been commercially used primarily for the purpose of surveillance and
inspections. Intelligence (2017) states that with the innovations in the technology and rapid
advancements in the preparation of drones, drones are being extensively used for
inspecting the pipelines, power lines, in rescue operations, undertaking land surveying,
forest fires and others. The drones are also capable of carrying other instruments, owing to
which they are also being used in the delivering of food, spraying crops in the farms and also
providing drugs, food and medical services to the inaccessible locations.
The drones are being extensively used for aerial photography as they are available with the
built-in cameras and also allow the installation of the lightweight devices within them. The
FAA has proposed regulations, which state that the commercial drones can fly only up to a
height of 400 ft. these drones are also required to be controlled by the pilots during their
take-off and landing in real time. Unexpected obstacles also need to be monitored by
human resources. Despite the huge set of requirements as proposed by the FAA, the drones
offer a wide range of applications in various market segments. The drones are being used
across a wide range of industries which include law enforcement, news production,
construction and movie.
Joerss et al., (2016) argued that efforts are also being made for the development of delivery
drones which would be capable of transporting the loads up to a capacity of 5 pounds. The
extensive use of the internet has enabled business organizations to gain more visibility in
terms of operations and also reduce the cost and distribution footprint. However, Accenture
(2015) argued that even with the rapid advancements in the use of technology, the
distribution and logistics are still dependent on the air and ground transportation systems.
Drones are capable of providing a new and innovative form of technology and thus are
contributing to changing the overall scenario. The new means and ways of changing the
transportation and delivery systems are being introduced by the Google and amazon prime

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air. It has also been declared by Amazon that after the approval of their prime air services,
they would be in a position to deliver more than 80% of goods by means of drones.
USES OF DRONES BY VARIOUS ORGANIZATIONS
The drones are being extensively used in the logistics industry for commercial purposes.
Many scholars had argued that the use of drones was highly futuristic and that the drones
were not an appropriate option for use in commercial and business sectors (Small Drones
Market by Application – 2020, 2016). The scholars had argued that the drones were only
suitable for use in the military sector. However, in the present scenario, many organizations
have started using drones for several other purposes.
Heisler (2015) argued that Amazon had developed the amazon prime air, which is still under
development and testing for numerous countries. These are specially designed drones
which could be used by the companies in delivering packages which weigh up to 5 pounds in
a time frame of fewer than thirty minutes. Also, these drones would be capable of covering
a distance of approximately 10 miles or more. Welcome to the Drone Age. (2015) argued
that the DHL has also developed an unmanned helicopter called parcelcopter. This drone as
developed by the DHL is capable of taking off and landing in automated version. DHL Parcel
Germany (2016) states that these drones also have the capacity of taking a payload of up to
2 kg and can be driven at an airspeed of 70 km per hour.
Under the parent Alphabet, Google has also developed a drone delivery system called
project wing. These drones have the capability of flying up to 400 feet above the ground
level. These drones can safely transport the fragile packages on the exact doorstep of the
customers. Adler and Kapoor, (2016) have given light on UPS has also developed drones
which are capable of handling the residential package deliveries. The roofs of the vans act as
mini-helipads for the drones, from where they can take off and gain altitude for reaching the
destination (Desjardins, 2018). The drones can fly for 30 minutes within the air and are
capable of carrying a weight of up to 10 pounds. Matternet, (2017) states that Matternet
Company is also conducting the tests of a model which has been designed partly as a
delivery van and partly as a helipad. The company has been able to do the same by entering

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into a partnership with Mercedes Benz. The drone deliveries are being utilized for the
delivery of e-commerce packages weighing up to four pounds in the region of Switzerland.
Despite the numerous advancements in the drone technology, Arnold et al., (2017) said that
time would be required to ensure the acceptance of such devices both by the public at large
and the statutory bodies. The customers should also be trustful in allowing the drones to fly
to their houses for the purpose of delivery. Thus, it has be said by Vogels (2014) that the
development of these drones by the multinational corporations would be helpful in
ensuring that the deliveries can be made instantly by adopting the shortest possible route.
The only concern with the development of this technology is the extent to which these
statutory regulations and public acceptance would be hindering the growth of the drones
market in commercial and business purposes.
IMPACT OF COMMERCIAL DRONES ON SOCIETY
The use of drones for the business and commercial purposes also has various impacts which
need to be taken into account. The major issues which need to be considered are the safety
and security, personal and commercial liability and also the privacy and ownership.
Safety and security
In the majority of the constitutions, safety and security are being considered as the major
concern and the government has taken up appropriate steps for ensuring that they are
protected and guaranteed. The use of drones in the civilian airspace also poses challenges to
these basic human rights. The concerns are both for users and technology. The flying of
drones in commercial spaces could harm the public at large due to their crashes along with
harm to public properties. The concerns related to the technology are the ability to lift
different objects, battery life and also the reliability of the drones. Drones also possess
threats, with regards to the attacks on its GPS systems. This could be either in the form of
spoofing or in terms of hijacking. The security of the payload which is being carried also
needs to be taken into consideration. Many critics have assumed that in the future the
drones can also be used for attacks on the civilian population.
Privacy and ownership

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A huge amount of information is carried along with the sensors and cameras within the
drones which operate within the private spaces. Sometimes, this information is more
valuable and easy to obtain. With the increase in the hacking and other illegal activities of
the drones and the substantial decrease in their costs, it is becoming easy for the individuals
to engage in surveillance activities at the expense of the privacy of other players. The
privacy is also a major issue for those private properties which are to a larger extent visible
from the public spaces. Drones have the capability of capturing sound and images from
places which are not accessible to the public at large. This might have an impact on the
privacy of the individuals owing to the increased possibilities of unwarranted surveillance.
Personal and commercial liability
The drones are subject to numerous liability and coverage issues in their commercial uses.
This means that the drones are affected by the complexity of various factors comprising of
the uncertainty in the privacy laws, the numerous accidents and also the procedures of
control on air. Majority of the drones are operated within the highly habited regions. This
leads to issues such as an invasion of privacy and also personal injury. The guidelines
proposed by the FAA are also not capable enough of dictating the coverage policy for
personal injury and damage, commercial and personal liability and also privacy issues.
CHALLENGES OF USING DRONES FOR BUSINESS PURPOSE
The drones are in the developing stage of the product life cycles. Hutchinson, (2016) argued
that drones have still not been introduced in all the countries for use in business or
commercial purposes. Only the well-established multi-national corporations, which have
huge revenues, are capable of mainlining drones for delivery of goods as a part of their
logistics operations. Drones have in-built cameras, which are being used for capturing the
location of the customers. This leads to several concerns for the public and company with
regards to privacy . The risk of information being exploited by the users is extremely high in
such situations. In cases, if the drones malfunction or are defective, then it would lead to
disruptions in the delivery process, thereby leading to losses for the company.
The announcement made by the NYPD regarding the launch of emergency and surveillance
drones has made issues regarding the privacy of the public. The drones also have shorter
endurance capacity. It has also been argued by (Overcoming Last Mile Logistics Challenges,

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2016) that the majority of the drones could carry a weight of up to five pounds, while a few
others can bear a payload only up to five pounds. In situations when the drones carry a huge
payload, it leads to a reduction in the speed of drones. Many drones are also affected by the
reduced battery life, as the battery of the drones drains out within a fraction of minutes
after their launch. The retail companies would have to face huge losses if the battery runs
out of its capacity even before the product is being delivered to the intended user.
REGULATIONS FOR OPERATING DRONES IN EUROPEAN UNION
In the European Union, a detailed set of regulations has been provided with the objective of
regulating the operations of drones. Jenkins and Vasigh, (2013) stated that the regulations
for the use and operations of drones have been provided by the European aviation safety
agency in the notes which have been titled as “the proposed concept of operations for
drones”. This note has been prepared with the objective of ensuring that a regulatory
framework is being laid down for the manufacturers and operators for the operation of
drones. The drones are divided majorly amongst the specific drones, open drones and
certified drones based on their nature and purpose. Also, McFarland, (2016) states that
specific drones can only be operated after getting approval from the aviation authority for
its approval. These operations are subject to certain specific limitations. In contrast to this,
Newcomb (2015) said in his studies that open drones can be operated without any
authorization by the authorities. The FAA regulations categorize the drones based on their
shape and size. The drones are also being categorized based on the risks associated with
operating the same. The regulations majorly relate to certifications and licences, therefore
special permissions are required for the same (United Parcel Service of America, 2017).
FUTURE SCOPE OF DRONES
The regulations have been set out by the federal aviation administration which needs to be
adhered by the drone manufacturing companies in the United States. The FAA has also
developed a report which stated that the use of drones is forecasted to increase
substantially in the coming years. In contrast to this, it was also stated by Wilcox (2016) that
numerous drones have been registered on the official website of the FAA. However, the
business organization faced difficulties in implementing the usage of these drones owing to
the lack of trained and licensed pilot and also the lack of clarity.

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The latest reports as proposed by the FAA have stated that the commercial drones do not
need any license for operating within the commercial spaces. The introduction of this
regulation has provided the business with various opportunities for expanding their drone
operations.
It has also been argued by McNabb. (2015) that the drones could be widely used in the
agriculture sector, and the farmers would be benefitted in terms of identifying the health of
the plants, mapping the land and also for undertaking irrigational activities. The drones are
the less expensive devices, which can even be used by the farmers for spraying water and
fertilizers, which would be further beneficial for the farmers in saving time and money. Mac,
(2015) argued that drone delivery is also an upcoming area, where drones would be used
extensively. This would be beneficial for the companies in ensuring that the drones can be
utilized for delivering the goods to the end consumers in a limited amount of time and also
helps in saving the costs of operations.
Cooper (2015) has highlighted the use of drones in the construction industry. In this
industry, the drones help in providing the footage and property images, which help in the
preparation of the 3D structures which the contractors are planning to build. The drones are
also useful in creating better internet infrastructure for the business within the developing
countries.
METHODOLOGY AND DATA COLLECTION
With the objective of conducting the research on the impact of drones in business and
commercial purposes, the research onion model is being used. This method facilitates to
conduct the studies in a sequential and logical manner. This model states that the research
process must start by the identification of a research approach, research philosophy,
research strategy, data collection and data analysis in a sequential manner.
RESEARCH DESIGN
The various types of research design which could be used in the research project are
explanatory, descriptive and exploratory. This research would be making use of the
explanatory design for primary data collection and the exploratory research for secondary
data collection (Schoonenboom and Johnson, 2017). The explanatory research would be

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helpful in providing the analytical view of quantitative data collected and the exploratory
research would be beneficial in forming our personal insights regarding the use of drones.
RESEARCH APPROACH
The most commonly used research approaches are the inductive and the deductive
approach to undertaking the research studies. The inductive research is focused on
qualitative aspects of the study and also includes the perception and attitude of human
beings towards a particular subject. The deductive approach focuses on testing the
hypothesis and is used majorly for undertaking the quantitative data analysis (Zalaghi and
Khazaei, 2016).
This research would be made by adopting the deductive approach of research as the
research has been aimed at determining the future of drones. This would enable the
researcher to collect the data from the perspective of the Amazon with regards to the usage
of drones for commercial and business purposes (Daugherty et al., 2016). This has helped in
establishing a relationship amongst the development of commercial drones and its
utilization for the business and commercial purposes. This would also help in deriving the
results for the whole universe just by examining the case of the Amazon for the purpose of
using drones for delivery services.
RESEARCH PHILOSOPHY
The various types of research philosophy include realism, positivism and interpretivism. The
interpretivism approach is focused on analysing the perceptions of the people on a
particular topic. The positivism philosophy is related to test the pre-established hypothesis
based on certain quantitative data. This approach does not take into consideration the
feelings of individuals (Hughes and Sharrock, 2016). The pragmatism philosophy is a mix of
quantitative data and the perception of the individuals for the same.
This research would be based on the positivism philosophy as it would facilitate the
collection of reliable and accurate primary and secondary data. This method is highly
structured and helps in analysing the trends in the usage of drones. This would also ensure
that the data collected is free from all kinds of biases (Singh, 2015). This research has not
adopted the interpretivism approach as it is not that reliable and the subjective