Virtual Reality is a rapidly advancing technology that initially began it's life as an entertainment product but has rapidly grown into other areas such as healthcare, education, live events and military. While there is massive scope for VR, the technology is still in it's infancy and there are avenues for improvements in the future which could allow it to expand and capture larger segments of the market. Our team selected the VR company Oculus for our case study and conducted various market based analyses such as SWOT Analysis, Scenario Analysis, Porter’s 5 Forces for Strategy, PESTEL Analysis, BCG Matrix, Ansoff Matrix and Fishbone analysis to propose a strategic roadmap for future VR products and services.

1. VIRTUAL REALITY
MARKET ANALYSIS
IT Issue Presentation
Guided by Distinguished
Prof. Michael Parfett
Presented by Team 4
Varsha Kodekoppa
Mohit Mhapuskar
Akshay Kirolikar
Chujing Liu

2. Virtual Reality - The Concept
"Virtual" has the meaning of "being something in essence or
effect, though not actually or in fact". The term "virtual" is used
in the computer sense of "not physically existing but made to
appear by software".
Morton Heilig, a cinematographer from the 1950s, wrote of an
"Experience Theatre" that could encompass all the senses in an
effective manner, thus drawing the viewer into the onscreen
activity. He built a prototype of his vision dubbed the
Sensorama in 1962, along with five short films to be displayed
in it while engaging multiple senses (sight, sound, smell, and
touch).
Morton Heilig is widely considered to be the father of Virtual
Reality, with the Sensorama considered to be the first Virtual
Reality Device.

3. Introduction
Virtual reality: A computer graphic simulation technology that can create a virtual world and allow the user to experience
and interact with it.
Simulated environment
Dynamic 3D vivid images
created by the computer
Sensory perception
VR engages visual, auditory
and haptic perceptions of
humans.
Sensory devices
VR controllers, they can
understand the movements
and position of the user
Immersion
User feels like they are a part
of the simulated environment
Interactivity
The user can interact with
different parts of that
environment.

4. Evolution of Virtual Reality

5. Experiences in Virtual Reality
Playing
Interactive games
and entertainment
Immersive movies
and shows
Live concerts,
sports and other
events
Learning
Immersive and
interactive
education
3D design and art
Training and
demos
Communication
Social interaction
Shared personal
moments
Empathetic
storytelling

6. How Virtual Reality Works
At the heart of a quality VR experience is the headset – a
display mounted on the head of the end-user which blocks
out the physical world and displays an imaginary digital
world in its place. Two screens show into our eyes, your
brain puts these together to make a single image like your
eyes do. This then combined with the motion capture makes
it seem as if you are in the real world.
Once the headset is on, the user can use motion controls
such as gloves, remotes, motion controllers and body
movements to control their on-screen experience. As the
user looks around with his or her head, the scene will adjust
using motion controls.

7. Motion Controls
Apart from head tracking, VR ditches traditional game
controllers such as an Xbox gamepad in favor of
motion detecting controllers. The headsets still work
with traditional controllers though.
These controllers are easier to use with a VR headset
and also add to the interactivity in video games, where
in-game movements can be controlled by hand
movements.
The new versions in particular also utilize room
sensing technology to track the user’s physical
position in the room and register some of those
movements in the simulated environment.

8. The HTC Vive’s Room Sense Technology

9. Haptic Motion Controls
Companies like ManusVR and HaptX are
developing VR gloves which track hand and finger
movements and gestures. Each gesture and
movement is registered as a command in the
game.
The gloves also deliver haptic feedback. For
example, picking up an object in the game will
give the player a sensation of holding something
in that hand.
While the technology is still experimental, it has
massive scope that could change the face of VR
as we know it.

10. Case Study - Oculus VR
Oculus is a VR technology company founded by Palmer
Lucky in July 2012, based out of Irvine, California.
While there had been VR headsets before, they didn’t really
enter the mainstream until Oculus released the first
developer kit of the Rift HMD, following a successful
Kickstarter campaign which raised $2.4 million.
Oculus had recognized the major flaws in some of the
previous implementations of Head Mounted Displays and
tackled most if not all of these issues, thereby making their
vision for VR an instant success.
In 2014 Mark Zuckerberg announced that Facebook Inc.
would be acquiring Oculus VR for $2.3 billion.

11. Main products: Rift and Go

12. Oculus Rift
The Oculus Rift is Oculus’ main flagship VR
product and the first of new-gen VR HMDs to
hit the open consumer market.
The Oculus Rift is primarily targeted towards
PC gamers and requires a physical
connection to a PC to play games on it.
Priced at $399 USD combined with the
investment in a high-config PC to play
games smoothly means the Rift still targets a
relatively niche market.

13. Oculus Rift - Breakdown

14. Oculus Rift
https://www.youtube.com/watch?v=fnCmUWqKo6g

15. Oculus Go
The Oculus Go is a battery powered
standalone VR headset that does not require
a physical connection to a PC to operate.
It is primarily targeted toward more casual
VR users for multimedia purposes like
movies, tv shows, sports and less intensive
mobile games.
Priced at $199 USD, it is more affordable as
Oculus hopes the Go can capture more of
the VR mainstream market.

16. Oculus Go

17. Oculus Go
https://www.youtube.com/watch?v=v4eTJIbJYK4&index=5&list=
PLL2xVXGs1SP5Bzr1LtEtU5MVhl4f-syRf&t=0s

18. Product Comparison
Rift Go
Requires
(and run by)
Gaming PC
($850+)
Nothing
(standalone)
Price $349 $199
Target Audience Gamers Casual users
Controllers and
sensors
Motion controllers
+ Room sensors
Motion mouse
Hardware Specs High Low
Wireless ❌ ✔️

19. Commercial Applications - Games

20. Commercial Applications - Multimedia

21. Commercial Applications - Live Events

22. New Applications - Drones
One fun and growing application of VR is the
integration of VR headsets with drones.
The VR headsets are provided a live feed from a
360 degree camera fitted onto the drone, giving
the users a surreal experience.
Popular drone companies such as Parrot and
Promark have touted VR as completely
revolutionizing the way people experience
drones.

23. New Applications - Education
VR has seen growing use at schools to
colleges to provide new education experiences
to students.
VR could be used to teach interactive subjects
like biology, physics, mechanical engineering,
game design and so many more.
VR could also be used to enhance the
experience of a virtual classroom, making
remote learning almost as interactive as a live
classroom.

24. New Applications - Healthcare
VR has also seen a growing number of use cases
in the field of healthcare and medicine for both
doctors and patients.
For patients, VR could be used for applications
like remote therapy, PTSD rehabilitation,
schizophrenia therapy and even treating disorders
like chronic anxiety.
For doctors, VR could be used to train new
resident doctors by simulating different surgeries.
Doctors can also use VR to observe live surgeries
upclose for useful information.

25. VR Market Growth & Segmentation

26. AS-IS/TO-BE Analysis - Business Strategy
AS-IS
● VR is primarily used by gamers with
a steadily increasing space into
other forms of media such as movies
and tv shows.
● VR currently only has major
applications in the entertainment
sector.
TO-BE
● VR headsets become an all-in-one
entertainment solution used by
gamers and casual users alike.
● VR develops a secure foothold in
other application areas such as
education, science, military, art and
even business.

27. AS-IS/TO-BE Analysis - Business Strategy
AS-IS
● VR content is still limited. Production
of VR content requires separate
equipment and processes,
introducing additional costs.
● VR headsets are still expensive by
today’s standards and widely viewed
as a toy or a gimmick, only
appealing to a niche market.
TO-BE
● Reducing prices combined with
increasing flexibility allows all
content to be developed with VR
support, furthering consumer growth.
● VR headsets are a lot more
affordable, coming into the
mainstream and appealing to a
much larger market.

28. AS-IS/TO-BE Analysis - Business Strategy
AS-IS
● Oculus manufactures the headset
and provides developers and other
content providers with guidelines on
how to develop content for the
headsets.
● Oculus manufactures its own motion
controllers that work together with
the VR headset to increase the
immersion factor.
TO-BE
● Oculus works more closely with
developers and content providers to
optimize content further for VR and
use that information to improve
future versions of the headsets.
● Oculus partners with proven
controller manufacturers such as
Sony or Microsoft to produce higher
quality and more ergonomic motion
controllers.

29. AS-IS/TO-BE Analysis - Technology Strategy
AS-IS
● For gamers, the recommended
specs of PCs needed to support
games on VR are high and ergo
expensive, presenting a significant
barrier to entry.
● The Oculus Rift still needs a physical
connection to a PC, limiting its
portability.
TO-BE
● The minimum PC specs required to
work with the headsets reduce,
thereby reducing price and
increasing adoption.
● Games can be rendered on the PC
and then streamed wirelessly onto
the VR display, allowing for greater
freedom of movement.

30. AS-IS/TO-BE Analysis - Technology Strategy
AS-IS
● As games still have inconsistent
frame rates and a fair amount of
input lag, prolonged usage results in
cyber sickness (or motion sickness).
● VR headsets are limited by
resolution limitations of displays that
are available today, hindering the
visual fidelity offered by VR.
TO-BE
● Games are well-optimized for the
platform to have higher consistent
frame rates and negligible input lag,
allowing for longer use of the
headsets without side effects.
● As higher resolution displays
become available and more flexible,
Oculus uses these displays to
provide a higher quality immersive
experience.

31. AS-IS/TO-BE Analysis - Technology Strategy
AS-IS
● Portable headsets such as the
multimedia focused Oculus Go have
limited battery life.
● VR headsets are still imperfect
ergonomically, with the weight of the
headsets making prolonged use
uncomfortable.
TO-BE
● Increased battery capacity with more
efficient power consumption allows
for more portability.
● Lightweight materials are more
readily available and feasible in
construction allowing for longer
usage comfortably.

32. SWOT Analysis
STRENGTHS
● Immersive experiences
● High visual fidelity
● More Interactivity in games
● Integration with motion controllers
● Market appeal
● Simulation of environments
● Remote experiences from home
WEAKNESSES
● Discomfort after longer usage
● Motion sickness
● Expensive
● Demanding compatibility requirements
● Limited VR content
● Still viewed as niche product
OPPORTUNITIES
● Potential healthcare applications like remote
therapy, observing surgeries.
● Military applications like weapon simulations
● VR in drones
● Construction or architecture
● Education applications like virtual classrooms
● Virtual business meetings or conferences
THREATS
● Substitute products such as augmented reality,
mixed reality, mobile VR.
● Social apprehension

33. Mintzberg’s 5 P’s for Strategy
● Plan: Development of Strategy in
advance with purpose.
● Ploy: Ways to outsmart or outmaneuver
the competition.
● Pattern: Successful aspects of the past
can lead to success in the future.
● Position: The way an organization
relates to its environment and how it
uniquely positions the product.
● Perspective: Organizational culture and
collective thinking on strategic decision
making

34. Mintzberg’s 5 P’s for Strategy - Oculus
Plan
● Increase market share
by appealing to wider
audiences.
● Improve future VR
content by working with
developers and content
providers.
● Further streamline
products in terms of
ergonomics and
accessibility.
Ploy
● Patent certain
features or display
technologies to
prevent competitors
from using them
● Compete using
exclusive
partnerships with
retailers, game
companies.
● Compete on basis of
accessibility or price.
Pattern
● Analyze patterns in
customer feedback
to determine
positives and
negatives.
● Use feedback from
first iteration
product lines to
improve successive
iterations.
Perspective
● Use an organic
organizational structure to
increase autonomy and
encourage innovation in
the workplace.
● More cross functional
teams will allow
employees to work and
gain insights in different
aspects of the VR headset
production process.
Position
● Leverage position in
VR marketplace to
push VR into new
applications such as
education, military.
● Oculus can use it’s
first-to-market
position to drive
competitive
advantage for its
products.

35. PESTEL ANALYSIS
● Political: Variable taxation rates and duties
can make VR products very expensive in
some countries. Must follow import/export
laws too.
● Economic: Must target customers with
good purchasing power. May not perform
well in developing countries
● Social: Can encourage more multiplayer
VR use to push VR gaming as social
activity. Alleviate real-world detachment
concerns.
● Technological: High quality visuals. New
level of Immersion for user.
● Environmental: Use more eco-friendly
materials in construction.
● Legal: Must follow proper safety rules and
labor laws during manufacturing and

36. ANSOFF Matrix - Oculus
Market Penetration
Oculus’s flagship Rift is PC
focused. Oculus can focus on
optimizing wider compatibility
with other platforms like Xbox
or Playstation.
Market Development
Oculus can better market it’s
multimedia focused Go
product line to capture
dominance in the more
mainstream VR market.
Diversification
Oculus can manufacture new
VR product lines for other
markets like healthcare and
education.
Product Development
Oculus can use feedback from
its previous product line to
make improvements in its next
generation of products.
Existing Products New Products
NewMarkets

37. Strobe-Strois Matrix - Oculus
● Oculus’ entire business is based on
using the Virtual Reality Technology
to deliver new experiences to users.
● Every step of the company’s life cycle
ranging from conception to
foundation to expansion has been
driven by the promise of Virtual
Reality as a technology of the future.
● Leverages its own capabilities and
expertise in VR to deliver next
generation products.

38. BCG Matrix
Oculus Rift, Go
Sony Playstation VR
HTC Vive
Others (HP, Dell, Lenovo,
Acer)

39. Porter’s 5 Forces - Oculus
Power of suppliers: LOW
● High competition among suppliers
● Low concentration of suppliers
● Low cost of switching suppliers
Power of Buyers: MODERATE
● Growing number of customers
● Limited Buyer choice
Threat of substitutes: MODERATE
● Limited number of substitutes.
Ex: Google Cardboard,
Mobile VR, Gear VR
Threat of New Entrant: LOW
● High capital requirements
● Cutting edge technologies required
● Strong distribution network required
● Patents limit new competition
Competitive rivalry: HIGH
● Although there are limited competitors,
the competition is fierce amongst them
Ex: Sony, HTC, Windows VR partners.

40. Capability Maturity Model - VR Development
CMM 1 (Initial Level)
Development processes not defined. No documentation.
CMM 2 (Repeatable Level)
Basic processes documented. Success can be repeated.
CMM 3 (Defined Level)
Standard development procedures established. More focus on documentation and integration.
CMM 4 (Managed Level)
Use data collection & analysis to monitor and control development processes.
CMM 5 (Optimized Level)
Processes constantly being improved by monitoring feedback from current processes.

41. Fishbone Analysis - AS-IS
VR in
Infancy
Cost
Ergonomics
Compatibility
Marketplace
Content
Social
Platform investment
required
VR Headsets are
expensive
Headsets are heavy
Motion sickness after
prolonged use
Unintuitive motion
controls
Most headsets PC
focused, insufficient
console support
PC config
requirements too high
Content development
for VR is expensive
Niche marketCurrently viewed only
as entertainment
product
Insufficient VR
libraries for games or
moviesContent is often ported
from pre-existing
traditional content. Not
VR optimized
Not enough VR
content producers
Concerns about
detachment from reality
Apprehension for adopting
new technology
Concern about side
effects to health

42. Fishbone Analysis - TO-BE
Improved
VR in the
future
Cost
Ergonomics
Compatibility
Marketplace
Content
Social
Platform investment
cheaper
VR Headsets are
affordable
Headsets are lighter
Longer use without
motion sickness
Intuitive control
schemes
Universal support for
consoles and PCs
PC config
requirements more
reasonableContent development
for VR is streamlined
Wider market
Applications in more
variety of areas
Large libraries of games
and movies in VR
Optimized VR content.
Content made
specially for VR. Large amount of VR
content producers
Lesser concerns about
reality detachment
Technology is mainstream
now, increasing adoption
Concern about side
effects alleviated

43. Stakeholder Analysis
STAKEHOLDER ROLE RESPONSIBILITY EXISTING DESIRED
CEO Sponsor Construct a workforce and
culture that drives innovation,
as well as facilitate the
customer experience and
encourage business growth
Developing versatile products for
an untethered and immersive
digital entertainment
Designing goals to extend its
products to other industries like
education, military and health.
Top-Level
Management
Oversee Design goals to provide best
Oculus VR products with
advancement in technology
Undertaking managerial decisions
for the growth of company, which
initially started by crowdfunding,
and then acquired by Facebook.
CEO of Oculus has been moved
by management to PC division in
order to strengthen development.
Building a vision for the future of
gaming, entertainment, education,
etc by incorporating appropriate
business models and investing well
in hardware, technology and
research and development.

44. Stakeholders Analysis Continued
STAKEHOLDER ROLE RESPONSIBILITY EXISTING DESIRED
Investors/Shareholders Fund Provide funds in exchange
for an ownership stake in the
company.
Enabled Oculus to produce high-
end quality devices.
Increase their investment in Oculus
for improvised hardware and
software specifications in the
products.
Customers Purchase
Oculus
products
Enjoy the gaming and movie
watching experience and
provide feedback on them.
Although, feedback on the
gaming experience has been
good, it still needs to mitigate
challenges like the
requirement of a gaming PC,
headset being heavy, limited
motion tracking and other
hardware issues.
Design lighter headsets, provide
wider compatibility with other PCs
and provide greater field of view.
Employees Develop the
products
Developing quality VR
products to have a seamless
user-experience
Content with Oculus products like
Rift, Go, Gear VR and Quest
Scope for improvement in their
products in areas of technical
glitches.

45. Stakeholder Analysis Continued
STAKEHOLDER ROLE RESPONSIBILITY EXISTING DESIRED
Competitors Threat Compete Competing on developing
better products with better user
experiences and affordable
hardware requirements.
Increase its applicability to wider
audiences and increase the VR
content.
IT Provide platform
for VR to exist
and evolve with
time
Develop technologies to
support
Oculus constantly designed
and transformed its controls,
sensors, display and audio to
make it a quality experience for
its users
Requires better accuracy in
tracking and positioning and
better resolution.
Suppliers Provide supreme
quality sensors,
lens, mounts,
displays, etc.
Providing estimated
supplies to the company as
per requirement
Matches company’s
requirements
Provide improvised supplies with
evolution of technology.

46. Alternatives
● System augments the real world scene.
● User maintains a sense of presence in
real world.
● Needs a mechanism to combine virtual
and real worlds.
Augmented Reality

47. Microsoft HoloLens is a virtual reality
(VR) headset with transparent lenses
for an augmented reality experience.
According to Microsoft, HoloLens is a
“fully untethered, see-through
holographic computer.” HoloLens
allows users to experience 3D
holographic images as though they
are a part of their environment
Microsoft Hololens
Google Glass
Google Glass is Google's latest
product that hails a new generation of
tech gadgetry in the form of
augmented reality eyeglasses.
Google Glass is a wearable computer
featuring a head-mounted display in
the form of eyeglasses.

48. No Virtual Reality
● Monitors
● Theater screens
● Mobile screens
● Television

49. Alternative Analysis - AR vs. VR
Augmented reality adds
something to the existing
environment to enhance
the real world.
Augmented reality needs
the environment so just
use a camera integrated
in our devices such as
Smartphone, tablets,
PCs,.
Augmented reality is
having more acceptance
in formation and
marketing field.
Virtual reality actually
creates an entirely new
artificial world.
Virtual reality needs the
opposite, a device which
can fully isolate us in
virtual world, this is,
specific devices.
Virtual reality is better for
video-games and other
leisure options.
Augmented Reality Virtual Reality

50. Alternative Analysis
Factors Augmented Reality No Virtual Reality Virtual Reality
Cost High Low Medium
Security Risk High Low High
Immersive experience High Low High
Hardware
Requirements
High Low High
Marketplace Medium High Low

51. Recommendations
● Virtual reality and augmented reality are
similar in the goal of immersing the user,
though both systems do this in different
ways.
● Both AR and VR will be a success in future.
● AR may have more commercial success,
while VR is a new technology and is
emerging fast.
● Both technology is becoming cheaper and
more widespread.
● We can expect to see many more
applications for both the technologies in
the future in the fields of Business,
Healthcare and even change the way we
communicate.

52. Next Steps
# Description Assigned To Target Issues
1 Planning and Initiation
● Research
● Scheduling
● Budgeting
● Resource planning
● Identifying risks
● Building a team
Project Management, Office, Project
Managers
20 days Staffing
2 Defining requirements
● Identifying goals
● Finalizing specifications
● Listing tasks
● Assigning
responsibilities
Project Managers, Functional
Managers
20 months Planning milestones and
deliverables, staffing

53. Next Steps Continued
# Description Assigned To Target Issues
3 Software Development
● User experience planning and user
● interface design
● 3D design and development
● Virtual Reality development and
mobile
● development
● Weekly project status updates
● Quality assurance
● User acceptance testing
R&D Team, QA Team 20 months Developing
4 Launch and Iteration
● Project deployment
● Client training
● Post-project review and feedback
● Measurement and reporting
● Iteration
R&D Team, QA Team 3 months Testing & Evaluations

54. Future Scope
Typically, when we think of Virtual Reality, entertainment is the first thing to come to mind—
being able to play games, watch videos, and more on a VR device. However VR expands
further than that:
● The ability to virtually transport users to new locations can further used for education
as well. Students can travel back in time to past eras in history classes or can travel
today’s world to learn current events.
● It can even aid in job training, specifically, in the military and in healthcare. The Army
can utilize VR in combat training for soldiers without them being in a dangerous
environment.
● It also has plans to break into the real estate market in the near future, allowing users
to virtually walk through homes and “visit” homes that have not yet been built.
● It is very possible that in the future we will be communicating with virtual phones.

55. Conclusion
● Virtual Reality is now involved
everywhere.
● This technology gives a chance
to explore the world of 3D and
your own imaginations.
● It is still in the development
stage and many users creating
their own customized
applications and setups to suit
their needs.

56. The Class Right Now