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Augmented Reality for Travel: A Business Model

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These slides use concepts from my (Jeff Funk) course on Business Models at National University of Singapore to analyze the business model of Augmented Reality for travel. Augmented reality superimposes information on top of our sensory data. One way to do AR is to use a smart phone’s camera to view a world with information superimposed on the smart phone’s display. For travel, nearby places of interest can be provides along with ratings, reviews directions, public transport, and other information on them. This information can be obtained from Google Earth and other sources. The slides describe the value proposition, method of value capture, customers, scope of activities, and method of strategic control for two startups involved with AR and travel.

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Augmented Reality for Travel: A Business Model

  1. 1. Augmented Reality for Travel: A Business Model National University of Singapore Ow Jie Yu John Kevin Chen Yen Yu Yusuke Yamanaka
  2. 2. Outline The technology and its value proposition Analyze current business model of two firms Present a novel business model Technology What is augmented reality? What does it offer? What kind of devices are needed? How does it look like? All these questions will be addressed in the first section Novel Business Model We will present a new business model – one that is unique to this technology and makes use of the technology to its fullest. Current Business Model We will analyze two different business models of two different firms that currently use this technology for travel- based application.
  3. 3. 1 Technology
  4. 4. TechnologyAugmented Reality Add contextual information to real world view Smartph ones Tablets Wearable s
  5. 5. “ It’s the real world – only better - Jay Wright Business-development Director of Qualcomm Inc.
  6. 6. Value Proposition of Augmented Reality Intuitive Convenient Entertainmen t
  7. 7. Value Proposition of Augmented Reality Intuitive Users get an interactive interface on their devices and get contextual information based on real world view, providing a “What You See Is What You Get” UI that is user- friendly Entertainment Augmented Reality is a new and exciting technology that excites most users. Its game-like and futuristic look add entertainment value to applications which utilizes this technology Convenient There is no need to get extra hardware for existing devices. If your device runs the latest operating system, has enough space, and comes with a camera, you are good to go
  8. 8. 2 Business Model Analysis
  9. 9. Business Model Analysis buUuk Augmented Reality Travel Applications GeoTravel
  10. 10. ? What application are we talking about? They are AR-based travel application which make use of the user’s location and surroundings and show pins about places of interests around the user What they provide: What they don’t provide (now): Information on nearby places of interests Ratings & Reviews of such places Information of such places Directions Public Transport Guide Insiders Discount and Deals
  11. 11. Value Proposition - buUuk buUuk Notification Ratings & Reviews Distance Based Categories
  12. 12. Value Proposition of buUuk Ratings & Reviews are embedded in the location pins for easy viewing by the users. Users can see ratings, reviews for a lot of restaurants that are nearby Categories are filters that users can use. This is to differentiate restaurants, shopping malls, attractions, etc. through a simple tap Distance-Based tracking enables users to view pins that are located within a fixed-radius from their current position
  13. 13. How Does It Work? App GPS tracks the user’s location. The camera gathers real- life footage of the user’s surroundings Data is stored in a central database. The pins are stored as coordinates taken from Google Maps. Ads are served from a different ads database where almost all “free” apps get their ads from
  14. 14. Value Capture – Advertisement App
  15. 15. GeoTravel
  16. 16. Value Proposition - GeoTravel GeoTravel Multi-Lingual Car Locator Travel Information Ad-Free
  17. 17. Value Proposition of GeoTravel Multi-Lingual GeoTravel’s application is available in more than 20 languages – providing a great alternatives to travellers who are not multi-lingual Car Locator Forgot where you parked your car? Don’t worry, GeoTravel saves the day for you with its car locator feature Travel Information GeoTravel takes data from Wikipedia to give information of places of interest right from the application
  18. 18. Value Capture – GeoTravel GeoTravel US$0 .99
  19. 19. Why old business model fail New technologies often require new ways of doing business. Sometimes, they are unique to the new technology Ads are usually stored in a separate database from the app itself, hence the need to download these ads involuntarily Conventional advertisements can be a distraction and annoy users throughout using the application Conventional Data-Heavy Ads Unappealing To Users
  20. 20. Why old business model fail GeoTravel, although does not provide adds, does not have enough value proposition to its users When the growth of new users slows down, GeoTravel’s Revenue Stream also slows down Usefulness Stagnant Revenue Stream
  21. 21. 3 Proposed Business Model
  22. 22. Proposed Business Model Identify Users And Their Needs Define Value Proposition $ Unique Value Capture Aggressive Marketing Strategy Define Scope of Activities Effective Strategic Control Methods
  23. 23. Users Travel Enthusiasts Food Enthusiasts App Users (Direct) Businesses Business Owners Deals and Reviews Hub
  24. 24. Value Proposition Insider Deals Ratings & Reviews Distance Based Categories User Profile Social Media Integration
  25. 25. Distance BasedInsider Deals Ratings & Reviews User Profile Categories Social Media Integration Value Proposition Insider deals are deals that can be accessed through our app Users can read and write reviews directly within our application Users can have profiles which store their personal data and preferences Users can view places of interest within a radius from their position Users can filter places of interest based on category (hotels, foods, etc.) Users can post to their favorite social media account from our app
  26. 26. Value Capture Offer App as a Free Download Collaboration with Business Owners Insider Deals via Groupon
  27. 27. Why such methods? Free Does not obligate users to pay – some want to “try first then decide” Deals Collaboration Provides a platform for ads in a new and sophisticated way – Companies pay us to put such ads Businesses can also reach out to customers by attracting them with deals (which also attracts users for our app)
  28. 28. Collaboration Strategy for Advertisements Location-Based Advertising Custom-Made Pin
  29. 29. Enables businesses to reach nearby potential customers Location-Based Advertising Target users that are nearby based on GPS tracking Custom made pins distinguish ads from regular pins so that they stand out Custom-Made Pins Does not require downloading from external database since treated as if it were a normal pin
  30. 30. Without Advertisement With Advertisement
  31. 31. Insider Deals Groupon (or any company) Collaboration $ Retrieve Deals Based On Location Pins with White Star Icons Contains Insider Deals Inside Information on Pins
  32. 32. No Insider Deals Insider Deals at Starbucks
  33. 33. Ratings and Reviews Ratings & Reviews Distance Based <<name>> Embedded in Pins Restaurants Hotels Tourist Attractions
  34. 34. User Profile User Ratings & Reviews Social Media Profiles Preferences Bookmarks
  35. 35. Ratings & Reviews Social Media Profiles Preferences Bookmarks Users can read and write reviews directly from our app, which is connected to TripAdvisor (or any other reviews hub) Users can store their social media credentials in our app, and hence can post to such social media directly from our app Users can have their own preferences, such as a certain type of cuisine, etc. Users are able to store preferences as filters in our app Users might have a certain favorite place or spot. These places can be saved as bookmarks for later viewing by the user
  36. 36. Scenarios of Use - Tourists Travelling in a (foreign) place A lot of options to eat, but don't know how to get information on such places Takes out phone, open our app, get instant ratings and reviews of places nearby Visiting a famous landmark such as the Merlion Statue, Marina Bay Takes a lot of pictures and want to post on social media (for example, Instagram) No need to switch out to Instagram because it can be done directly on our app Wants to shop but short on budget Opens our app and see places that have insider deals Gets instant rebate that are located nearby
  37. 37. Scenarios of ‘Use’ - Business Want to reach out to potential nearby customers Conventional ads might not target potential customers Our app targets customers that are nearby, hence easier to reach out Have limited-time offers and discounts Want to target new and existing customers Can reach out to nearby customers who might be interested in the deals
  38. 38. Network Effect Business Owners Users If have many User Friendly Fast & Responsive Convenient
  39. 39. How to get initial users?
  40. 40. Collaboration with Telcos Telco Companies Tailored for Tourists Future Hopefully… Wi-Fi Everywhere Mobile Data Plans
  41. 41. Getting Lead Users Free Phone Rental Application Pre-Installed Lead UsersHopefully… Happy Users Happy Users might attract new users. To promote this, such users can earn referral points which might give them exclusive deals
  42. 42. Future Direction High Interest Hopefully… more users Tourism Boards Integrated Travel and Entertainment Games Integrated Attractions
  43. 43. Inbound Logistics - Data connectivity - Information/data sourcing Operations - Data management - Mobile application Management - Augmentation modelling, rendering and display - Overall system architecture and functionality -Collaborations Marketing - Advertising and promotions - Collaborations Outbound Logistics - Availability in digital distribution platforms - Partner distribution channels Value Chain R&D Intellectual Property
  44. 44. Summary & Conclusion (1) Value Proposition Insider Deals Ratings & Reviews Distance Based Categories User Profile Social Media Integration Value Capture Collaboration for Deals Innovative Ads Free Download
  45. 45. Summary & Conclusion (2) Pre-Installing our Application On Smartphones for Tourists Collaborate with Telcos for Tourist-Oriented Data Plans Referral Points for Users who Manage to Get Other Users Work with Tourism Board To Provide Entertainment Value
  46. 46. “ Thanks!

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