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Innovation Management Assignment: Delivery Drone Services by eBay


Task: In this innovation management assignment you will analyse the impact of one specific type of innovation on various organisations.


This report on innovation management assignment is on the innovative analysisto introduce the Drone Delivery Service by eBay,aCalifornia based Americanmultinational company.eBayfacilitates consumer to consumer and business to business sales through its online platform.It is an online site that facilities online auction and a shopping website for millions of buyers, sellers, and businesshouses(Ebayinc, 2020). eBay has decided to diversify its portfolio to Unmanned Drone Delivery Service to be at par with its competitors like Amazon and Alibaba.The Drone Delivery Service is being contemplated by other e-commerce giants but had not been operationaltill date.eBay has decided to initially test waters by starting delivery drones within a small radius of 30 kilometers. The initial test results had been very promising and eBay intends to provide this service to premium customers. The drones will be capable of carrying cargo boxes weighing up to 5 kilograms and can promise delivery within an hour. The company has tied up with drone manufacturer DJI for its custom made Drones.

Major subtypes of the innovation:
The Drone:

Drones come in different shapes and sizes. For a Drone to accurately deliver a package to the intended destination would have to be a technological marvel in itself. In Delivery Drones the extra weights to be lifted by the drone would have to be accounted with hi-tech innovation. For bigger packages,a robust and well-organized performance-oriented Drone would be required for successful delivery(Carlgren, Rauth, & Elmquist, 2016). The Drone should have built-in sensors, cameras, GPS to help it maneuver through obstacles like birds, trees, power lines, no-fly zones, and elevations.

Drone Delivery System:
An important step would be developing the delivery software which would let the handlers manage the drone in real-time. The software should have cloud connectivity with at least 4G/LTE networks which can be operated from distant locations.The system should be able to positiongeo-tags tothepackagedropping sites to pinpoint delivery(Rattalino, 2018). The system should have excellent anti-hijacking software as individuals with malicious intents might try to take control of the drone through malware and virus.TheDrone softwareshould be able to analyze cause of crash or mechanical failure.

The flight path or routes for the Drones would have to be worked out.The dispatch centers to be identifiedon the city from where drones would be deployed. Limitations in built-in battery time could bring down the range of the drones so multiple dispatch stations might be required for a drone fleet suitable for a city(Sigala & Kyriakidou, 2015). Another mode of transport could be the old delivery trucks as dispatch centers.

Operational Set-Up

eBay would first venture out with high-end mobile phones and gradually move to other products.The base would be a city that will increase profitability and productivity. The Drone service would be costlier in cities having lower population and profitability would increase in cities with a dense population like New Jersey(Abdullah Saif, 2015).An early success in the commercial delivery service might help to gain a significant advancement intheproductdevelopment. Initial failures if any,wouldoffsetgainingan edge in technological innovation and eBay would still be ahead of its competitors. These early initiatives would no doubt assist in gaining customer favourand project eBay as a visionary(Mendes, Gomes, & Romão, 2017).People have a fascination with modern gadgets and the prospect of delivery of a mobile phone within minutes after its launch would be a novelty.

The initial plan would be to acquire 200 Drones, technical support, and software. Assuming that a Drone will cost $7,000 and $3,000 for the software, eBay would be looking at an average cost of $10,000 and the investment required might be about $2 million for24 hours operation.Considering other additional costs such as research and development, the insurance cost of the drones, setting up of Drone stations, system technicians and robotics engineers for worth $32.78 million. eBay’s Drone technology would be non-labour intensive. The company would be hiring Drone Operators with requisite experiencewhichwould gradually phase out trucks or vans and save on fuel and driver’s wages(Khavul & Bruton, 2013).The Federal Aviation Administrator (FAA) restricts commercial use of Drones below 400 feet and cannot enter airports. So eBay would look at incentivizing the usage of some private airspaces.

Organizations Management approach
Management of eBay would be encountering overwhelming challenges which till date were restricted to land routes and traditional processes. The e-commerce giant would be entering previously unexplored territories and the management should haveanextremelypositive outlook to embrace this new concept into the system(Donate & de Pablo, 2015).The eBay team should come up with ‘out of the box’ ideas to overcome problems since this new mode of delivery might throw up surprising tests never encountered before.Drone Delivery might sound like a fantastic idea but eBay should chalk out strategies to convince key investors that this venture would result in a positive outlook of the company. The idea conceived by the top leadership should be welcomed by the entire company to ensure itssuccess(McGahan, 2014). The stakeholders and partners ranging from employees, service providersto procurement managers would have to sit together to agree on the concept.

People are inherently opposed to change and eBay should contemplate building a new team exclusively for the Drone Delivery system and identify individuals who can be retrained on the new technology. Considerable investment in extensive training on the new system to the delivery service chain needs to be undertaken(Grant, 2019). The team decision of eBay is to try out with high-end mobile phones. Itmeans they have to involve in discussions with technical experts of top phone companies like Apple, Samsung, Xiaomi, and Oppo.Drone delivery is a new concept and eBaywould have to understand the pros and cons of electronic gadgets exposed to rain and the launch of their phones solely through the eBay website(Atwal & Williams, 2017).A senior team member should closely coordinate with the FAA to understand their guidelines on a commercial license, flight paths, and any other mandates

FutureDevelopments of the Innovation:
Sanitization and Pesticide Spraying

eBay plans to further develop this product for aerial sanitization. The COVID-19 pandemic had wreaked havoc worldwide. It was a very common sight to see health and safety workers spraying chemicals in containment zones wearing Personal Protective Equipment (PPE),thusendangering their lives(Khavul & Bruton, 2013). Sanitization being new normal, futuristic Drones would be taking over from human involvement to sanitize dingy slums and heavily populated areas which would otherwise be impossible. It would significantly reduce the risk of human lives by infection. eBay would be preparing a blueprint to make the idea practical(Mendes, Gomes, & Romão, 2017). It can either bag government contracts by taking over the responsibility or lease or sell the technology.

Similar Drone technology would be used for sprayingpesticidesand fertilizers over large tracts of field. The drone technology by eBaywouldbe useful to farmers and ranchers using light aircraft to spray their fields. A significant innovation would pinpoint diseased plants and apply the remedy(Mendes, Gomes, & Romão, 2017). Alike human beings,nutritionaldeficiency or disease does not occur evenly in plants. Still, planters for decades had sprayed their crops uniformly to weed out pests, and to fertilize without considering the damage done to other crops and the costs involved. Rampant abuse of chemicals had caused severe health problems. Drones equipped with high tech surveillance cameras could easily single out the plants requiring treatment.

Building safety inspection
Drones could be usedto inspect inaccessible areas of large buildings to identify areas where work should be done. It would considerably save time and money and the number of resources required. It is possible to get a full aerial view of buildings without the requirement of heavy equipment(Carlgren, Rauth, & Elmquist, 2016). eBay carried out some research work in some of its office buildings, telecommunication towers, dilapidated buildingsandis hopeful to develop this technology to the next level.Instead of going up scaffolding or treading into dangerous parts of a condemned buildingit was possible to send up a Drone to gather important information to the condition of the facade. Similarly, Drones can be sent underneath mine shafts to check structural stability without risking human lives.

Aerial Surveillance
The use of sophisticated Drone technology is already used by armed forces. eBay could use its technology to local police and law authorities where the usage of Drone is much simpler. It has potential uses in keeping tab of local law and order situations like monitoringmass gathering, social events like marathons, roadshows, and rallies. eBay contemplates foray into aerial surveillance used by the U.S Customs and Border Protection (CBP). The CBP team is known for using aerial surveillance along the porous borders of Mexico, Canada to stop illegal immigration(Rattalino, 2018). eBay’s precision Drones enabled with high-quality video feed would be perfectly suited for monitoring above the thick foliage.eBay plans to customize its Drones with thermal images and night vision technology for supply to other law and enforcement agencies. Hopefully, talks with the FAAwould generate potential leads to its foray to expand its business to law and enforcement.

Abdullah Saif, N. M. (2015). How does Marketing Strategy Influence Firm Performance Implementation of Marketing Strategy for Firm Success.

International Journal Of Innovation And Economic Development, 1(3), 7–15.
Atwal, G., & Williams, A. (2017). Luxury brand marketing–the experience is everything! In Advances in luxury brand management (pp. 43-57). Cham: Palgrave Macmillan.
Carlgren, L., Rauth, I., & Elmquist, M. (2016). Framing design thinking: The concept in idea and enactment. Creativity and Innovation Management, 25(1), 38-57.
Donate, M., & de Pablo, J. (2015). The role of knowledge-oriented leadership in knowledge management practices and innovation. Journal of Business Research, 68(2), 360-370.
Ebayinc. (2020, August` 07). About eBay: Company Info, News, Careers, Investor Relations. Retrieved from Grant, R. M. (2019). Contemporary strategy analysis (10th ed.). Hoboken, NJ: John Wiley & Sons.

Khavul, S., & Bruton, G. D. (2013). Harnessing innovation for change: Sustainability and poverty in developing countries. Innovation management assignmentJournal of Management Studies, 50(2), 285-306.
McGahan, A. (2014). How Industries Evolve. In D. Wit, & Meyer (Eds.), Strategy: An International Perspective (p. Ch. 10). New York: Cengage. Mendes, D., Gomes, J., & Romão, M. (2017). Creating intangible value through a corporate employee portal. Journal of Entrepreneurship, Management & Innovation, 13(3), 125-149.
Rattalino, F. (2018). Circular advantage anyone Sustainability-driven innovation and circularity at Patagonia, Inc. Torino: Thunderbird Int Bus Rev.

Sigala, M., & Kyriakidou, O. (2015). Creativity and innovation in the service sector. The Service Industries Journal, 35(6), 297-302.


Break up of Investment Capital  (Approx)






Per Drone Cost



Cost of 200 Drones



Software Cost



Monthly Wages for Drone Operator



Annual  Wages for 50 Drone Operators



Annual Insurance cost



Research  and Development



Repair and Maintenance



Annual wage of Robotics Engineer



Annual wage Robotics Engineer (4)



Drone Stations



Commercial License, Registration and Miscellaneous cost



Annual wage of Systems Technician



Annual wages System Technician (8)






Total Capital required





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