Market Analysis of Lightweave

Lightweave is providing a new outlet for businesses to market their product through virtual and augmented reality in Australia. The main customers for the business are businesses as compared to end consumers. Being a new concept Lightweave does not have many competitors directly as of yet however with expanding markets and advancing technologies more competitors are expected to enter the market in Australia and globally. Lightweave has the opportunity to expand to New Zealand as a premium product and to other geographical locations from there with increased brand recognition and product awareness.

Product Overview:

Lightweave is an Australian company that does not sell products rather it sells customized virtual reality and augmented reality experiences to businesses for the purpose of brand building and customer engagement. Furthermore through these experiences Lightweave collects data on individuals immersed in the experience in order to assist their clients in terms of research and marketing. The product is built in a way that it allows for maximum outreach through other methods such as social media as well (Lightweave Pty Limited, 2017).

Customer Analysis:

In order for a business to grow and thrive it is essential to strategize and know the base of the business which is its customers (Wilkinson, 2013). The first aspect in the customer analysis is to have a clear picture as to who is the main customer for a business. When considering Lightweave, it is relevant to know that the main customer for their product are businesses. Lightweave is a B2B (business to business) product rather than a B2C (business to consumer) product. Lightweave pursues businesses as its end consumer due to the fact that their product is a marketing tool for other businesses rather than an everyday tool for end consumers. Moreover businesses would be willing to spend a great deal more on a virtual or augmented experience that would highlight their product and its uses, furthermore the experiences are expensive and not affordable by many retail consumers which is why businesses are an apt target market (Dearsley, 2018).

B2B segmentation:

Lightweave in its initiation decided that rather than targeting individual customers it is easier to opt for brands which would be willing to use virtual and augmented reality as a marketing technique. Hence in terms of the customer, the type of industry is not limited; any business that wishes to pursue a unique method of marketing and has a product that relies on the quality of customer experience can benefit from the products being sold by Lightweave. The variation in the target customer can be seen from judging some of Lightweave’s major customers which include sports teams and clubs such as Brisbane heat, along with other customer experience focused businesses such as shopping centers as well (Bennet, 2017 ). Despite Lightweave being a business focused in Australia and New Zealand, it can target clients all around the globe due to the fact that the product is not heavy in machinery or equipment, rather it is data and software being used for the benefit of any business looking to find an innovative method of marketing its product and conducting research on customers based on their experience. Lightweave wishes to provide completely customized experiences to businesses willing to take the leap towards virtual and augment reality based marketing (Hussey, 2016).

Competitor Analysis

Competitors provide more switching power to the customer hence it becomes necessary to study the competition and create strategies to remain unique and become the top choice for consumers (Porter, 1989).

At this point in time Lightweave has a number of different competitors. First off the direct competitors would include any company that deals with the B2B virtual reality operations. Since this technology is comparatively new and the usage of virtual reality is a new concept, initially there would not be many direct competitors for Lightweave based on its unique proposition for the clients in terms of marketing. However indirect competition would exist in the form of many companies dedicated to marketing in Australia. This would include both traditional and non-traditional methods of marketing.

Virtual reality products given by Lightweave would definitely face tough competition in Australia and around the world when technological advancements and interests in virtual reality lead towards more and more companies dedicated towards virtual reality and its use as a marketing tool. Although companies like Sony, and Samsung provide B2C virtual reality products and specialize in the entertainment aspect of virtual reality, it is highly plausible that after the immense success of Lightweave in its venture, many companies would tend to shift towards the B2B prospects of virtual and augmented reality technology (Statista, 2018). This threat of new entrants would shift the power from the suppliers i.e. Lightweave to the customers due to the high number of direct substitutes which shall be available when the technology and concept becomes widespread globally among businesses.

Market Analysis:

The market for virtual reality products and experiences is on an upward slope when the Australian and New Zealand markets are considered. Numbers state that the players in the virtual reality industry face a bright future in Australia with expected revenues hitting approximately 1.6 billion dollars in the next two years whereas this number will increase even more with time. In terms of augmented reality the figures are already high with users involved with augmented reality through applications such as Snapchat, the use in advertising as offered by Lightweave is expected to grow higher than the present 20%. The AR/VR market is estimated to hit revenues worth around 150 billion dollars by 2020 (Mclean, 2018).

Environmental Analysis

Lightweave would be impacted by several external factors. One of the major external factors that will have an impact on Lightweave is the advancement in technology and systems that Lightweave would have to keep up with since the landscape of virtual technology is ever changing especially with big names like Apple intending to join the VR landscape. Legal considerations are also to be kept in mind with matters such as copyrights, trademarks and licensing agreements. As big companies with money to spare are the quickest to license and copyright the latest technologies.

Social trends are cultural aspects also have an impact on the operations of Lightweave, since normal customers become aware of virtual reality technology, more and more companies would tend to use the said technology for advertising and marketing purposes. Culturally as well there is a shift towards technology and innovation instead of traditional methods hence this factor tends to have positive ramifications for companies such as Lightweave. This is also evident in political agendas since Australia is set to become an “innovation nation” by the Prime Minister Turnbull who knows the importance of technology and innovation in the coming times (Mchugh, 2017 ).

Preliminary Strategic Options

As Lightweave is a company based in and operating in Australia, one of the plausible future directions for the company would be to expand its operations to different countries, the primary option being New Zealand. This is due to the fact that both virtual reality and augmented reality are on the rise in New Zealand hence there is opportunity for growth (New Zealand Herald, 2016 ). The lack of competitors in the same field in New Zealand allows for Lightweave to charge higher and use a price skimming strategy to penetrate the market as a premium product (Dunsby, 2017). It is suggested for Lightweave to start expansion to New Zealand then shift to other areas due to the potential for growth in the country and then having established a brand name and brand recognition the transition to other geographical areas would be easier to accomplish for the company in the future (Hollis, 2013). Furthermore in terms of products and offerings Lightweave can expand to B2C operations when the concept becomes even more plausible among end consumers as it is currently in the marketing scenario.

References

Bennet, S. (2017 , February 12). Success a reality for Brisbane startup. Retrieved from Lightweave: https://lightweave.co/2017/02/12/success-a-reality-for-brisbane-startup/

Dearsley, B. (2018, February 26). Augmented reality and virtual reality in B2B marketing. Retrieved from ITPro Portal: https://www.itproportal.com/features/augmented-reality-and-virtual-reality-in-b2b-marketing/

Dunsby, M. (2017, June 12). Pricing strategies: Which is best for your business? Retrieved from Startups : https://startups.co.uk/pricing-strategies-price-skimming-penetration-pricing-and-premium-pricing/

Hollis, N. (2013). Brand Premium: How Smart Brands Make More Money. Palgrave Macmillan.

Hussey, S. (2016, September 05). Things I Learnt Real Fast About Virtual Reality and Consumer Engagement. Retrieved from Lightweave: https://lightweave.co/2016/09/05/things-i-learnt-real-fast-about-virtual-reality-and-consumer-engagement/

Lightweave Pty Limited. (2017). Lightweave. Retrieved from Lightweave : https://lightweave.co/lightweave/

Mchugh, B. (2017 , July 25). Push to make Australia an ’innovation nation’ drives technology and clever ideas. Retrieved from ABC news: http://www.abc.net.au/news/2017-07-17/innovation-nation-taking-shape-as-ideas-fly/8698044

Mclean, A. (2018, June 27). Australia looks to capitalise on $150b AR and VR market opportunity. Retrieved from ZDnet: https://www.zdnet.com/article/australia-looks-to-capitalise-on-150b-ar-and-vr-market-opportunity/

New Zealand Herald. (2016 , October 18). Virtual and augmented reality on the rise in New Zealand. Retrieved from New Zealand Herald: https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11731289

Porter, M. E. (1989). How Competitive Forces Shape Strategy. Readings in Strategic Management, 133-143.

Statista. (2018). Share of global virtual reality software revenue in 2018, by category*. Retrieved from Statista: https://www.statista.com/statistics/528739/virtual-reality-software-revenue-share-worldwide-by-category/

Wilkinson, J. (2013, July 23). Customer Analysis. Retrieved from The strategic CFO: https://strategiccfo.com/customer-analysis/