Innovation Process
The central idea behind the sale and rental of e-bikes in the UAE is the creation of a product that is openly manifesting its benefits for the end-user while at the same time implying the overall value for the local community and the population in general. Simply put, it would be necessary to communicate the advantages of the product in such a way that the customers would understand how much better an e-bike is for them than the nearest alternative (e.g. a car).
The main challenge for such an approach would be the presence of noticeable disadvantages, such as the decreased convenience and prestige associated with bikes. Therefore, it would be necessary to capitalize on the insights into the environmental and logistical advantages of the technology, such as the increased cost-effectiveness and the long-term city-scale improvements. The development phase would require compiling the information on the principal components of the device, such as the engine, the battery, the frame, and some major gears.
Importantly, it would be beneficial to initiate a simultaneous outreach to partners among policymakers, governments, and related organizations (e.g. environmental activists and healthy lifestyle promotion nonprofits). In this way, initial awareness can be established among the stakeholders that could later be reinforced by the predisposed customer base. Finally, the design stage would require specification of the key components, such as the capacity of the battery, the principle of the charging mechanism’s operation, the use of the mechanical components, and the overall shape and “look and feel” of the final product.
The latter is especially important to boost demand. While the product offers numerous technological and financial advantages, it would be unreasonable to expect a sufficient customer base driven solely by them. Therefore, the product’s aesthetical characteristics must be representative of its social and environmental values, prompting more individuals to choose it over the alternatives.
Rothwell’s network model of the innovation process would be the most suitable for the introduction of technology to the market. There are two reasons for this. First, the e-bike consists of two distinct groups of components: the mechanical parts that are nearly identical to the traditional bicycles and the battery-powered electric motor. These components are usually represented by the different industry segments and would require a sufficient amount of cooperation and coordination to produce a feasible result.
The network model incorporates cooperation as its key principle and would thus be highly suitable for the task. Second, as was mentioned above, the technical aspects of the product would need to be aligned with its intrinsic implications through design solutions, which in turn, would require collaboration across departments. The networking model inherits such a possibility from the integrated one and is thus the most suitable option.
Value Creation and Capture
Of the three value capture elements form the framework, appropriability and revenue-generating mechanisms offer the most potential. The former can be facilitated through lead time and technical means. Specifically, the timing of the introduction of e-bikes in the UAE can play a crucial role. Currently, the technology is well-represented in the consumer markets of several countries, and the customers have the basic recognition of its key characteristics.
Therefore, it is likely that the first company to overcome the perceived inferiority of the product to alternatives will become strongly associated with the e-biking practices and, by extension, gain significant value capture momentum. To achieve this effect, the company should launch an environmental awareness campaign that would communicate the advantages of bikes (both electric-powered and traditional) as a means of transportation. Simultaneously, a marketing campaign could position the product in development as a cost-effective solution that eliminates most of the disadvantages of muscle-powered units.
The campaign should also highlight several areas where the high-end technical solutions were implemented, which would increase the appeal of the product for the tech-savvy audience. The most feasible technical means would be the modular system of the product, where the unique elements would use proprietary specifications, such as power requirements and component form-factor. In this way, the supply of additional elements and repair parts could be controlled by the company and/or the innovator.
The two revenue-generating mechanisms planned for the product introduction are outright sales and rental. The latter would require a specific approach to design and production. Some of the elements, such as the batteries and charger hardware, should be simplified to decrease costs. Other elements would require an increase in durability to mitigate the probable lack of care exercised by the users in comparison with the units bought for personal use.
Finally, a tracking solution should be implemented in the rental units to make it easier for the service provider to find abandoned or stolen vehicles. More importantly, such an addition could provide the possibility to collect and analyze data on the movement patterns of the users. Such data can be later used to optimize the performance of the rental mechanism through the reallocation of resources and/or prices. Even more importantly, it has the potential to highlight infrastructural issues and provide useful insights for city planning organizations and construction companies.
Environmental Friendliness
The e-bikes hold great potential for making environmental friendliness their decisive feature. First, their energy consumption rate is significantly lower than that of their closest competitors – the gasoline-powered internal combustion vehicles (Thompson & Kennan 2017). Also, their method of charging makes it possible to redistribute the resources by eliminating the need for complex and high-risk power stations within the city line, relying instead on remote power generation.
Besides, the cost of electricity delivery is usually more infrastructure-demanding than that of fossil fuels, further improving the overall environmental impact of the industry segment. Also, the necessary infrastructure (e.g. the power grid) is usually already available in countries such as the UAE, further reducing the barrier to innovation entry to the market.
It is important to note that all of the above is relevant for the scenario where the bike is charged using the conventional energy sources (“dirty energy” derived from fossil fuels) and that the technology permits a more favorable scenario of using renewable sources of energy (e.g. solar chargers). Another aspect that offers improvements in terms of environmental impact is the absence of waste generated by using the bike. As the scale of adoption of the technology will grow, it would be possible to slow down the air pollution in major cities, which is becoming a serious issue in the UAE.
Given the information available in the case, it is possible to categorize e-bikes as an architectural innovation, in which existing technologies are used to enter the new market. The only technical innovation involved in the recent improvement in battery production and charging methods, neither of which is radical (Thompson & Kennan 2017). However, the cumulative effect of technical achievement made it possible to create a product that is appealing to the audience with a high environmental awareness rate and high standards of quality of life.
The most feasible strategy for the adoption of e-bikes startup is a partnership. The reason for this is the diversity of factors responsible for the successful integration of the product. The most significant of these is the legal domain (regulations that can impede the adoption process) and infrastructural complexities (the need for bike lanes, parking spaces, and rental stations). Besides, as was mentioned in the previous section, the product requires at least two groups of components from unrelated industries. Thus a well-coordinated partnership would be necessary for the engineering stage.
Support from Authorities
Since the adoption of e-bikes can bring significant improvements in the quality of life of the local population, the authorities are recommended to look into the technology and make certain steps that would decrease the barrier of entry for the e-bike startup. For instance, it could be beneficial to allocate funds and resources for the construction companies able to build the bike lanes compliant with the modern safety standards and compatible with both the traditional bikes and the electric-powered units. Next, the traffic rules must be revised to account for the speed of the e-bikes.
For the promotion of the new technology, awareness and educational campaigns can be organized. To reach the desired result, the local authorities are advised to partner with the environmental organizations to improve the targeting of the initiative. Aside from the environmental benefits outlined in the previous section, the events can include education on safe usage of the technology and the ways of decreasing personal carbon imprint.
From the business perspective, such direction will ensure the greater commitment of the audience to the environmental cause and strengthen the position of the product on the market. Another area recommended for the adoption of policies is public health, where the promotion of a healthy lifestyle can be supported through established channels. Healthcare providers can educate the population on the risks of the sedentary lifestyle and the benefits provided by the active exercise and outdoor activities. Public health organizations may offer statistics and guidelines on the state of the air in the location and encourage the stakeholders to participate in the pursuit of pollution reduction objectives. Finally, the city planners can be involved in the effort by making sure that the urban landscape is more suitable for the use of e-bikes.
This may include incentives to the local businesses for contributing to the cultural and entertainment value, greater exposure of the location’s notable sites, and the establishment of the parking spaces for the owned vehicles.
Reference List
Thompson, H & Kennan, H 2017, ‘As transportation costs, emissions grow, electric bikes offer an efficient alternative‘, Forbes. Web.