We have seen the rise of AR in various different fields, however, it is becoming evident that AR will also become a necessity in businesses and organizations, with an increasing need to develop AR strategies.
As such, it will definitely change the course of how the companies and different organizations compete. They could additionally give rise to new strategic choices for manufacturers, ranging from what functionality to pursue and how to manage data rights and security, to whether to expand a company’s scope of products and compete in smart systems. The increasing penetration of AR, along with its power as the human interface with SCP technologies, raises some new strategic questions. The answers will, however, reflect each company’s business and unique circumstances, and augmented reality will become a more integral part of every organization or firm and its strategy.
Some of the main questions companies face are regarding the range of AR opportunities in the industry and the sequence in which they should be pursued? Companies must weigh AR’s potential impact on customers, product capabilities, and the value chain. Additionally, a question on how will AR reinforce a company’s product differentiation arises. To answer this, we must understand that the AR opens up multiple differentiation paths. It can create companion experiences that expand the capabilities of products, give customers more information, and increase product loyalty. AR interfaces that enhance products’ functionality or ease of use can be big differentiators, as can those that substantially improve product support, service, and uptime. And AR’s capacity to provide new kinds of feedback on how customers use products can help companies uncover further opportunities for product differentiation. The right differentiation path will depend on a company’s existing strategy; what competitors are doing; and the pace of technology advances, especially in hardware.
It is important to note that the AR dramatically reduced errors and increases productivity in factories.
Among many other things, AR enables new efficiencies that every organization should explore. This can significantly lower the cost of training, service, assembly, design, and other parts of the value chain. It can also substantially cut manufacturing costs by reducing the need for physical interfaces. Each company will need to prioritize AR-driven cost-reduction efforts in a way that’s consistent with its strategic positioning. Firms with sophisticated products will need to capitalize on AR’s superior and low-cost interface, while many commodity producers will focus on operational efficiencies across the value chain.
Over time we can expect organizations to create teams dedicated to AR, which would be needed to establish the infrastructure that will allow this new medium to flourish and to develop and maintain the AR content. Many firms have started to build AR skills in-house, but few have mastered them yet. Whether to hire and train AR employees or partner with specialty software and services companies is an open question for many. Some companies have no choice but to treat AR talent as a strategic asset and invest in acquiring and developing it, given AR’s potentially large impact on competition in their business.
The challenges, time, and cost involved in building the full set of AR technologies we have described are significant, and specialization always emerges in each component. In the early stages of AR, the number of technology and service suppliers has been limited, and companies have built internal capabilities. However, best-of-breed AR vendors with turnkey solutions are starting to appear, and it will become increasingly difficult for in-house efforts to keep up with them.
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