Strategic Management

Virtual reality is a technology that aims to offer a simulated immersive and sensorial experience to customers worldwide and across many sectors. With an estimated market size of $84 billion by 2028, VR finds use cases in entertainment, such as gaming, e-sports, live events, and corporate training across various industries such as automotive, retail, healthcare, aerospace, military, and education1.
Due to the Covid-19 pandemic, VR is gaining popularity in the education sector, where universities are exploring new ways to deliver remote teaching. It is expected that 11 million headsets will be shipped for education institutions in 2026, representing $20 billion in total market revenue.
Oculus was founded in 2012 in Irvine, California, USA, with the ambition to launch a VR headset for video games. Oculus called investors’ attention when its Kickstarter campaign raised $2.4 million, ten times the original goal of $250,0002. Two years later, in 2014, Facebook acquired Oculus for $2 billion, aiming to expand the technology to reinvent how people interact in diverse settings3. In line with such a strategy, Oculus launched a solution called ‘Workrooms’, in which users can join a virtual room to meet colleagues and work collaboratively from anywhere4. Their goal is to improve and adapt this technology to the education sector to be a major player in this growing market.

1 Fortune Business Insights, 2021. Available at: https://www.globenewswire.com/news release/2021/08/19/2283207/0/en/Virtual-Reality-VR-Market-to-Reach-USD-84-09-Billion-by-2028- Acquisition-of-NextVR-by-Apple-Inc-to-Incite-Business-Development-Fortune-Business-Insights.html 2 Wikipedia, 2021. Oculus (brand). Available at: https://en.wikipedia.org/wiki/Oculus_(brand) 3 Constine, Josh. 2014. “Facebook’s $2 Billion Acquisition of Oculis Closes, Now official,” Techcrunch. Available at: https://techcrunch.com/2014/07/21/facebooks-acquisition-of-oculus-closes-now official/?guccounter=1&guce_referrer=aHR0cHM6Ly91ay5zZWFyY2gueWFob28uY29tLw&guce_referr er_sig=AQAAAFJaKyUS9bqx7n4gh3E7yoHn0BxhtsETdf4CZQsdNCDF_ZS9o73FlhvwqSsyoh7Z COjUnnEaCniYRVEV2X_ROi4PPIf0TQwU7lmJpNRoy6sedyHn9fVXmY3MjsR7- 9m9Sfs4P25busw5Py12MvJJq7QKQZ00jiO-YRIbbC_ciU1
4 https://www.oculus.com/blog/workrooms/
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Subject to the External Examiner’s approval and may be subject to change LUBS5225
Imagine that Oculus hired you as a strategy consultant to get your valuable strategic advice on entering the higher education segment in the UK. They are looking for guidance in three main areas:
1) Environmental analysis. They want a summary of the three main threats and three main opportunities that they will face in the UK higher education market (universities);
2) Internal analysis. Oculus want some guidance on (i) the existing resources and capabilities that they can extend to this new segment and (ii) the new resources and capabilities they need to invest/develop to win in this market. They also want to know your thoughts on if/how they can gain sustained competitive advantage in this market;
3) Business level strategy planning. Oculus want your ideas to plan for their business-level strategy. Follow the four steps that managers need to engage with to develop business-level strategy, advising on what Oculus shall do at each step.

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