Industry of Vacuum Cleaners and Heaters - of Dyson Company - Case Study Example

Case Study The Dyson Company Contents Contents 2 Introduction 3 Industry overview of vacuum cleaners and heaters 3 Overview of Dyson 3 Discussion 4 Current position of Dyson Ltd as per the environment and competitors in UK market 4 Calculate the strategic options now available to the organisation 9 Suggest the strategic route and the methods for implementation of the chosen options 10 References 12 Introduction Industry overview of vacuum cleaners and heaters The industry of vacuum cleaners and heaters is extremely competitive due to the presence of numerous contenders. Still, the organization operating under the segment of vacuum cleaners identified a stable increase of sales by 6 percent and revenue by 8 percent in the market if United Kingdom. The prime cause behind such a stable improvement of the market share and profitability is due to the presence of extremely advanced robotic vacuum cleaners, which are both quieter and helpful in nature. Apart from these causes, the demand of vacuum cleaners or heaters is increasing rapidly in the entire globe due to its high-ended technologies as well as long lasting use. As a result, the retail sales volume and brand image of the vacuum cleaners and heaters has enhanced by 25 percent in the year 2013 as compared to 2012. This acted as a boon that enhanced its CAGR by 5 percent that improved the growth of the organizations. Overview of Dyson Dyson Ltd is introduced in the year 1991 by Mr. James Dyson. It mainly deals in the segment of vacuum cleaners, heaters, bladeless fans and hand dryers. He used to make of varied types of advanced and inventive techniques and policies so as to develop trendy and high-ended products in order to satisfy the changing demand of the customers. Due to which, very quickly, Mr. Dyson became able to capture the markets of more than 50 countries among many other existing contenders. This lead to the improvement of its revenue and profit margin by GB £1 billion and GB £306 million as compared to other rival players (Shepherd & Fraser, 2011, pp. 434-443). Discussion Current position of Dyson Ltd as per the environment and competitors in UK market In spite of attaining a high popularity and brand value in the market of United Kingdom, its current position needs to be evaluated. It might be analysed only by evaluating both internal and external environment with the help of SWOT and PESTEL analysis. Strengths: Expert engineering team: it is recognised as one of the greatest strengths of Dyson Ltd. This is because; due to the presence of expert and talented engineering team, the organization of Dyson Ltd became successful in introducing varied types of inventive technologies and products such as Dyson Cyclone, Dyson floor tool, Animal Turbo tool etc. By presenting a wide range of modern and trendy products, the changing needs of the customers of United Kingdom fulfilled effectively. As a result, the demand and brand image of the products of Dyson Ltd enhanced resulting in amplification of the net income and total sales (Grant, 2005, pp. 178-189). This is considered as one of the prime causes that improve the dominance of Dyson Ltd in the market of UK as compared to many other rival players such as Hoover, Panasonic, Electrolux and many others. Trendy design and light weight tools- the tools developed by the engineering team of Dyson Ltd are extremely powerful and trendy in style and design. For example: Animal turbo tool is one of the best example of trendy design and light weight tool of Dyson Ltd. It is promoted as a carpet cleaning kit that effective removes the pet hairs from the carpets. Along with this, it is also used as a tool to absorb dirt, spots, spills etc. As a result of these functions, the demand of these tools enhanced with a significant extent that faded the power of the products of the other rival players in the market of United Kingdom. High concentration over research and development- the successful of the organization of Dyson Ltd is mainly due to high concentration of the management over research and development. By doing so, the organization became successful in developing varied types of inventive product-lines that enhanced the demand and market value of the brand. As a result, a huge range of customers became attracted towards these products that improved their competitive advantage and sustainability in the market among others (Kazmi, 2007, pp. 565-576). Presence in numerous high-ended markets: due to its presence of numerous high-ended products, the organization of Dyson Ltd became successful in expanding its operations to China, United States, Malaysia, Singapore, Canada, Japan and many others. Due to which, the demand and portfolio of the organization of Dyson Ltd enhanced that improved its equity and total sales by a considerable extent. Moreover, due to the presence in numerous markets, the range of customers of Dyson Ltd increased that improved its competitive position and ranking. Weaknesses: Potential difficulties in mass production: varied types of difficulties arise at the time of production of products in mass scale. Due to which, the organization of Dyson Ltd has to bear high level of wastage that may hinder its profit margin and net income to a significant extent. Contract disputes- another one of the popular weaknesses of the organization of Dyson Ltd is disputes at the time of filing the contracts. Due to which, the brand image and popularity of the organization of Dyson Ltd might get reduced resulting in decrease of its reliability and trust in the market of United Kingdom. Opportunities: Launch of new products: due to extensive concentration over research and development and inclusion of highly staffs within the organization of Dyson Ltd, it became successful in developing varied types of inventive products. As a result, the demand and profitability of the organization amplified that increased its net income and dependency in the market of United Kingdom among others. Expansion to emerging markets: expansion of Dyson Ltd to numerous emerging markets proved extremely effective in enhancing its total sales and market share, As a result, the rate of profitability and total revenue of the organization of Dyson Ltd increased to a certain extent as compared to many other rival players. Increase of market share- by expanding the product lines of the organization of Dyson Ltd to numerous emerging markets, its market share and productivity increased. This proved extremely effective for the organization thereby amplifying its demand and prosperity in the market of United Kingdom. Threats: Numerous substitutes: due to the presence of numerous substitutes, the rate of demand of the product lines of Dyson Ltd as compared to many other rival players. Due to which, the organization of Dyson Ltd might get failed to retain its loyal customers for a longer period of time. So, it tried to offer more concentration over R&D (Kotler & Keller, 2012, pp. 323-334). Saturation of the products: the demand of the product lines of the organization of Dyson Ltd reduced due to saturation of the market. It might prove extremely problematic for the organizations to retain its portfolio and image. However, in order to cope up with such type of challenges, varied types of inventive designs need to be used. After analysing the micro environment, the macro environmental scenario might be evaluated with the help of PESTEL analysis. Political: the total sale of the products related to vacuum cleaners, heaters, hand dyers enhanced to a remarkable extent in the markets of United Kingdom due to trade restrictions and lower tariff rates. This acted as a catalyst for the organization of Dyson Ltd to improve its market share and equity in the market among other rival players such as Hoover, Electrolux (Porter, 2008, pp. 876-889). Economic: as the income of the citizens of the market of United Kingdom increased, so their lifestyle and living standard also enhanced. Due to which, the craze for trendy and modern technology devices increased that enhanced the market demand and popularity of these products. This factor proved extremely effective for the organization of Dyson Ltd that amplified its market share and brand value (Pride & Ferrell, 2004, pp. 675-686). Social: due to high health consciousness, the demand of trendy and modern products increased to a significant extent. As a result, the profitability and productivity of the product lines of the organization of Dyson Ltd enhanced resulting in amplification of its brand value and equity in the market among others (Rajagopal, 2000, pp. 765-776). Technological: in order to increase the demand and craze of the products, the organization of Dyson Ltd utilised high-ended techniques so as to satisfy the changing needs of the customers. This acted as a boon for the organization that amplified its reputation and dominance in the market of United Kingdom. Environmental: although the products of Dyson Ltd comprised of high-ended technologies still, it did not offered any sort of harmful effect on environment. Due to which, its level of preference is extremely high as compared to others. Legal: the products of the organization of Dyson Ltd operate as per the rules of United Kingdom and so its demand is high in the market among others (Guillén & García-Canal, 2012, pp. 554-565). Hence, after evaluating all the above mentioned factors, it might be depicted that, as the organization of Dyson Ltd operates as the rules and regulations of United Kingdom, so its position is quite high. Moreover, as it offers high-ended products so it is high preferred by the citizens of varying income groups and age –groups as well. Due to these reasons, its popularity and reputation is extremely high in the market of United Kingdom. Dyson and competitor analysis The most important competitors of Dyson Ltd in the market of United Kingdom are Hoover, Electrolux and Panasonic. Among all the three, Panasonic is a Japanese manufacturer and it captured the market of United Kingdom by offering highly inventive Japanese technology products that geared its revenue by $ 50 billion. Due to the presence high-ended technologies, the range of customers enhanced to a significant extent. Similarly, Hoover fascinated the citizens of United Kingdom by offering highly inventive bag less vacuum cleaners. This enhanced its profitability and market shared by 15 percent and 25 percent among others. Other than this, the brand image and equity of Electrolux enhanced as it presented highly trendy and comfortable products so as to make resolve the duties in an effective way. This improved the competitive position and sustainability of the brand to a considerable extent. Calculate the strategic options now available to the organisation In order to evaluate the best strategic option for the organization of Dyson Ltd, service marketing mix, 7P’s needs to be used (Drummond & Ensor, 2006, pp. 334-345). Product: as the products of the organization of Dyson Ltd are manufactured with high-ended technologies such as tangle free turbine tool, radical cyclone technology, ball technology as well as trendy devises so as to satisfy the changing requirements of the customers. BY doing so, the demand of the products of the organization of Dyson Ltd enhanced significantly that improved its brand image and popularity in the market of United Kingdom (ESOMAR, 2008, pp. 356-367). Price: the organization of Dyson Ltd followed different pricing strategies such as product line pricing for vacuum cleaners. This is because; for different features and designs, the pricing of the products are also different. For example: Dyson DC07 HEPA costs $ 419.94, Dyson DC07 animal costs $ 519.94. Other than product line pricing for vacuum cleaners, premium pricing policy is used for other products. Place: the interested customers might purchase the products of Dyson Ltd from online sites such as eBay or Amazom.com. Promotion: in order to increase the brand image and customer awareness, the organization of Dyson Ltd promoted the features of its products in online sites. By doing so, it might attract a wide range of traffic within a small time frame. Other than online sites, it also used television and newspaper to promote its products (Bradley, 2007, pp. 223-234). People: the sales team of Dyson Ltd is extremely skilled and talented and so they may assist the customer in understanding the trendy features in a more effective way. This might increase the total sales and profit margin of the organization of Dyson Ltd. Process: the organization of Dyson Ltd cleared any sort of doubts related to warranty, packaging, shipping charge etc to the customers prior selling the products. So that the brand image and loyalty remains enhanced in the market of UK among other rival players. Physical evidence: the design of the retail outlets of Dyson Ltd is quite similar in nature and style so as to present a unique sense of feeling to the customers. This enhanced the brand value and uniqueness of the brand in the market. Hence, after analysing the above paragraphs, it might be depicted that the most feasible strategic option for the organization of Dyson Ltd is extension of the features and benefits of core product and actual product. The organization of Dyson Ltd might manufacture the products, following these characteristics features like trendy design, light in weight and easy to manoeuvre. Apart from these features, the organization might try to offer certain extra benefits to differentiate the products from its competitors such as filter cage, electrostatic layers, pleated HEPA layers, bacteria killing screws, tangle free turbine tool to remove pet hairs etc. These features might prove effective for the organization in attracting a wide range of customers of varying lifestyles and income groups. Only then, the profitability and net income of the organization of Dyson Ltd might get enhanced. Suggest the strategic route and the methods for implementation of the chosen options The most important strategy that might be used by the organization of Dyson Ltd in this age of competitiveness and high bargaining power is cost leadership strategy. By implementing this strategy, the organization might become able to offer qualitative products at an affordable price. Apart from this, inclusion of varied types of trendy features such as ball technology, tangle free turbine tool, radical cyclone technology, filter cage, pleated HEPA layers and many others so as to satisfy the need of the customers. By doing so, the brand image and loyalty of the organization of Dyson Ltd might get enhanced that may improve the profitability and market share of the organization in the market of United Kingdom. Other than this, by implementing the above mentioned strategy, the loyalty and reliability of the customers over the organization of Dyson Ltd may get increased that may improve its popularity and dominance in the market of United Kingdom among others. The strategic route is: \ In order to amplify the total sales and profitability of the organization of Dyson Ltd, the best strategy is cost leadership strategy. This might not only increase the range of customers but also the total revenue. By doing so, the dominance of the organization of Dyson Ltd might get increased resulting in amplification of its brand image and equity in the market of United Kingdom. Hence, it might be stated that, if the above mentioned strategy is followed then, the competitive advantage as well as sustainability of the organization of Dyson Ltd might surely get enhanced in the market of UK among other existing rival players (Beall, 2010, pp. 123-134). This might be extremely beneficial for the organization of Dyson Ltd that may amplify its reliability and consistency in the market in the coming years. As a result, the popularity and reputation of Dyson Ltd might get enhanced thereby amplifying its inner strengths and opportunities to a significant extent. References Beall, A, E. 2010. Strategic Market Research: A Guide to Conducting Research to solve problems. Boston: Harvard Business School Press. Bradley, N. 2007. Marketing Research: Tools & Techniques. New York: McGraw-Hill. Drummond, G. & Ensor, J. 2006. Introduction to Marketing Concepts. New York: Cengage Learning. ESOMAR. 2008. Market Research Handbook. London: Sage. Guillén, M. F., & García-Canal, E. 2012. Execution as Strategy. Harvard Business Review Vol. 90(10). Grant, R, M. 2005. Contemporary Strategy Analysis. London: Sage. Kazmi, S, H, H. 2007. Marketing Management. Germany: Springer. Kotler, P., & Keller, K. 2012. Marketing management. Harlow, NJ: Pearson Education. Porter, M, E. 2008. Competitive Strategy: Techniques for Analyzing Industries and Competitors. London: Simon and Schuster. Pride, W. M. & Ferrell, O. C. 2004. Marketing. London: Sage. Rajagopal, 2000. Marketing Concepts And Cases. New York: McGraw-Hill. Shepherd, J. & Fraser, S. 2011. Inside Dyson Distinctive Company?, Vancouver, Canada Degal: Graduate School of Business. Read More