Business Corporate Strategy of Dyson Ltd - Case Study Example

Case Study of Dyson Ltd Introduction The United Kingdom’s economy is saliently marked by its highly competitive industries. The existence of many multi-national companies has sparked competition in every industry that is encapsulated within the British economic framework. Noticeably, the vacuum cleaners market is one of those that have been a major driving force in the economic sustainability and development of United Kingdom owing to its large consumer demand both locally and internationally (Hill and Jones, 2012: 71). However, just like any other industry, players in the vacuum cleaning business have to revamp their strategies every time in order to beat the rest and attain competitive advantage. There are numerous factors (both internal and external) that are likely to influence their performance and unless such dynamic is taken into account and probably neutralised, success may not be achieved. Some of the leading companies that deal in vacuum cleaners in the United Kingdom include Dyson Ltd., Vax and Hover Candy Group among several others. It is worth noting that most of these companies have expanded their market base to foreign markets across the world. This enlargement can be attributed to the effective marketing strategies as well as the actively engaged management personnel among other factors. It is, therefore, necessary to evaluate some of these issues in regard the organisational performance. In this essay, an analysis of Dyson Ltd (one of the UK’s leading vacuum cleaner company) will be carried out in order to account for the performance of the company. Brief Description of Dyson Company The company is a private firm formed way back in 1933. It was pioneered by James Dyson with Mark Conze becoming its first chief executive officer (CEO). It has its headquarters in Wiltshere, United Kingdom. The company was founded based on and is driven by technology in its quest to meet the demands of the consumers seeking vacuum cleaners. The founder, Dyson (an engineer by profession), first conceptualised the idea of inventing a cyclonic vacuum technology in 1978 when he got exasperated after his wheelbarrow failed to efficiently operate. In his pursuit to find a better way of keeping machines and equipment fit for work, he came up with this invention that has since changed very many lives; both directly and indirectly. Dyson is a practical example of how possible it is to transform one’s expert idea into an excellent business opportunity that turns out to be magnificent. As at today, the company has employed over five thousand workers. It has also opened its branches in over eighty other countries in the world making its products become accessible in several places across the globe (Marshall Cavendish Corporation, 2008: 450). SECTION A Current Position of Dyson Dyson has increasing grown over the years and as at today the company has a wide market base across different continents. The fact that the retail market of vacuum cleaners has steadily grown explains why the company pretty well at home. According to Birkin (2012: 98), the retail demand of vacuum cleaners increased by one percent in 2012. This accounts for the increased sales and improved revenue the company has recorded in the recent past. This trend in growth is as a result of the reduction of expenditure for household items. Henry (2008: 144) believes that most customers did not want to buy new vacuum cleaners to replace the old once. However, a change was seen towards the end of 2011 when the demand started to increase. For a long time now, Dyson has been the major vacuum cleaners company in the United Kingdom. With about 20% market share in the British vacuum cleaners industry, the company has had a considerable control of the market. Coming closer to Dyson in this industry is Vax Ltd. which has about ten percent market share. Third on the list is Hover Candy Group, a fast growing company that by 2012 had managed to attain an approximately eight percent market share in the same industry. Similarly, in the United States, the company has about twenty eight percent market share. This is another market that has extremely competitive industry players. This indicates how stiff the competition in the Vacuum cleaners industry in the UK is. Moreover, the larger market share Dyson holds is an indication of its higher competitive position in the market (Myers, Hulks and Wiggins, 2012:164). PESTLE Analysis of Dyson Political Factors The impact of political factors in UK on the performance and development of Dyson are massive and cannot be undermined. Factually, the United Kingdom government contributed too little to the formation and development of Dyson. As reported by Tallman (2007: 324), the British government, during the formation of Dyson Company had policies that did not incubate and nurture business ideas. Loans were almost impossible to access due to the high interest rates. It is for this reason that the founder, James Dyson, sought for assistance from foreign countries such as Japan to help him actualise his cyclone technology idea. However, today, the political environment in UK is enabling and favourable. Many businesses including Dyson are flourishing because of the auspicious policies and regulations that promote local industrial inventions. Economic Factors According to Myers, Hulks and Wiggins (2012:165), the economic climate in the United Kingdom do not extensively favour growth and development of companies that deal with products that are directly consumed. Companies that have not grounded and established themselves on the UK’s market are likely to perish if very thoughtful strategies are not put in place. Sometimes even the large companies such as Dyson are forced to rethink about ways of achieving sustainability and stay on their development course. Dyson being a manufacturer indulged in the production of products that are directly consumed has had this challenge prompting to consider closing down its factory in certain parts of United Kingdom. This has been in response to the fluctuating demand of the commodities it provides. The competition also is extremely high in most of the markets where Dyson sells its products. Although it has been able to catch large market shares in most markets, it still gets challenged by the unrelenting competitors who work around the corner to gain control, of the market. This explains why the company kept dropping in its market share until 2012. Social Factors One of the major reasons the company has grown to what it is today is, is due to the fact that it the products it produced aligned well with the social demand in the UK and beyond. It became socially trendy to vacuum clean machines and equipment and the introduction of vacuum cleaning technology was overwhelmingly embraced. The social dynamics seen in most societies today poses a challenge to most manufacturing companies due to the ever changing taste and preferences. However, Dyson’s utilisation of high and advanced technology has enabled it to come out innovatively with products that meet most customers demand. The nature of UK’s social context has been a major initiator in the success of business (Rothaermel, 2015: 133). Technological Factors Dyson and technology are inseparable. Right from the start, the company has always been a ‘friend’ of technology. Its production and operation are all embedded in advanced technology. The company has sought to appeal to its customers by innovating constantly to better and efficient forms. The greatest challenge it faces in regard to this is that several other firms (competitors) have seemingly been impressed by its technological advancement and have in turn copied it. In the process, some customers have been seized hence lowering its market share. The company has invented numerous appliances such as ‘contra rotator’ (a washing appliance with extremely high performance capability). Currently, the firm is also working on several other inventions and innovations that are set to be launched as soon as possible (Marshall Cavendish Corporation, 2008: 448). Environmental Factors Although the nature of production Dyson is indulged is predisposed to environmental problems such as pollution, the company has not had any serious allegations as far as the environment is concerned. This has environmental management and conservation has been ensured by Dyson’s commitment to research on the best ways to positively carry out production that can minimise or exterminate any chances of pollution. Generally, the geographical environment where Dyson factories are located do favour its performance, The quick accessibility of facilities such as infrastructure and essential services makes production and supplier chain process easy (Wetherly and Otter, 2013: 96). Legal Factors A major legal concern that has caused problems to Dyson is the issue of trademark. Since 1997, the company has filed several cases regarding its trademark image. Questions have been raised about the transparency of its trademark image. This has been a major hindrance in brand promotion and a number of resources have been used in an attempt to settle this matter. The major concern about this matter is the lack of a clear graphic depiction of the company’s trademark. Despite this legal challenge, the firm has been steady in its operations. SECTION B Available Strategic Options Selling Existing Commodities to Current Customers The first available strategic option is for Dyson to continue selling the vacuum cleaners it has in the markets it is familiar with. For instance, the company may continue serving the local consumers with products such as hand dryers. The advantage of this is that Dyson will not be risking anything in doing this since it is well versed with its dynamics. However, competition will not be minimised and its might not prove to be a development strategy. New Products to Existing Markets Innovating or inventing new products to the same customers is a better option for Dyson. Customer loyalty as well as brand reputation will improve. Sales may also improve and the fact that it is moderately risky makes it an advantage. However, this must be approached with caution since new products are vulnerable to rejection by customers. For a company like Dyson, It would be appropriate due to the high trust the consumers have on it. Same Products to New Markets Sometimes manufacturers do not need to create new products. Instead, they should just expand the market segment and introduce the products they have been producing (Birkin, 2012: 100). This is less risky as the company is still trading on the products they have. A pilot study makes it even much easier. Finding new market in the international platform would be a plus for Dyson. Currently, it covers only 80 countries. Exploring other markets with the same products would be advantageous. New Products for New Market Since entrepreneurship involves risk-taking, exploring new ideas is critical to success in business. Sometimes business take extra steps of creating or innovating totally new products and finds new markets where there are no competitors. This renders competition irrelevant thereby increasing their profit margin. However, it is the most risky strategy that much attention and evaluation. Dyson may decide to come up with a new product and sell it in a totally new market. SECTION C Recommendation and Strategic Routes If the company decides to choose option one which is selling the same products to its current customers, it should seek to beat the many competitors through intensive promotions and advertising. Consequently, the second option of developing new items and selling to the same customers would require that Dyson researches more on the customers’ changing preference and taste so as to innovate products that align with them. Although a little bit risky, in the case of Dyson, it is viable and worth exploiting. The third option in which Dyson would sell same products to new markets would be the best. This will involve doing research about the external market and finding the suitable market entry strategy. Some of the possible market entry strategies include direct exportation, licensing and strategic alliances (Doole and Lowe, 2008: 167). Also the company may open its factory in the foreign market and manufacture from there depending on the suitability. Lastly, the new product for new market is risky but rewarding. The company may use the technological knowledge it has at its dispensation and produce new products. After a thorough research, one of the above-listed market entry strategies may be used (Grant and Jordan, 2015: 119). Conclusion In summary, Dyson Ltd. is a typical company that has undergone the challenges that many businesses face during their operation. Formed several years ago, the vision of its founder has been pursued industriously despite the many challenges such as high competition, legal problems, and economic fluctuations among others. It has steadily grown and today the company controls a large market share in almost every market it is involved. From a strategic point view, there are a number of options that can be pursued to make the company improve in its sales. The most suitable is expanding the sales of its products to markets. If these are done, Dyson will be a force to reckon in a few years to come. References Birkin, J. (2012) Business advantage, Cambridge, Cambridge University Press. Doole, I. & Lowe, R. (2008) International marketing strategy: analysis, development and implementation, London, Cengage Learning. Grant, R.M. & Jordan, J. (2015) Foundations of strategy, Hoboken, Wiley. Henry, A. (2008). Understanding strategic management. Oxford, Oxford University Press. Hill, C.W.L. & Jones, G.R. (2012) Strategic Management. Cengage Learning. Marshall Cavendish Corporation. (2008) Inventors and inventions, vol. 2. New York, Marshall Cavendish. Myers, P., Hulks, S. & Wiggins, L. (2012) Organisational change: perspectives on theory and practice, Oxford, Oxford University Press. Rothaermel, F.T. (2015) Strategic management, New York, NY, McGraw-Hill Education Tallman, S.B. (2007) A new generation in international strategic management, Cheltenham, UK, Edward Elgar. Wetherly, P. & Otter, D. (2013) The business environment: themes and issues, Oxford, Oxford University Press. Read More