Corporate Strategy - Dyson - Case Study Example

Corporate Strategy-Dyson Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Organizational Current Analysis 3 2.1 Environmental Analysis 3 2.1.1 Political Analysis 4 2.1.2 Economic Analysis 4 2.1.3 Social Analysis 5 2.1.4 Technological Analysis 6 2.2 Competitor Analysis 7 2.2.1 Hoover Company 7 2.2.2 Excel Dreyer Corporation 7 3.0 Available Strategic Options 8 3.1 Diversification 8 3.2 Marketing 9 4.0 Recommendations for strategy implementation 10 4.1 Online Platform 11 4.2 Supply Chain Management 11 5.0 Conclusion 12 References 14 1.0 Introduction Strategic management is a new business concept that allows for increased organizational efficiency. Through strategic management organizations in the global market have attained competitiveness. Through competitive management approaches such as planning, implementation and evaluation, organizations obtain sustainable market competitiveness giving them long term market merits (Blackburn, 2007, p.189). In this case, Dyson Company realized the merits associated with increased use of strategic management. Consequently, this vacuum cleaner in the global market adopted the principles of strategic management to obtain their current developmental status. However, changing market needs such as dynamic environments and competitors necessitate increased strategy change. As such, there is need for Dyson to adopt new strategies in its management structures. This report offers a review of the organizations current status, strategic options available and the implementation plan for these strategies. 2.0 Organizational Current Analysis 2.1 Environmental Analysis In evaluating organizational current situation analysis, it is imperative for an environmental analysis to be established. In this case, there are a range of tools and analysis tools available for the evaluation of these options. One among them is the Political economic, social and technological (PEST) analysis (Henry, 2008, p.61). In this regard, this report reviews Dyson marketing and operating environment through the application of this tool. 2.1.1 Political Analysis The political environmental climate represents the existing political goodwill for organizations operations. Dysons Company is currently a global organization serving markets across the globe. In this case, the corporation has manufacturing centres in China and Malaysia. Thus, its operations are not limited to the local UK political climate influence, but also to the international political climate. In the UK market the organization faces increased resistance due to its approach in offshoring its manufacturing operations. As such, its decision led to increased unemployment levels in the UK as evidenced by the unemployment of 100 employees up to the organizations decision to move some of its operations into Malaysia. Therefore, the organization faces goodwill challenges I the local UK market. However, the organization faces increased political goodwill in the international platform. For instance its operations and activities in China receive increased political goodwill. In this case, the Chinese political institutions support such operations through the adoption of policies such as the blending of free and fair trade. In this case, while as the economy allows for free trade through trading blocks and agreements, the economy regulates against unfair competition by allowing for tax subsidies and holidays for the disadvantaged players in the competitive industry. Thus, a current analysis reveals that besides the current hostile political climate in the UK, the organization faces increased political goodwill on the global platform. 2.1.2 Economic Analysis An environmental economic analysis incorporates the evaluation and development of organizational alternative through an analysis of present and forecasts on the economic development progression in an economy. Thus, it involves the adoption of appropriate economic development tools use such as earnings, savings and investment rates and expected inflation and economic stability. As already established Dyson Company, besides its increase influence into the UK markets enjoys increased influence in the international market. Thus its current situation analysis and future expectations is hedged on an evaluation of both the local and international economic progression. On its part, the organization has over the years experienced increased profit margins. This is as a result of increasing marketing conditions. The UK economy declined after the financial world crisis in 2008. In this period, consumers in the market reduced their spending to the minimum only retaining consumption of basic needs. Consequently, the purchase of Dysons Company products decreased. However, the UK economy is now recovering. As such, the economy has experienced increased earnings that increase the spending rates. On the global platform, in the Asian and African markets, the housing industry is on the rise. Lewis, Churchill and Tate (2003, p.123) conducted a study to evaluate the nature and growth expectations of the housing industry in the Asian market. In its analysis, the study revealed that the market experienced increased industry growth, with future expectations of increased growth. The organizations products serve as compliments in the housing industry. Thus, increased housing industry growth in these markets increases the organizations profitability options as the market share and customer base increases. 2.1.3 Social Analysis A social analysis involves the process through which the market social structures are evaluated. In this case, the process evaluates how the process of change or static social structures influences the functioning of market industries. In this regard, the household hygiene and cleanliness sector global social structures have changed. In this case, a social analysis on household management and hygiene reveals an increased commercialization of the process. Increased economic commitments in the European society have increased the hiring and use of commercialized agencies to conduct home cleaning. In this case, increased commercialization of the sector roles increases the use and purchase of modern cleaning and vacuuming machines. Therefore, through this approach, the market experiences increased opportunity for growth and expansion. Thus, Dyson Company has an increased current market opportunity and chance for growth in the changing social structures and responsibilities in households’ hygiene and cleaning. 2.1.4 Technological Analysis The technology industry is highly dynamic. In this regard, the drastic changes, through globalization impact and influence other global market industries, one among them households hygiene and sanitation sector. Technological developments have developed opportunities for advanced research conduction, analysis and prototypes development among others. In this regard, the international market has resulted to the use of modern research and design techniques. The sanitation industry hedges its success on design development and research to establish modern appropriate methods of ensuring hygiene and sanitation in cleaning equipment. Thus, technological development has facilitated the development of these product development aspects. Dyson Company hedges its competence in design and engineering. Therefore, technological developments have enhanced the development of new prototype development alternatives as well as cost effective production processes. These processes allow for reduced cost of production that increases organizational profitability potentials. 2.2 Competitor Analysis Organizational performance in the market is dependent on its market influence and establishment. In this case, in order to establish organizations market competitiveness, it is imperative to conduct competitor analysis in the industry (Grundy & Brown, 2006, p.5). In this regard, Dyson Company faces competitors both at the local and international levels. This review focuses on the organizations key competitors evaluated against the company’s strength. 2.2.1 Hoover Company The Hoover Company is a major competitor for Dyson Company. The company has similar business models with Dyson in which it patents all its products upon production. Among its merits and major strengths is its global presence. In this regard, the company has established a global a global presence through its diverse and efficient distribution channels. As such, the company has both physical and online platforms. In the online platform, the organization has online retail outlets that avail products on which customers can book and purchase the products online. This trait gives the organization an increased competitiveness against Dyson Company. However, the organization outsources its services such as designing. Consequently, this offers it a reduced market control over the product supply chain management. In this case, Dyson Company gains advantage over Hoover due to its increased supply chain management (Grundy & Brown, 2006, p.8). 2.2.2 Excel Dreyer Corporation The Excel Dryer Corporation is a USA based multinational company. In its operations, the company boosts of increased market strength through the adoption of a blend between direct and indirect distribution channels. In this regard, the organization facilitates increased direct contacts between the company and its customer base. Direct customer relations facilitate increased customer loyalty and satisfaction. Thus, Excel Dryer Corporation has established a stable customer base loyal to its products that other corporations such as Dyson Company find it hard to penetrate. However, the company has a weakness in its centralized production base in USA. In this case, the organization relies on the local USA resources. Moreover, the cost of acquiring international supply through global sourcing increases its production costs considerably. Consequently, the organization has a disadvantage in its high production costs. This is in contrasts with Dyson Company that adopts an international manufacturing, thus reducing on its cost of production (Grundy & Brown, 2006, p.10). 3.0 Available Strategic Options Based on the above Dyson Company environmental and competitors’ analysis, it is apparent that the organization has an increased growth potential. In this regard, there is a range of strategic options available for the organization. Such options include diversification and marketing 3.1 Diversification Gautam and Batra (2007, p.125) describe diversification as the process by which organizations engage in more than one line of production. In this approach, the market gains an increased influence on the market through diffusing competition. Diversification involves venturing into markets with reduced competition levels as well as increased profitability rates. In a bid to establish the rationale for diversification, Gautam and Batra (2007, p.127) conducted a study to establish the merits and organizational gains of diversification. In this case, the authors conducted a study on the nature and extent to which diversification enhanced increased organizational performance. In this case, the study adopted a hypothesis that diversification enhanced increased organizational performance. In its analysis, the study affirmed the study findings. In this case, the study established that diversified organizations registered increased performance than counterparts engaging in core business concentration only. In these findings the study highlighted two key issue among them customer base and competition. On one hand, diversification allows for the establishment of an increased customer base. In this regard, diversification is a process by which organizations seek to focus and target an increased market through establishing products and services into respective new markets. An increased customer base, translates into increased organizational sales that amounts to increased profit margins. On the other hand, diversification allows for reduced competition. In this case, diversification opportunities target new markets that lack competitors’ saturation. As such, investing organizations in the respective markets gain increased profit margins. Moreover, diversification allows for the spreading of risks in organizational performance. In this regard, organizations spread the loss risks on one product line. Consequently, organizations offset losses on one line of production with profits obtained from other production lines. Resultantly, such organizations reduce on overall organizational losses. The diversification strategic option presents an opportunity for Dysons Company to engage in diverse markets such to reduce on the established competition by organizations such as Hoovers and Excel corporations. 3.2 Marketing Marketing is an important support system in organizational performance. Although marketing plays no significant role in the direct production of organizational products, its role in facilitating increased sales and distribution in the supply chain. Ferrell (2013, p.270) argued that it is through marketing that organizations identify, develop and sustain market demands. Market demand can be achieved through two broad marketing strategies, either through push demand or pull demand marketing. On one hand, the push demand marketing approach involves the development of products with unique superior feature. In this case, organizations, through their innovation and product development systems develop products with unique characteristics, that they believe meet and satisfy the market needs. Consequently, upon the production of such products, organizations engage in marketing strategies to introduce them into the market. In this case, organizations push the products through the supply chain based on the products unique features. On the other hand, an alternative marketing approach is the pull demand marketing. In this approach, organizations rely on the market to develop products. In this case, corporations engage in increased market research to identify the market needs and wants. It is based on these wants that organizations develop products to meet both the current and future market needs expectations. The marketing alternative approach represents a viable strategic option for corporations. This option is applicable in situations that organizations do not wish to change their business models but are willing to change processes in order to enhance increase market competitiveness. The adoption of any of these alternatives by Dysons Company would enhance increased sales at constant capital investment, thus increasing the return on investment rates. 4.0 Recommendations for strategy implementation As evidenced above, the report establishes that Dyson Company has strategic alternatives in the execution of strategic expansion strategy. In this case, in order to exploit the strategic options of diversification and increased marketing the organization should develop an implementation plan through which such options can be executed. In this regard, the report recommends the development of an online platform and supply management structures for the organization 4.1 Online Platform An online platform is an imperative new concept in the globalized market today. As evidenced by the report study, technology continues to play an increased role in the development and expansion of organizations. In this regard, the study establishes that it is imperative for organizations seeking increased competitiveness to develop and adopt new technologies. As such, this report recommends the development and use of technology in Dyson’s company business processes. In this case, the organization should adopt a new business model. On one hand, the proposed new model should provide a new business platform. One way to enhance diversification is the use of an online business platform. In this case, the organization should invest in modern technology to establish an online store through which customers can purchase their products. Through this approach, the organization will diversify its operations and increase competitiveness against identified competitors such as Hoover’s corporations. On the other hand, an online platform will simultaneously enhance the achievement of the marketing strategic option. In this case, the organization will adopt internet marketing and advertising strategies. Consequently, this will increase the organizations market competitiveness (De, 2011, p.37). 4.2 Supply Chain Management As established in the report, multinational organizations face increased supply management challenges. Such challenges lead to increased global sourcing costs that reduce organizations profitability levels in the global market. In this case, the report recommends the development of a supplier’s management system for Dysons Company. In particular, this report recommends the establishment of management systems through which the organization connects and manages its supply base. Through efficient supply management strategies, the organization will reduce on its costs structures. Moreover, this approach will enable the organization achieve a demand pull marketing approach that will facilitate the development of market fit products. The adoption of this marketing approach will enhance reduced cases of product failure in the market as evidenced in the water drier machine developed by Dysons Company of which the market lacked confidence in its operations. 5.0 Conclusion In summary, the report establishes that Dysons Company remains a competitive Company in the global households’ hygiene and sanitation sector. In this regard, a company background reveals that the organization has its major strengths in its designing and engineering aspect in the production process. In addition, an environmental review, through the use PEST analysis tool reveals that the environment presents an increased opportunity for industrial and organizational expansion both at the present and in the future. In this analysis, the report reveals challenges in the UK political goodwill. However, economic social and technological analysis reveals that the current marketing environment favours the organizations current and future growth potential. Moreover, a competitor’s analysis of Hoovers and Excel Corporations reveals that despite the increased competition, the company remains competitive In order to enable the organization seize the increased market potential, the report identifies diversification and marketing strategic alternatives as the most viable alternatives viable to the organization. Consequently, the report recommends the adoption of an online platform as well as supply chain management structures for Dysons Company. Conclusively, the report argues that through the adoption of the recommended alternatives, the organization is bound to increase its market influence both at the present and in the future. References Blackburn, W. R. 2007, The sustainability handbook: [the complete management guide to achieving social, economic and environmental responsibility], Earthscan, London. De, K.-S. M., 2011, E-shock 2020: How the digital technology revolution is changing business and all our lives. Palgrave Macmillan, Basingstoke. Ferrell, O. C. 2013, Marketing strategy, South-Western, S.l. Gautam, V., & Batra, S. K. 2007, Organization Development Systems: A Study in Organization Behavior and organization Management, Concept Publishing Company, New Delhi. Grundy, T., & Brown, L. 2006, Be Your Own Strategy Consultant: Demystifying Strategic Thinking - The Cunning Plan, Thomson Learning, London. Henry, A. 2008, Understanding Strategic Management, Oxford University Press, Oxford. Lewis, R. A., Churchill, R. R., & Tate, A. 2003, Geographic perspectives on Soviet Central Asia, Routledge, New York. Read More