Vacuum Cleaner Industry - Essay Example

Vacuum cleaner industry – Exploring organizational development and strategies AFFILIATION: Vacuum cleaner industry – Exploring organizational development and strategies Introduction of Vacuum Cleaner Industry In the market, the vacuum cleaner industry has grown exponentially as the consumers are using these appliances for keeping their residential and commercial areas clean and hygienic. The industry has evolved from simple suction vacuum cleaners to robotic cleaners and most of the leading companies are making sure that their products are eco-friendly ones. There are many types of vacuum cleaners available in the market but they are mainly categorized as upright cleaners, handheld cleaners, cylinder/suction/canister cleaners, stick cleaners, Dry/Wet cleaners, Extractors, Bagged, No Bags, three-in-one cleaners and iRobot cleaners (BIS, 2011). With the advent of time, the vacuum cleaner industry has undergone drastic changes. The globalization of the markets, rapid developments in the technologies, easy access to cost-effective manufacturing destinations and growing concern for eco-friendly products and services have stressed the need of modifying the organizational structures and strategies (European Commission, 2009). The vacuum cleaners are supplied in accordance to the demands of the customers, government, society and environment so that every stakeholder can get benefitted. All the key players of the vacuum cleaner industry such as Dyson, Dirt Devil, Electrolux, Kirby, Hoover, Vax, Black & Decker, Miele, Oreck and many more have same organizational structures and strategies. However, they differ in terms of their competency level and product differentiation strategy. Development of Vacuum Cleaner Industry The early form of vacuum cleaners was the self-contained ones which were the foremost and sole suction machines. These first machines were introduced and invented in Europe by Hubert Booth in early period of 1900s and his company’s name was Goblin. Next, the upright vacuum cleaners were created which had a revolving brush for loosening the debris. These appliances were conceived by James Murray Spangler and a few years later were introduced in US by Hoover. The early entrants of the vacuum cleaner market in UK were Electrolux in 1908, followed by Vorwerk in 1929 and Miele in 1931 (European Commission, 2009). During the period of 1960s, the concept of professional carpet cleaning was inaugurated. This latest trend was refined by Alan Brazier under the brand Van in 1980s. This was the turning point in the European vacuum cleaner industry as Vax Ltd. took over more than half of the UK market by the end of 1980s. Hoover and Bissell launched the extractors or upright carpet washers in Europe and US in the early years of twenty-first century. In 1911, James Dyson prefaced the new vacuum cleaners i.e. cyclonic filtration bagless cleaner in Japan. He even won the prize for such an extraordinary development and later introduced these machines in Continental Europe and UK with the brand name ‘Dyson’ in 1990s. In UK, these types of vacuum cleaners dominate the industry but the bagged machines are still demanded in other EU countries like Germany. Dyson has an edge in the market for inventing the cyclonic system of filtration (European Commission, 2009). In the early 1980s, Black and Decker inaugurated the cordless handheld vacuum cleaners in the EU market. Miele introduced the concept of highly efficient filter media form of disposable bags which made sure that the bagged machines’ performance was well-maintained during filling. As the plastics were being replaced in place of the metals in the 1970s and the electric motors were being developed, there were claims for large amount of input wattage. Currently, the EU vacuum cleaner industry has entered the maturity stage and majority of the homes in the Europe have more than one vacuum cleaner (European Commission, 2009). Impact of the companies in the industry Vax is a UK based company which has been present in the vacuum cleaner industry since its inception in 1977. The owner developed a machine prototype which is suitable for the household with competitive feature of cleaning the carpets and removing the liquid items. Initially, the company sold its products via door-to-door sales and the company is known for launching the new invention ‘Orange Tub Model’ in the vacuum cleaner industry. Vax EV was developed in 2011 as a working model for the initiation of the cardboard vacuum cleaner category. Currently, the company is offering a broad selection of products related to washing carpets, cleaning hard floor, vacuum cleaning, floor-care accessories and steam cleaning. It has its manufacturing plant located in China to reap the benefits of low cost production (Vax Ltd., 2013). Dyson is a UK based technology company which was incorporated in 1993 by James Dyson. The organization is involved in designing and manufacturing of hand dryers, vacuum cleaners, heaters and bladeless fans. At present time, it is selling the machines in more than fifty countries and has employee strength of 3,100 people. The founder created about 5,127 prototypes in between 1979 and 1984 before he developed one vacuum cleaner which worked with perfection i.e. DC01 (Dyson, 2013). Hoover did not support Dyson in acquiring the license so the owner went to Apex which is a Japanese company and built G-Force. In 1993, he opened a research hub and factory in England. The owner decided to take the risk of introducing a transparent container for dust collection and it was a huge success in the market. After success of the cylinder machines, he launched the root cyclone in 2001 i.e. Dyson DC07. Till 2009, it started production of other air-powered machines such as the Air Multiplier Bladeless Fan, Dyson Hot (Bladeless Fan Heater) and AirBlade hand drier (Dyson, 2013). In 2002, Dyson Ltd. shifted its production facility of vacuum cleaners to Malaysia (European Commission, 2009). Hoover Company initiated its operations as a US based floor care manufacturer in North Canton in Ohio. In early to mid 20th century, the company established a strong base in UK i.e. 1946 by starting its production in Cambuslang located in Scotland. In Merthyr Tydfil in Wales, it inaugurated its factory for the washing machines’ production and it became the market leader in UK quickly. Till 1980s, Hoover Group carried on with their expansion plans and became famous for reorganization of their control, production and governance. As a result, the production of vacuum cleaners was shifted to Cambuslang. There was a series of ownership changes from 1985 onwards. Hoover international activities were acquired by Chicago Pacific Corporation which was acquired by Maytag Corporation in 1989. Hoover UK and Hoover Trading Company merged together to Hoover European Appliances Group in 1993 and it was acquired by Candy Group in 1995. Presently, Hoover is well-reputed for being the dominant player in the floor-care industry of Europe. The company is engaged in production and marketing of a diverse range of products which fall in the positioning of medium to high level. All of its offerings are developed on three key factors i.e. enhanced performance, breakthrough designs and continuous innovation (Hoover, 2013). Strategies of the companies From the detailed analysis of the information provided about the companies, it is evident that each of them is trying to attain a competitive edge in the vacuum cleaner industry. All three organizations have flat organizational structures so that the communication among the employees is fast and effective. Even the work atmosphere comprises of teams so that the innovation can be encouraged. In order to monitor the performance of the company and its employees, each one of them has developed an effective Performance Management System (PMS). Dyson Ltd. has implemented an IT system developed by IBM which makes sure that the employees are well-aware of their targets. PMS at Hoover involves both the supervisor and the employee so that they can decide on the employee’s objectives on consensus basis. However, Vax Ltd. has developed a simple form for performance assessment so that the employee’s performance can be reviewed at the year end. However, each organization boosts the team work so that new ideas can be tested and innovative products can be offered to the customers. In order to motivate the employees, the reward strategy varies according to the individual’s set of preferences in each organization. Financial aspects of the industry Dyson Ltd. is leading the vacuum cleaner sector of UK by having 20% retail sales share as of 2012 followed by Vax Ltd. and Hoover Candy Group which have 10% and 8% shares respectively (Bodimeade, 2013). There has been a marginal decline of 1% in retail sales in 2012 as compared to 2011 as there has been an increase in the unit price and even slow replacement of vacuum cleaners (“Vacuum cleaners in the United Kingdom”, 2013). Future prospects of the industry According to United Kingdom vacuum cleaners market: 1% growth in 2012 (2013), the vacuum cleaner industry is expected to achieve retail volume CAGR of 1% in the upcoming years and will increase significantly in the years ahead. The primary reasons for robust performance are enhanced awareness about innovative products which will be introduced as they will have improvised functions and will offer convenience to the customers. There will be an increase in demand for the cylinder vacuum cleaners as compared to the traditional upright ones as there is growing trend of shifting to laminate or hardwood flooring from carpets. It will definitely help the country’s economy in boosting its performance and reap the benefits of doing trade on the international level. Summary In UK, the vacuum cleaner industry has bright prospects as there is a huge market for these appliances in home and commercial avenues. It is even projected that the leading companies of the industry i.e. Hoover, Dyson and Vax will continue to add highly innovative and advanced vacuum cleaners in the market. the retail volume sales is expected to increase by 1% in the future and the demand for these appliances will continue to increase as people have become cautious about the hygienic environment of the houses, offices and all residential and commercial places. Hence, the UK vacuum cleaner industry is an important constituent for the accelerating performance of its economy. References BIS. (2011). Power Electronics: A strategy for success – Keeping the UK competitive. Retrieved November 15, 2013 from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31795/11-1073-power-electronics-strategy-for-success.pdf Bodimeade, M. (2013, April 29). Dyson continues to lead the way within the UK vacuum cleaners market. Retrieved November 15, 2013 from http://uk.finance.yahoo.com/news/dyson-continues-lead-way-within-000000358.html Dyson (2013). About Us. Retrieved November 15, 2013 from http://www.dyson.co.uk/ European Commission. (2009). Work on prepatory studies for eco-design requirements of EuPs (II) Lot 17 Vacuum Cleaners. Retrieved November 15, 2013 from http://ec.europa.eu/energy/efficiency/studies/doc/ecodesign/eup_lot17_final_report_issue_1.pdf Hoover. (2013). About Us. Retrieved November 15, 2013 from http://www.hoover.co.uk/about-us/ United Kingdom vacuum cleaners market: 1% growth in 2012. (2013). Retrieved November 15, 2013 from http://news.wooeb.com/1472489/a70079/united-kingdom-vacuum-cleaners-market-1-percent-growth-in-2012 Vacuum cleaners in the United Kingdom. (2013). Retrieved November 15, 2013 from http://www.euromonitor.com/vacuum-cleaners-in-the-united-kingdom/report Vax Ltd. (2013). The home of clean. Retrieved November 15, 2013 from http://www.vax.co.uk/about/ Read More