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Dyson Corporate Strategy - Case Study Example

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The author of this case study "Dyson Corporate Strategy" comments on the concept of strategic management. According to the text, Dyson Company is a private limited company that deals with the creation, designing and manufacturing of high-performance appliances for diverse applications…
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Dyson Corporate Strategy
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Dyson corporate strategy [Insert al Affiliation] Introduction Dyson Company is a private limited company that deals with the creation, designing and manufacturing of high-performance appliances for diverse applications (Bloomberg Businessweek, 2015). The company is owned by James Dyson, who is also the founder. It is headquartered at Malmesburry, Wiltshire in UK. The organizations products are utilized in many sectors, but it’s most famous in the manufacture of vacuum cleaners. Dyson Company registers abnormal profits from the sale of its products due to both high-quality products and the private ownership. The organisation has a worldwide network and international presence, a strategy that enable it to earn a substantive share of the market in the most competitive markets like the USA, UK and China. Dyson’s success can be attributed to the exceptional and robust strategic abilities that boost its competitive edge. The company corporate strategies can be analysing through investigating its current position in terms of environment and competitors, as well as its strategic options. PESTEL Analysis Political: Dyson Company is a UK appliances manufacturer. The raising of funds in UK is not usually easy because the rates of interest that has been high. Fortunately for the company has been able to sign a deal with a Japanese company, which led to it invest in R & D. Dyson Company requires a considerably huge amount of money to engage in R & D. The organization does certainly not receive considerable favour from UK governing bodies; it was, nevertheless, bold enough to come up with startling innovations that have startled the industry (Hollensen, 2007). Economic: the contemporary market situation does not offer favourable conditions to any industry to expand its business, mostly for those that relate directly to consumers. There has been an unfavourable demand of the vacuum cleaner manufacturers in Wiltshire, and hence the organization has to close down its manufacturing plant. Dyson Company is considering relocating its vacuum cleaner manufacturing firm to the Far East where the cost of labour is relatively cheaper (Hollensen, 2007). The company presently have 1150 human resource that still work in its factory despite the layoff. According to research the market share of the company by volume, has gone down 25% over the past five years. Social: The critical factor that attributed to company success in the vacuum cleaner industry is the ability to mollify the apparently shifting demand. A burdensome aspect for many organizations in the vacuum cleaner sector has been tracking the tastes, needs, and preference of the consumers, but luckily the organization has been updating itself technologically. The companys founder strongly believes in investment has the only way that keep the organization a competitive edge. Technological: The Company has always been ahead in term of competition due to its ability to innovate fresh technologies persistently over time. The organisation remains as the leading vacuum cleaner product in the UK, but it is currently losing out to inexpensive machines that have imitated Dyson brands with their less technical know-how. Dyson enjoys new business development manners that have helped it to detect existing technologies. The company, after successfully inventing the vacuum cleaner, went ahead the anticipation to create a fresh appliance brand, a new laundry machine known as the contra rotator which was successfully launched the year 2000 (Hollensen, 2007). Many believed that the machine, considering its blustery washing action, seemed a perfect replacement of its predecessors as it was highly efficient. Furthermore, Dyson is also striving to develop an extra a hundred and seventy five inventions with the capacity to store or compress and believe that completion of the inventions will be a major breakthrough. The company also engages in conducting research to find new solutions to daily problems. Dyson research team continually seek new and better techniques, tool and approaches to enhance each aspect of its technology. Dyson asserts that they double their investment in every two years. Environment: The Company has never involved in disputes related to the environment due to its full engagements in the manufacturing and researching of the products intended to be leaders in cleanliness. Legal: Dyson asserts itself has a cleaner with transparent bin, and it is the product is well known for environment friendliness. As prove to the claim the organization got a trademark registration that challenged the trademark appeal process in the UK. Community trademark application 2118079 was filed at OHIM in February 1996 (Philippsohn, 2003). The trademark was not registered resulting in problems over the graphic representation and OHIM re-utilization to a failing date. Dyson application ensued with a number of photographic perspectives on a particular design of the bin without its claim as a priority. The insufficient in clarity in Dyson’s graphic representations was ironically an impending block for the organization to apply its trademark application. Dyson Company had to face a number of challenges but had sustained itself in the competitive market claiming and to prove it is the best. Porter’s five forces analysis The porter five forces technique, as was given by Michael Porter, is an essential tool that can be utilized to analyse an organization and an industry as a whole (Porter, 2008). This report has focused on the efforts of Dyson Company, which deals in the manufacturing of vacuum cleaners. It is very critical to investigate the company home appliance industries so as attempt and comprehend how this sector operates; this report has considered the help of the porter’s five forces model to analyse the company. The home appliances industry has an immense degree of rivalry among firms, and this has been an increasing trend in the recent past as showed by the diagram above. The need for these home appliances in the modern day households has significantly contributed to the increasing of this trend. In the present time household, the use of modernised equipment has but only become an essential aspect. The existence of several companies in the industry has open up a wide variety of options that are readily available to the users and consequently decreased the costs of switching. This reduction has heightened rivalry among the firms in this industry. In this industry, the share of the market for the company tends to change quickly due to the introduction of newer and advanced mode of appliances (Piercy, 2011). Thus, firms attempt to hold their existing market share as well as increasing it but this only heightened the rivalry among the firms. The threat of substitute implies that there are several available other same products in a different industry. For this industry, the threat of substitution is considerably high. In the industry, the barrier to the entrance is mostly due to the initial costs of setting up is extremely high. In addition, the need to boost and advanced research and development team is imperative for any firm to be triumphant in the industry. Consequently, constant research and development is always a must. This persistence in R&D helps a firm to innovate fresh and better brands in order to retain the market share and gain an advantage over the competitor. The vast capital to carry the initial investment and cost constitute a major limitation to many firms that want to enter the industry. VRIO framework The attributes of Dyson Company can be presented by the use of Barney’s VRIO framework (Falkenberg & Brunsæl, 2011). This structure values the biggest resource of the firm, which is its brand name. The ability of the firm to create awareness of its products is an invaluable asset to it. The company enjoys an already reputable know-how in designing their products, engineering them, and selling unique vacuum cleaners. It has employed the above attributes to utilize prospects to venture into its respective industry (Piercy, 2011). Our current company, Dyson, produces brands that are rare to compare to competitors because of its uniqueness in product designing that is profoundly entrenched in operative engineering. The company’s outstanding model, that has currently attracted many consumers, the hand-blade-hand-dryer dries water in a matter of seconds and at the same time uses minimal energy (Dyson, 2001). Strategic resources and capabilities Early inventions are one of the company’s core competency and strategic capability (Bruce & Bessant, 2002). Dyson Company first brand was introduced in 1970. The products generated revenue of $ 500 million. The second brand by the organisation is the “Ballbarrow” which was a customized version of the wheelbarrow using a ball in place of the wheel. The organization retained the ball idea and further invents the trolleyball, which was launched for boats. This early invention and persistence in innovation are critical the company success in the sector it’s operating. The vacuum cleaner is another core resource and capability. The founder of the firm introduced a world first bagless vacuum cleaner called the “G-Force” in 1983. The product was one of its kinds and could not be comparable to that day cleaner machines. Dyson Company also has a strong brand among its customers. The perception of a consumer on the brand, as well as its attributes, is inextricable due to the perceived superiority that it obtains from a range of factors such as technical excellence and money value. Strategic options Currently, Dyson Company has an upper hand in terms of using innovation to create different ways and adding value through design (Hooley, Greenley, Fahy & Cadogan, 2001). This ability to innovate has enabled the organisation, a newcomer in the industry to become a market leader as well as forcing a reaction from the well establish manufacturers. It is the ability to apply innovation that has earned the company the competitive edge. Thus, the innovative spirit of the organization is its most valuable resource. In essence, the innovation has facilitated the firm performance in creating a difference by providing a greater value to the consumer and offering additional benefits. Dyson Company has successfully gained a place as the leader in the market in innovative products and to maintain the same as well. Moreover, Dyson Company has also outsmarted its competitors in terms of brand recognition. The company has strong brand recognition due to its innovative design. Its broad brand recognition among the consumers can be attributed to the innovator methodological approach of both marketing and innovation in the cleaner machine. Dyson uses both words of mouth and giving narrations of heroics battle other than brand building in marketing. These approaches allowed the company to provide brands that are beyond expectations and superior design and performance. In an effort to sustain its competitive edge, Dyson has persistently continued to create innovations. The company created a whole new cyclone system with a higher suction. In addition, the company created the robot cleaner that makes cleaning easier as well as providing the guides that are more logical than a human being would be. It is worthwhile to note that Dyson invest hugely in its engineers to enable be ahead in terms of technological innovation. Mostly, Dyson’s established competitors are a bit complacent in engaging in innovation. These old competitors in the industry saw no need of being innovative in the developing cleaning equipment. Dyson identified the inefficiency of the then cleaning machines and proceeded and creatively came up with vacuum cleaners with the help of technology. The idea of the bagless vacuum enabled Dyson to attain immense success by meeting the high needs of high-end customers as claimed by Piercy, (2001). It initially relied on word of mouth and recommendations in selling the products. Nevertheless, it later adopted informative advertisement. The company realized it was facing stiff competition and the importance of advertising; it opted to boost its ad budget. In 2002, the company contracted pan-European advertising in order to market its brands in all of Europe other than UK (Oh, Park & KO, 2002). A significant number of its competitors attempted to employ a unique brand personality over the years. For instance, the GE tried to strategize its vacuum by publicizing as the housewife’s, Milie, friend pursuing easiness. Dyson entered the US market with 350 percent excess sales from 2003 to 2005 (Oh, Park & KO, 2002). The distribution adopted by the company is that of the US and mainly a mass distribution technique that was available in greater than 1500 locations. The organisation took on a selective distribution strategy in some scenarios like in the vacuum-Direct.com, which is an online speciality retailer that provides Dyson and Miele vacuums exclusively. In addition, it distributed its products in the US market via popular department stores and the mass retailers. Recommendations The company is ought to continue to capitalize on its successful merits of premium quality, as well as an innovation of its products. Essentially, this innovation should focus more on the needs of the consumers rather than just some impressive characteristics. It is the consumer who will finally qualify the quality of a vacuum cleaner by simply how efficient it is when cleaning (Piercy, 2011). A similar idea should be applied to the washing machines and similar categories, Dyson should concentrate more on better cleaning. In order to remain selling at a premium the company is ought to revise its pricing techniques, but this should be done within a reasonable variation from those of the competitors. A price that would be too low in comparison to that of the competitors may shy away customers. Thus, the price should be sensible enough for customers to favour still in exchange for quality. Dyson Company should reconsider its marketing strategy from a global point of view. A standardized global strategizing should be emphasized as a top technology, premium product and British-made quality (Hollensen, 2007). The company has not yet established a vivid product personality as done by its worthy competitors; thus there is a need for it to do so. Dyson’s marketing strategy should be guided by aspects such as the future brand image, tomorrow technology and stylish appliances and world class cleanness (Piercy, 2011). The company should concentrate more on emotional appeal in its advertisement campaigns as a premium brand. The emotional appeal of its technology is an increasing aspect of advertising alongside the right reasonable amount of the features benefit of the products. In as much as the mass distribution has been a success in the US, it is not advisable for Dyson to adopt the strategy for premium products. The company should combine the benefits of mass and selective distribution through agreements with wholesalers and retailers to show its products in separate and differentiated kiosks. The stores to be use should possess strong place branding and associate branding activities and promotions. A similar case applies to the online retailers where the company can have its exceptional web pages with outstanding branding, consumer experience and characteristics that are different from those of the rivals. The company should also consider to advertise using household multiples and grocery multiples to deal with the expanding worldwide trend for preferences of consumers in shopping styles. References Bloomberg Businessweek. (2015, April 22). Dyson Ltd.: Private Company Information - Businessweek. Retrieved from http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=6462150 Bruce, M., & Bessant, J. R. (2002). Design in business: Strategic innovation through design. Pearson education. Dyson, J. (2001). U.S. Patent No. 6,256,832. Washington, DC: U.S. Patent and Trademark Office. Falkenberg, J., & Brunsæl, P. (2011). Corporate social responsibility: A strategic advantage or a strategic necessity?. Journal of business ethics,99(1), 9-16. Hollensen, S. (2007). Global marketing: A decision-oriented approach. Pearson education. Hooley, G., Greenley, G., Fahy, J., & Cadogan, J. (2001). Market-focused resources, competitive positioning and firm performance. Journal of Marketing Management, 17(5-6), 503-520. Oh, J. K., Park, K. C., & Ko, J. Y. (2002). U.S. Patent No. 6,406,505. Washington, DC: U.S. Patent and Trademark Office. Philippsohn, S., & Thomas, S. (2003). IP Theft & Corporate Espionage: Remedies. Computer Fraud & Security, 2003(9), 9-12. Piercy, N. F. (2001). Market-Led strategic Change: new marketing for new realities. The Marketing Review, 2(4), 385-404. Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40. Read More
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