Analysis of Dyson Private Limited Company in Conjunction to Competitors and Working Environment - Essay Example

The Dyson Private Limited The Dyson Private Limited Analysis of Dyson Private Limited Company in Conjunction to Competitors and Working Environment: Dyson Private Limited, under the entrepreneurship of Sir James Dyson, is a UK based company. It delineates an overall economic corporate business outlook of a dominant successful venture with its product range, product reliability, corporate social responsibility and human resource management within the parameters of its existing operating business environment and being distinguished from its competitors. Basing the outcome on the company’s long-term market standing and competition, following is an S.W.O.T analysis for Dyson Private Limited Company. S.W.O.T Analysis: Strengths Weaknesses Innovative Technological Products Remote Manufacturing Facility Customer Solution Communication Barriers Elite Designing Human Resource Cost Of Production Opportunities Threats Global Markets Competition Innovative Products Economic Environment Increasing Product Range S.W.O.T analysis shows the internal strengths and weaknesses of the company and the external opportunities and threats in conjunction to the environment in which the company operates (Stimpson Peter,Farquharson Alastair, 2010). Primarily, Dyson Private Ltd.’s main internal strengths of are its human resource of the company, which consists of highly professional fleet of engineers and scientists including Sir James Dyson himself. Secondly, the company has an edge as a resultant of the cost saving which was achieved when the operations such as an introduction of a manufacturing assemblies being established in Malaysia, most significant strength of the company lies with the quality of products it offers to its customers. On the contrary, the weaknesses associated with Dyson Pvt. Ltd. are the remoteness of its operation in Malaysia that is the cost of transport incurred and the communication problems in Malaysian corporate culture restricting effective communication. Moreover, the external factors resulting in future opportunities and hence success for the company is the potential of customers in the global market for its promising products, similarly the continuous research and development of new prototypes and designs. External threat for Dyson Private Limited is mainly the competition from the home country and foreign countries, the main competitors for Dyson vacuum cleaners are Kerstar (Kerstar, 2014), which also like Dyson Co provides a large range of vacuum cleaners with alternative variations, such as dry vacuum cleaners, wet and dry dwarf vacuum cleaners, industrial vacuum cleaners, carpet vacuum cleaners and others. However, Kerstar’s pricing strategy is penetration pricing strategy, as per renowned UK ranker website (Brandes, Werner, 2014), Dyson Pvt. Ltd. ranks number 1, and for this reason, Kerstar uses this pricing strategy. Another major competitor confronted by Dyson Private Limited is the Big Brute Co (Big Brute, 2004). Big Brute Co. offers a wide range of vacuum cleaners from industrial, warehouse, and household use. Big Brute has a strong stance about their products’ reliability as it specializes only in vacuum cleaners and is also based in the United Kingdom. The pricing strategy used by Big Brute is a price-skimming strategy as price relatively high price to their products as compared to current prevalent market prices. In order to be efficient, they make sure every vacuum cleaner sold at any Big Brute outlet is free of defects and meet the required standards. Moreover, Vax Co. offers similar products as Dyson Co. in the UK market. Vax Co. is an expanding business as compared to Dyson Co. Vax Co. substantively expanded by offering a variety of vacuum cleaners for specified tasks and sale offers that aid Vax Co. to gather a large amount of potential customers into buying Vax Company’s vacuum cleaners. The pricing strategies at Vax Co. is more than one this is due to the state of the products that is when a product is launched then at that time skimming price strategy is adopted by Vax co and at a time when the product reaches its maturity then at penetration strategy and price concessions are offered. This shows that Vax Co.’s curiosity to provide vacuum cleaners to each and every customer so that it can get to the top and become a market dominant. For Dyson Co, this is an alarming situation as Vax Co shows concrete signs of rivalry (Vax Limited, 2014). In addition, Sebo Co. is a Germany based company that also offers high technological vacuum cleaners. The demand for Sebo Co.’s vacuum cleaners is not great in the UK market because of their high prices and inconvenience of any incentive by the UK government for foreign companies like Sebo Co. In order to retain Dyson Co.’s current customers, the company must invent new products that are unique and different from its competitors like Sebo Co. For instance, if in the near future Sebo Co reduces the price of its upright vacuum cleaners then it will instantly capture Dyson’s potential customers. Therefore, to avoid this product switching in the future Dyson must provide highly differentiated products (WebMade Media, 2014). Referring to the product line of Dyson Private Ltd., bladeless fans are one of the unique inventions at the Dyson. This has taken fans to a next level and assures Dyson’s customers that technological advancement and continuous research and development are taking place ensuring their confidence in the company’s future. Fans being a highly purchased product have plenty of manufacturers like the Fan Manufacturers Co., Bob Stevenson Limited, Fans and Blowers Limited, and others. The unique selling proposition that Dyson Co has for fans is the new bladeless and grill free fans, which are user friendly and consume less energy. This evidently shows the success and less focus for Dyson Co on its fans technology, but research and development is a must for the complete product range of Dyson Co. In conjunction, the hand dryers and heaters are made to perfection at Dyson Co. Sir James Dyson with his dedication to invent new machines has after many prototypes produced a hot plus cool heater, which is a unique two features user friendly invention with 75% lesser sound. This heater is small, portable, and capable to blow a hot air balloon giving the company a competitive edge over its competitors such as Vokera (Vokera, 2014), Ferolli Co. (Ferroli Uk, 2014), and Elmatic Co. However, the competitor heaters are not as standardized as compared to Dyson Co. in terms of design and cost and most importantly the value added features. Evaluation Of Strategic Options Now Available To Dyson Private Limited Company: Strategic decisions governing the long-term supremacy of Dyson Private Ltd. are taken at the top management level. In order to evaluate the strategic options available for the business, the following are the findings based on the P.E.S.T analysis (Political, Economical, Social and technological) (Pamela, 2004). Political: To begin with the political strategies and conditions impacting the long term corporate strategic vision of Dyson Limited Company, either getting a loan for business expansion such as opening a new factory or raising fund has been made difficult for Dyson Co. This is due to the sanctions on large companies to pay progressive interest on loan this sanction has made loan less reliable and hence forced Dyson Co to alter its strategic planning. Economic: As per Economist a renowned publication, a general decrease in disposable income resulted in the market being unfavourable condition for the industry to expand its business as the purchasing power of consumers is adversely affected, Significantly impacting sales of consumer products, as a result of instable demand Dyson Co in an attempt to gain cost saving from costs of production considered to move production of upright vacuum cleaner to far East for its cheap labour costs resulting in the closure of its factory in Wiltshire with 590 labour out of jobs. Outsourcing roles associated with raw material, production and distribution Dyson Co integrated with (VSI) a Malaysian electronic manufacturer through a partnership. Social: Social trend prevailing suggests that demand stimulation is generated from individual household unlike commercial consumer resultant of an increased demand of vacuum cleaner by individual consumers. Dyson Co confronting a continuous change in consumer taste and demand trends and fluctuating business risk associated environment, would find it difficult to keep up with the pace of change of the latter mentioned parameters. However, Dyson Co has always kept itself up to date in terms of technology. Technological: Majority of Dyson Co. products are user friendly and hence not so sophisticated and comparatively easy to copy due to technological advancement. With a corporate history of success through market innovation Dyson Co has been a market leader having a technological edge over competitors but this is far from true as is evident from the companies performance that it is loosing its technological edge to competitors for instance telescope vacuum cleaner has been in competitors reach as well. In order to maintain its brand name in the UK market Dyson Co should ensure that it still maintains a technological edge in products compared to its competitors. The production has become more automated and standardized, environmental awareness has increased hence questioning it as market dominant. Moreover, the scope for Dyson Co in expanding operations is limited by the high interest rates for loans. This signifies that any business expansion is restricted at this time period unless the Finance Personnel’s at Dyson Co think of paying the interest if it is worthwhile or any other options that go with the businesses mission statement. The economic outlook of the business is uncertain this is due to the fact the decrease in the disposable income of customers that means that less money to buy products and economically it means the demand for products such that Dyson offers decreases. Comparatively, the cost saving that is achieved by Malaysian manufacturing means that Dyson has a competitive edge over its competitors in the market. Sir James Dyson laid foundation CSR (Corporate Social Responsibility) throughout the organization. This foundation strives towards providing certain facilities to the young generation so that their engineering instincts could be developed more through a three step process that involves teach, learn, and compete with the primary aim of the foundation being empowerment and innovation and inspiring a new generation of engineers. Porter’s five forces analysis On A Scale of One To Five: Threat of new entrants: Moderately high (4) Lower cost associated with suppliers entering the market. Bargaining power suppliers: Low (1.5) Suppliers having inadequate knowledge of the existing technology. Threat of substitutes: Low (2) Designs are patented and protected. Whilst there are other similar designs none are as advanced as Dyson Co.’s. Bargaining powers buyers: High (4.5) Customers having perfect information of places to buy from and prices to buy at Competitive rivalry For Dyson Private Limited: High (4) In this report, the main concentration is on Dyson’s strategic analysis and options available to it. Competitor rivalry can be seen from the above information as the product of all four powers. In home appliance industry, with the passage of time competition for Dyson Co has been high and increase of demand for a particular product by individual customer ensures a further increase in competition. In todays fast pace environment, the necessity of using such modernized equipment has become very essential. Again the presence of many companies in this industry has opened up a wide range of options that are available to consumers and as a result this has substantially reduced the switching cost; this again has increased the rivalry among the companies in this sector. In this sector, the market share of companies tends to change very rapidly because of the introduction of newer and advanced models of appliances, which only increase the competition of firms striving to be market dominators. Threat of substitutes means the availability of other similar products. Home appliance market is a very competitive market to survive in; this can be illustrated by considering the following example. For companies operating to sell cooking items the main competition is derived from frozen ready to be eaten food providers, which are found in substantive amounts in supermarkets and departmental stores as a result of stimulation of demand by consumer. This has assured the competitive edge of Dyson Co.’s products so that it can attract more customers to itself. Recommendation for Future Strategic Route and Methods for Implementation of Above Mentioned Options: Deciding on the strategic options available and then constructing a strategic process for future endeavours of Dyson is done with the aid of Ansoff matrix that entails the strategy to be adopted for the current or potential market as follows: Ansoff Matrix: Ansoff matrix for Dyson Co depict that for upright vacuum cleaners Dyson Co should increase its sales of this product in the existing market. This is due to the fact that by this Dyson Co will be able to increase the number market share in the existing market and with existing products, also market development is to be achieved for existing products such as the vacuum cleaner DC12 in foreign or new markets. This strategy will allow Dyson Co to sell its vacuum cleaner dc12 that is an existing product in new market. Similar to this product development, the development and sale of new products like the vacuum cleaner DC11 in the existing market that is the United Kingdom market it will allow Dyson Co to increase customer loyalty by continuously fulfilling their need. Diversification that is the process of selling different unrelated goods or services in new markets signifies that Dyson Co must explore and identify opportunities in the American, Japanese, and Australian markets with new innovative products. With reference to renowned Forbes magazine Sir James Dyson among other individuals is ranked 328 with a net worth of $4.5 billion (Forbes LLC, 2014). In conclusion, reviewing and conducting an extensive strategic analysis on Dyson Co.’s business organization there are few recommendations to be emphasized on with reference to Dyson Co. these are that first of all the company should enter in trademark and copyright laws of their product preventing the design and innovation of Dyson Co to be exploited by competitors In addition Dyson Co should consider taking the supply chain in hand leading to costs associated with suppliers to be minimized, also it should see to minimizing the supporting costs associated with its value as this would help Dyson Co in obtaining a competitive edge. Dyson Co given the state of rivalry and business risk associated with the environment it operates in should consider relaxing its pricing strategy securing its position as market dominant. Dyson Co should continue spending in R&D as this ensures its technological edge in the market but it should make sure that the cost does not outweigh the cost of conducting R&D for a particular product. The company should conduct market campaigns and create awareness in the potential customer about its pricing strategy and uniqueness as compared to other competitors, a new method or even portal can be introduced so that their current on-going products complaints can be administered and strengths and weaknesses can be scaled and evaluated. Most importantly like Sir James Dyson’s foundation where from a young boy to mature man everyone is encouraged to pitch in their skills in to producing new products and designs enabling a more decentralized network allowing colleagues to share their ideas so that the working environment will be at optimum. Hence, CEO Max Conze, 42, currently controls Dyson Private Ltd. The company is competent to achieve more growth and has the potential to be the market leader. Also, the company has a remarkable past of successes and ability to incorporate such proposals that will strengthen its position and increase its chances to strive to success in the near future. List of References Big Brute, 2004. Big Brute Industrial Vaccume Cleaners. [Online] Available at: http://www.bigbrute.co.uk/products/ [Accessed 16 March 2014]. Brandes, Werner, 2014. Ranker Website. [Online] Available at: http://www.ranker.com/list/vacuum-cleaner-brands/werner-brandes [Accessed 16 March 2014]. Ferroli Uk, 2014. Ferroli. [Online] Available at: http://www.ferroli.co.uk/ [Accessed 16 March 2014]. Forbes LLC, 2014. Forbes. [Online] Available at: http://www.forbes.com/profile/james-dyson/ [Accessed 15 March 2014]. Kerstar, 2014. Kerstar Products. [Online] Available at: www.kerstar.co.uk [Accessed 16 March 2014]. Pamela, M., 2004. Management Pacific Rim Focus. Australia: McGraw-Hill. Stimpson Peter,Farquharson Alastair, 2010. Business Studies. Edinburgh: Cambridge University Press. WebMade Media, 2014. SEBO Works For me. [Online] Available at: www.sebo.co.uk [Accessed 16 March 2014]. Vax Limited, 2014. Vax youre home. [Online] Available at: www.vax.co.uk/ [Accessed 16 March 2014]. Vokera, 2014. Vokera Heating For Life. [Online] Available at: www.vokera.co.uk/ [Accessed 15 March 2014]. Read More