Dyson – a distinctive company

Module: Corporate Strategy

Assignment title: Dyson – a distinctive company

Produce a report to complete the following:

1. Analyse the current position of the organisation in relation to its environment and competitors.

2. Evaluate the strategic options now available to the organisation.

3. Recommend the strategic route forward and the methods for implementation of your chosen options.

Company’s Profile

Dyson Ltd.is a British, private company founded in 1991 by James Dyson. Headquarter in Malmesbury, Wiltshire, UK. It’s a technology company which design and manufactures vacuum cleaners, heaters, hand dryers, bladeless fan and groom tools. Dyson Ltd. becomes global company by selling its products in over 50 countries such as Canada, Spain, France, Belgium, Netherlands, and Germany. However, decide to export in competitive markets like USA, China and Japan. Although, Dyson Company survives into competitive markets and the profit of it, start to rise even more each year.

Part A: Company’s Current Position

Dyson is a company which created by an idea to improve vacuum cleaners with no bags. Few years later become one of the biggest selling company in Britain. Although, that company stood into the market and create a good reputation with it’s brightly coloured vacuum cleaners. So, James Dyson decides to expand his company by exporting to other countries. Firstly, decide to place the manufacturing part of vacuum cleaners to Malaysia and his hand dryers to China. As he said, he needed to follow his competitors to lower cost manufacturing as margin were being eaten.(“Inside Dyson”, Jill Shepherd & Simon Fraser).Furthermore, Dyson become a global company by selling its products in over 50 countries, even thought to the countries which belong to a highly competitive markets, like USA, China and Japan.

However, that company for the very beginning has something different; the creative and unique ideas of James Dyson. So, he tries to place the company into a different market position than his competitors. Dyson Company has its strategy to produce innovative products with bright colours to attract more easily the crowd and stand out to the market. Moreover, Dyson promote its products like new, different with a radical change. As the chief executive of the company said “Our success is down to the new idea and the work of teams around the world”. (Finch, J. 2010).

Internal Analysis: SWOT Analysis

In addition to PESTEL and Porter’s 5 Forces analysis, by performing SWOT analysis through strengths, weakness, opportunities and threats can more easily realise the positive and negatives of “Dyson”. Although, through that analysis the current position of “Dyson” is more obviously.

Strength

Innovation: The most important strength of the company. James Dyson believes that innovation is a way of life. So, he adopts that belief into his working environment. Company use technology to produce its products and make the people’s life easier. Actually that company turning the ideas to working machines so simple just by working hand with technology by their side. From bag less vacuum cleaners to energy efficient and time efficient dryers to desk fan with no blades.

Design: Innovative product is good but combine it with a great design makes it even better. Dyson focus on the design led marketing. The products are design with bright colours to gain the interest. By the late of 1990s vacuum cleaners became fashion item. (Doole, I & Lowe, R .2010)

High quality: Due to the innovation and the great design the products of Dyson have high quality. So, each product has 3-5 years guarantee which is the longest guarantee in the whole industry. (dyson.com)

James Dyson foundation: James Dyson by that foundation tries to encourage the young people to become design engineers of the future. That foundation makes him more popular and attracts the interest of people to buy his products. (dyson.com)

Employees: One company to be successful must have great employees too. Dyson now has 2.600 engineers and scientists worldwide; some of them are quite experienced and some others are fresh. However, James Dyson gives the opportunities to everybody because he wants people by his side that are creative and thinkers. (dyson.com)

Research & Development: Dyson Company is based on research and development. The company support that is better to invest into R&D rather than advertising because R&D is the way to produce the product with high quality which is matter most. So, without the quality which is the reason to advert? (times100.com)

Weaknesses

High Prices: is one of the serious weaknesses of the company. Dyson due to the high quality, innovative products have quite high prices than the competitors. For example by checking into online stores, the prices for Dyson is from £200 and above against Hoover, Vax which begin with the price of £80 and above. So, that increase the competition because is depend on people how much are willing to pay.

Copy patterns: Hoover copies the idea of Dyson about the bag less vacuum cleaner. As a result Dyson sue the Hoover and fight on the court about the ownership. That, damages a bit the image of the company because the products can easily copy. However, small companies can steal the idea and produce the same product with lower price, but of course the quality is not going to be the same. (Buncombe, A & Arthur, C, 2000)

Washing machine failure: James Dyson after the great success of vacuum cleaners decides to design a new, innovative washing machine. That contrarotator washing machine was not so successful because made a loss instead of profit to the company. Actually, the price of the machine was lower than the production cost and the company could not make money of it. (Gross, P. 2012) (West M, R. 2005)

Opportunities

Global expansion: Dyson is a company that selling its products in over 50 countries; so it becomes a global company. First of all by export globally the profit of Dyson doubled. The company create a good image brand. The expansion also helps to compete more easily with the competitors. (Russell, J. 2010). Moreover, China became the fastest growing market in Asia for vacuum cleaner; Dyson achieved to survive in a highly competitive market and become successful. (Quaoyi, L. 2013)

Meet customers’ needs: Dyson mission is simple, find solution to everyday problem to make the life of people easier. By that customers could trust more the company as a result to become loyal.

Economy of scale: Company by 2000, with an increase of sales of Dual Cyclone vacuum cleaner has grown into the marker domination. Dyson sell to UK 100,000 units per month and become the leader in the market of Europe with 20% of the market. (Jones, T. 2002)

Threats

Competitors with high brand power: Dyson by entering the market it has to face lot of competitors with already high brand image and power. It has to fight hard in order to beat then because customers are difficult to change their loyalty. Some of the biggest competitors are Hoover who’s the name of the product become synonymous with the company. Electrolux, which provide a wide range of vacuum cleaners with different usage. Moreover are, Bosch, Miele, Vax and SEB group.

Cheaper bag less vacuum cleaners: Smallest companies has copy the idea of the bag less vacuum cleaner and sell them in cheaper price. That can attract people because they are going to save money if they buy this one instead of the Dyson. But if Dyson keep the high quality of its products there is anything to afraid. (Jones, T. 2002)

Micro Environment: Porter’s 5 Forces

Threat of new entrance:

Dyson Company in a short term period achieved a high profit in UK and even more in the global market. That is quite remarkable for a company with a lot of competitors with a brand power. Moreover, Dyson has differentiated its products from its competitors by using innovation and industrial design. (Mangham, C. 2006) So, it focuses more for the quality rather than the prices like its competitors. As a result of that, company succeeded in the market. However, low cost suppliers start entering the market but due to the high barriers of entrance, are difficult to beat a company with a brand power. That happens due to the high expenses to build an image in a competitive market; they are newcomer and they do not have the qualified experience for that. Also, the low quality of their products cannot destroy the loyalty of the customers.

Micro Environment: PESTEL

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