Case Study of Dyson: Competitive Advantage through Innovation

Dyson, an electrical manufacturer, is solely owned by Sir James Dyson, and its headquarters are based in Malmsbury, Wiltshire. Dyson was the first company to introduce a bagless solution to conventional vacuum cleaners. After securing a significant market share in the vacuum cleaner industry, the company decided to diversify in to new products and countries. Dyson’s vision is to make products more environmentally friendly and easy to use; his ongoing mission is to promote design and innovation through the production of his products. Today Dyson has a presence in 45 countries and still maintain a 46 % and 32% share in the UK and US Vacuum cleaner market, respectively.

Case Study of Dyson: Competitive Advantage through Innovation

Dyson has strong brand recognition, as the qualities projected by James Dyson become associated with the product itself. The product is instantly identifiable by the brand name, because of the innovative design portrayed. Even though Dyson is a leading vacuum cleaner brand, it is still losing out to cheaper machines that have developed their own bag-less technology. The innovative strategy Dyson employs is word of mouth and the company today claims 70 percent of its vacuum cleaners are sold on customer recommendation.

Dyson believes the marketing must be just as innovative as the product, so he likes to have his face associated with the product. The intelligent innovator communicates with opinion leaders for their opinions on the products, and publicizing them to the public. Another innovative strategy implemented by Dyson is related to the product brochures, as these tell a story of a heroic battle in becoming the market leader. Each brochure gives emphasis on education and information of the product rather than brand building. These strategies enabled Dyson to offer products that surpass existing market expectations and offer superior design and performance.

Dyson’s first bagless vacuum cleaner was launched in 1993. It overcame the problems with conventional vacuum cleaners (e.g. losing suction and bag replacement), through the use of Dual Cyclone technology. The inspiration came from analyzing a local sawmill and how it spun sawdust out of the air and collected it in a chamber. This gave James his initial vision of using this technology on a much smaller scale. In 2001 Dyson improved the Dual Cyclone with the Root cyclone; it used a number of small-diameter cyclones to provide better suction. The Root Cyclone is 45% more powerful than its predecessor providing better dust and dirt pickup as well as constant suction. The cleaner becoming the best- selling Dyson product.

Dyson launched the Air Multiplier in 2009. Time Magazine (2009) voted the fan third in the “Top 10 everything of 2009”. The Dyson Air Multiplier is a blade-less fan which is 15 times more efficient than a conventional fan. The air being pushed out over an airfoil-shaped ramp, which is similar in shape to the wing of an aeroplane. In doing so, surrounding air is drawn into the air flow, so by the time the cool air hits your face, it is the equivalent of 15 units.

Simply put, innovation is the process of transforming opportunities in to new ideas and of putting these ideas into common practice. Dyson shows how innovation and different ways of creating and adding value through design can distinctly change an industry. Innovation enabled Dyson, a newcomer in the domestic appliances industry to become a market leader and force a reaction from established manufacturers in that market.

Dyson is one of the most important resources in his company, his innovative spirit and ability to defend market share demonstrates how he has gained a position as the market leader in innovative products and thrives to maintain it. Firms need to innovate, not just once, but repeatedly, to keep their competitive edge.

Dyson has struggled to get where it is today by competing with established electrical manufacturers. Hoover, Dyson’s main competitor, had infringed Dyson’s patent for its bag-less technology. Hoover was ordered to pay Dyson £6 million in damages and £2 million in costs. In the space of 18 months Dyson became the US market leader with a product that was double the price of Hoover, who had conquered the US market for 98 years.

Hoovers fall in market share could be due to the fact that their bag-less vacuum sales were stopped, enabling Dyson to increase their market share from 2002 with Hoover visualizing a decrease. This increase could also be influenced by their innovative strategy. Dyson had found a gap in the market for a new and innovative product that maintained its air flow and never lost suction.

James Dyson came across many failures while innovating and these have sometimes proven to create new product ideas, he also believes that failure is the starting point for success because it’s important to understand why the failure occurred only then will the solution for overcoming that failure arise. It took Dyson four years, several patents and over 5000 prototypes to produce the world’s first bag-less vacuum cleaner.

An example of a failure in innovation is Dyson’s Contrarotator washing machine, it replaces a conventional single drum with two drums that rotate in opposite directions to imitate a “hand washing” action. Dyson was competing against established brands such as Bosch, Electrolux and Hoover. The Contrarotator was discontinued in 2005, due to high production costs. The company lost £90 Million on the washing machine.

In order for Dyson to sustain its competitive advantage it must also develop a competitive strategy which is more innovative from its competitors, this involves Dyson increasing the strength of its brand.

Continuous innovation is important to maintain the life of the Dyson’s products, and the strength of the brand. The company implements a simple but effective way of achieving brand recognition and enabling promotion in a new and unique way. However Dyson’s strategy is risky as they have always been first in exploiting untried solutions, the success of its products is unknown until it has entered the marketplace. The idea of technology transfer is unique to James Dyson as he has shown his ability to use these in different ways.

In conclusion to the above stated it is also important to consider challenges to Dyson and how this could affect their position as the market leader e.g. protection of intellectual property. In order for Dyson to maintain its position as a market leader in innovative products it needs to look to the future and see how technologies developed can be used to enter other markets. Continuous innovation is the key to the company achieving this in today’s competitive industry; failure can also be used to achieve this vision.

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