Section A
Question 1: Read the case study ‘Dyson’ and
- Critically evaluate the long term sustainability of Dyson’s global competitive advantage in view of the changing situation in the case study.
After saturating the local UK market and achieving a new market share in the US, Dyson vacuum cleaners manufacturer still has to outcompete the mature global market of vacuum cleaners. It has to struggle and overcome many challenges as it aims to take its brand to the next level and to expand into new grounds. This is a critical time for the UK company since it has receded in its market shares in the high end vacuum cleaners segment and it has also withdrawn its innovative and very expensive washing machine from the world markets.
Indeed, it will be a tough climb for Dyson to sustain long term stability in the vacuum cleaner market globally. The vacuum cleaner market is already a mature market and the demand is mainly gathered from replacement purchases at the term of the 8 years product cycle (Parker, 2010, p. 2). In unsaturated markets, there is a low demand for vacuum cleaners since these markets prefer floor tiles as compared to carpets (2010, p. 2). While Dyson differentiates itself with its unique bagless technology, this has been imitated by other brands at cheaper costs. Hence, it is offered to the market at cheaper prices compared to their much higher retail prices. As such, Dyson should come up with a more savvy marketing and other ways to differentiate themselves (Weiss, et. al., 2010, p. 771).
Except for the UK, Dyson has a low market share in most of the developed countries (Hollensen, 2007, p. 3). The top manufacturing countries of vacuum cleaners are the following: China, Germany, Mexico, South Korea, United States, and Malaysia (2007, p. 3). Dyson’s home land shared only 1.46 percent (ranked 11) of the total world’s domestic vacuum cleaners and floor polishers exports in 2006 (Parker, 2005, p. 2). While Chinese consumers are prematurely using vacuum cleaners, the country’s share in the total world exports is 40% (Hollensen, 2007, p. 2). This shows that Dyson has to strongly compete against the cheaper of China, Mexico and Malaysia which also market their vacuum to both mature and new markets globally.
The main question of sustainability will also be determined by their retail prices as the vacuum cleaners consumer shows an increasing demand for lower-priced products (2007, p. 2). There is also a growing environmental trend for the use of recycled plastic and lower energy consumption. Dyson’s competitors such as Groupe SEB already enhanced their products by introducing a noise reduction technology and lighter weights in their products (“Cleaning Upon ASPs,” 2011, p. 36). Another attractive innovation is the introduction of the first robotic vacuum cleaner in the American homes. Dyson is trying to outcompete its competitors, namely, Maytag, Hoover and Electrolux's Eureka, in this respect (2011, p. 37).
In terms of prospective growth, Dyson still has a great opportunity for growth in many high-end markets in Scandinavian countries, Canada, Australia and other global emerging markets. It must focus its marketing spending in penetrating more of its developed high-end markets of Netherlands and Sweden (2011, p. 37). Dyson could leverage its Scandinavian base to establish its new and homogenous markets in Norway, Belgium, Finland and Denmark. Scandinavian area should be the main focus of Dyson for its high-end brands perfectly matched with the country’s high purchasing power and quality-focused consumers. Other focus areas should include the high-end segment markets of Canada, Australia, New Zealand, Hong Kong, Japan and Singapore (2011, p. 37). Thirdly, Dyson should also focus on developing new markets among the high-end markets in other parts of the Asia and Latin America.
- In light of your answer above, advise Dyson on the strategic marketing decisions it should take in order to secure a sustainable global competitive position
Dyson should enhance its marketing strategy from an international market perspective. While a considerable degree of localization is crucial for its sustainability and success, it must adopt a standardized, global positioning being a top technology, premium product, and British-made quality vacuum manufacturer.
Instead of just being a quality UK household brand, Dyson should also establish a clear brand personality just like its global competitors (Buchanan, 2005, p. 19). A brand image around the future, the next technology, the intelligent appliances, and the world-class domestic cleanness must be part of its global promotions. As a quality household product, Dyson must center on its emotional appeal into its advertising strategies (Kumar & Steenkamp, 2013, p. 12). Instead of just emphasizing its quality vacuum cleaners, it should also hinge on the emotional aspects of enjoying technology, lifetime products and the future (2013, p. 12).
Dyson must continue to capitalize on its competitive advantages of high quality and innovative product. Its innovation must focus more on the needs of the customers instead of just providing impressive features (2013, p. 13). Inherently, its global consumers must acknowledge that their vacuum cleaners simply provide good cleaning, among others. However, this must also justify the product’s costs. Dyson must reconsider its retail pricing strategy in order to stay selling for the high end levels. However, it should also offer price ranges which are within a reasonable difference between competitors for its customers to still prefer their brand for its overall quality.
Dyson could use floor tiles through advertisements and by word of mouth marketing approaches. At present, the Chinese and the Indian markets are not high in demand for vacuum cleaners but still, with their continuously expanding economies which are growing 10% annually, their household consumers will be able to afford and appreciate this household gadget. For instance, even when the Japanese market is mainly comprised of floor tiles, their vacuum cleaner sales there prove significant (Hollensen, 2007, p. 2).
Another interesting approach should be in line with its online marketing and sales outlets. It must create a dedicated, local and international website which will be user friendly. Dyson should capitalize on its present strong relationship with global online distributers to attain market success in both the European and global markets. Global online retailers such as e-Bay and Amazon must be Dyson’s main focus in order to create strong relationship with its worldwide buyers. It should also target business segments through housekeeping companies and hospitality businesses (Kumar & Steenkamp, 2013, p. 16).
However, Dyson should preserve its high quality image even when it attempts to reach other market categories. It is right in moving its production plant to Malaysia. It really needs to keep production costs down while maintaining high product quality. In the near future, Dyson will have to invest in its overseas manufacturing facilities. In hindsight, this also carries an implicating risk in product quality control. Meanwhile, in other aspects, Dyson should also try to create a strong partnerships with specialty wholesalers in overseas markets (2007, p. 3). It must also apply a strong quality control in terms of its personnel selection and training. It should maintain a set of experienced managers to expand its offices or operations worldwide.
Section B:
Question 3:
Many international tourist destinations have found it difficult to cope with radical market changes and unexpected environmental and political events in the past few years. Using a specific tourist destination of your choice, write a report to the Destination Tourist Executive which;
- Explains the implications of such events on the development of the global marketing strategy of the destination
According to the Quality Assurance Agency for Higher Education (2012), the UK is one of the most popular countries for educational tourism. It is known among international students and it dominates the number of international students in higher education in terms of its high enrollment percentages. The UK is also a world leader in transnational education. Its educational programs are applied in many areas around the world. To a large extent, the popularity of the UK’s university education is mainly attributed to the quality of its provision (2012, p. 4). The extensive student satisfaction surveys i.e. the National Student Survey (NSS) and the International Student Barometer (ISB) show an impressive rates of satisfaction among international students. In terms of ratio, the most recent surveys reveal that eight (8) out of ten (10) international students are satisfied with their general experience of studying in the UK.
The city of London is a major center for higher education in Europe, including higher education teaching and research (Hipwell, 2007, p. 1). London has 43 universities, which form the largest concentration of higher education in Europe (2007, p. 1). From 2008 to 2009, London had a higher education student population of about 412,000. This is an estimated 17% of the total higher education population in the UK.
According to Wiliams (2010, p. 3), it may be argued that the changes in tourism are allied to the changes in education and there is a convergence in these two industries. Education dramatically enables or facilitates travel mobility and learning has also become an integral part of the modern tourist experience (2010, p. 3). Inbound travelers to the UK for various educational intentions make a significant portion of the country’s economic activity. They are often categorized under “export earnings” (2010, p. 4). These travelers contributed about US$20 billion to the national economy in 2009.
The positive impacts of the UK economy are said to be beneficial to the global marketing strategy of London. These are composed of the following: 1.) generation of foreign currencies, 2.) creation of new job and local employment, 3.) promotion of trade, income and entrepreneurship, particularly in the service and small business sectors, 4.) establishment of new infrastructure which is also available for non-tourism uses, 5.) enhanced regional development, especially in isolated areas, 6.) more tax revenues which redound to greater public spending or reduced taxes on other economic activities, and 7.) the multiplier effect/s to the economy (Amoah & Baum, 1997, p. 4).
Meanwhile, price fluctuations in countries of destination (tourist places) and the host or travel generating countries (those countries where travelers will come from) will either encourage or discourage tourists from travelling. Tourist spending also has a significant economic impact since travelers and tourists spend on an extensive array of local goods and services. This spending injects financial resources into the countries of destination and thus, create new levels of consumer demand (1997, p. 4). Overseas travelers change their foreign currency into the local currency to pay for the tourist products and services. As an outcome, the country of destination accumulates more foreign currency which it can spend on its other economic needs such as creating better educational and medical facilities for the public and/or stimulating general economic development through public spending. In terms of balance of payments, tourism expenditure is classified as equal to export income for host countries (1997, p. 4).
- Advises on the strategic options available for the tourist destination specified
The UK higher education providers must be able to manage all the challenges for international students studying at their institutions. These challenges require them to reassess their teaching and learning strategies in the context of the mass recruitment of international students such that the general learning experiences of the said students can be improved. As it is, the present global environment requires that students be equipped to survive and thrive in a competitive global environment by motivating them to develop as independent, active and lifelong learners.
Primarily, the UK learning institutions should consider the impact of recruiting massive numbers of foreign students who are non-native speakers of English, who have been educated in a national education system that is different from that of the UK system. They also need to consider whether teaching and learning strategies can address the particular needs of these international students. There must be a geenral compatibility between the learning style and the teaching styles used in the UK institutions. They may also intorduce peer study groups and mentors or tutors. These teaching aides can help evaluate the appropriateness of strategies most effective for these international students. It may also be useful for them to sustain activities for these students to break into their much needed social adjustmenta. They must emphasize the importance of social networks for these students. Peer-assisted learning can be used more frequently and it can prove to be an effective student support mechanism. Students gain a more structured means of communicating with international and UK students who have already progressed on their course.
It is also important for the UK to develop international students who will make significant contributions to their national economy. Their strategies also focus on expanding educational opportunities for overseas students in emerging economies to help develop a middle class in those markets. The said middle class will, in time, be able to purchase their own goods and services and thus help boost their economies in the long run. While this is not directly implied in the UK educational tourism, it is most likely that the following considerations are already realized by its expansive international students market. The UK must also use recruitment agents in targeting and recruitment overseas students. International students all over the world are also increasingly relying on agents to help them find a suitable place to puruse their further studies abroad.
- Analyses how they might make the strategic marketing decisions on which type of strategy to pursue
As mentioned above, the country should utilize recruitment agents in targeting and recruitment overseas students. International students all over the world are also increasingly relying on agents to help them find a suitable place to puruse their further studies abroad. In the UK, the British Council does not accredit or formally recognize any agents. However, it provides various services to assist agents working with UK institutions, to increase the quality of an agent’s work. These services include an online course for agents working for the British Council, a guide to good practice for agents, designed by the British Council, Education UK Websites and publications that give agents access to information on local news in their local language, opportunities for agents to participate in Education UK networking events, and informational visits of agents to the UK.
In this regard, the human resource development component of the tourism stakeholders must be emphasized. The UK public sector has different roles to play in the coordination, planning, legislation and regulation, and financing of tourism and all of these initiatives will redound to the economic, political and social well-being of the nation as a whole. However, the public sector must also take a major step forward towards applying decision making within the framework of the adopted policy. This step will be more collectively advantageous.
As reiterated, the collaboration the public and private sectors is required under tourism policy formulation. If properly done, this will give rise to high quality of the tourism product or enhanced environment and way of life for the host community. As suggested by the VisitBritain council, the UK tourism industry must be more equipped to provide the right kinds of facilities and services for international tourists. This, in turn, will make it possible for the UK to maintain or improve its country ranking as an attractive destination for international travelers. The industry must also strive hard to be more productive and competitive to avoid being relegated as a high-end, high cost niche player in the international tourist market.
References:
Amoah, V. & Baum, T., 1997. Tourism Education: Policy Versus Practice. International Journal of Contemporary Hospitality Management, 9 (1), p. 5–12.
Buchanan, L., 2005. From House to Home. Infurniture, 6(1), p. 18-20.
Cleaning Upon ASPs, 2011. Tech Trader, 3(4), p. 36-40.
Hipwell, Deirdre, September 23, 2007. "The Sunday Times Good University Guide 2007 – Profile for London School of Economics." The Times (London).
Hollensen, S., 2007. Dyson Vacuum Cleaner: Shifting from domestic to international marketing with the famous bagless vacuum cleaner. Prentice Hall.
Kumar, N. & Steenkamp, J., 2013. Brand Breakout: How Emerging Market Brands Will Go Global. London: Palgrave McMillan.
Parker, P. M., 2005. Global Trade Perspective - Electromechanical Domestic Vacuum Cleaners & Floor Polishers with Self-Contained Electric Motors. Global Trade Perspective 2005 - Electromechanical Domestic Vacuum Cleaners & Floor Polishers With Self-Contained Electric Motors, 1.
Parker, P. M., 2010. The 2009 Report on Vacuum Cleaners: World Market Segmentation by City. City Segmentation Reports, N.PAG.
Quality Assurance Agency for Higher Education, Janaury 2012. International students studying in the UK - Guidance for UK higher education providers. Available through: https://docs.google.com/viewer?a=v&q=cache:SM0L9vBCSOcJ:www.qaa.ac.uk/Publications/InformationAndGuidance/Documents/International-students.pdf+why+international+students+go+to+UK+to+study?&hl=en&gl=ph&pid=bl&srcid=ADGEESgGsjPmCW-xhkToiLHQlKM42Y8k1BF8487qKfHNiFysecmZwt9HxtbrWW7R1JiktxhZwYJaAaB01nucRRwGiB5yE8rzOHMvTPzmBLMSBkSvBiNJWg1BMTJsnxdjwml_AsXDusWL&sig=AHIEtbSlL6cEeDgEEHfiHjYwerfnQdknaw. [Accessed on 07 August 2013].
Weiss, M., Patel, M. K., Junginger, M., & Blok, K., 2010. Analyzing price and efficiency dynamics of large appliances with the experience curve approach. Energy Policy, 38(2), 770-783. doi:10.1016/j.enpol.2009.10.022.
Williams, P., 2010. Educational Tourism: Understanding the Concept, Recognizing the Value. Tourism Insights Website. Available through: http://www.insights.org.uk/articleitem.aspx?title=Educational%20Tourism:%20Understanding%20the%20Concept,%20Recognising%20the%20Value#summary. [Accessed on 07 August 2013].
