Abstract
This paper analyses Corporate Strategy approaches employed by Dyson-a home appliances manufacturing company based in the United Kingdom. It presents an analysis of the advantages and disadvantages that in turn influence its competitiveness in the home appliances manufacturing industry on a global scale. Subsequently, the discussion analyses the position of Dyson in comparison to competitors in the market. An evaluation of PESTEL and Potter’s Five Forces is presented with regard to the strengths, weaknesses, opportunities and threats that Dyson faces given the current economic setting in the world. Later, the discussion presents suggestions for strategy implementation that can be explored by Dyson coupled by possible approaches that can be used to effectively achieve the implementation of these strategies.
James Dyson is the founder of Dyson Company, which is based in the UK with several branches operational in selected parts of the world. The United States and the UK form its greatest share of the global home appliance market. The company has a longstanding reputation of commitment to technological innovation. This culture was engraved by its founder James Dyson, who made over 5000 prototypes of his first vacuum cleaner before making the one he considered, worked well. The company, today, employs over 4000 people worldwide in over fifty countries in different regions of the world (Dyson, 2014).
Close analysis of the environment in which Dyson operates is such that it is characterized by stiff competition based on the nature of the vacuum cleaner business. Its` initial strategy that involved the firm ensuring that it sets itself apart through differentiation is quickly losing grip since imitations of its bag-less vacuum cleaning technology have already flocked the market at cheaper prices. Essentially, Dyson must react to this competition by investing in newer ways of differentiation. In this regard, the management at Dyson should not relent in its efforts to support innovation in engineering especially in research on improving the quality and performance of Dyson products (Dyson, 2004, p. 631).
At the onset, the development of the first prototype of the Dyson vacuum cleaner the DCO1 was a threat to the vacuum cleaner markets in the UK and in the US owing to the fact that no company would license the DC01 for production. The main reason behind their lack of commitment was that the DC01 was a bag-less vacuum cleaner. At the time, the vacuum bag market was worth at least $ 500m USD making the Dyson a great threat to the profits earned in the vacuuming industry. However, Dyson found favor in Japanese Company Apex in 1986 that licensed the production of the Dyson design in the G-Force. It performed well in the Japanese market since it was feted with the Design Fair prize in Japan in 1991. This success of the company in Japan steered success in its growth into the American market and the UK market and later into other parts of the world. The DC01 launched in the UK with a transparent container that had the design team skeptical of its success in the market. However, it become a major selling point for the Dyson. In just a year and a half the DC01 had become the best-selling vacuum cleaner in the entire United Kingdom and a prototype for imitators (Dyson, 2008).
Dyson is best known for its vacuum cleaning product despite the fact that it is engaged in developing other household products mainly heaters, hand driers and fans. An analysis of the global vacuum cleaner market reveals that demand is mainly driven by replacement purchases at the end of a cycle of the life of the Dyson cleaner which mainly lasts up to eight years. In other markets, the Dyson vacuum cleaner receives little sales due to the fact that tiled floors are preferred which do not hold dust as carpeted floors do. All in all, Dyson should grab the opportunity presented by its leadership in vacuum sales to enhance word of mouth strategies driven by satisfied customers in regions of sales to improve on them. More importantly, Dyson must continue its commitment in innovation as a discipline of creativity that helps in developing products in anticipation of future dynamics in regard to the needs of the market (Torun & Cicekci, 2007, p. 8).
Another challenging element that Dyson is faced with is the viability of the markets in which its products are sold. Essentially, the market conditions in the United States and in the United Kingdom are such that the sales are driven by replacement purchases as earlier mentioned. Hence, the bargaining power of customers in these two markets is limited due to the unreliability of demand in these markets. However, traversing into the Indian market and the Chinese market, Dyson may yet find a growing market for its products. This is because these two markets are emerging economies with a flourishing middle class. What this means is that with the development of these economies Dyson may yet find a new and ready market for its vacuum cleaner and other home appliances in each one of these emerging markets (Dyson, 2004, p. 634).
Similarly, a closer look into the political, legal, economic, social, technological and environmental analysis reveals that most are in order. In this regard analysis of the company’s political set, up is one that is stable given that the company is and branded by the reputation of its founder James Dyson. Moreover, the political structure in terms of leadership of the company is not in dispute. Therefore, this political stability within the company is essential to its operations around the world especially in the coordination of decisions made and in delegation (Dyson, 2008).
On the other hand, the greatest legislative huddle that the company has faced so far was in the difficulties that it faced in the initial stages of its formation that mainly encompassed problems in the registration of the company or its licensing to operate. However, the form has since overcome this challenge and grown to penetrate into various financial markets of the world growing into the world’s leading supplier of vacuum cleaners alongside other household appliances. For this reasons, the company stands a better chance in the future in regard to legislation on its operations (Dyson , 2014).
Principally, the analysis of the operations of the company shows that historically it has triumphed to overcome its weaknesses through a strategy based on innovation. Further, the company has successfully penetrated the home appliances market to become a leading supplier in sales of vacuum cleaners in the world. Its strong brand is based on its strategy that emphasizes on innovation that makes customers associate Dyson products with the latest technology in the market. For this reason, the analysis reveals that Dyson would lose if it were to change its innovation focused strategy as this is the only element that differentiate from its imitators. Further, the charisma of its founder James Dyson also imparts various elements of product branding and placement which give Dyson products an edge over the competition. The discussion has delved into the Potter’s five forces of and PESTEL analysis at Dyson, that reveals several advantages and disadvantages that the company is faced with. The subsequent section discusses option that Dyson can explore as a strategy for success in the home appliance manufacturing industry.
Strategy Options for Dyson
The major factors that pause threat to Dyson’s products in the home appliance manufacturing industry are competition and lower pricing of competitors products. However, the company enjoys control of the market due to its unique differentiation based on its commitment to technological innovation. The subsequent paragraphs provide details of possible approaches that Dyson Company can develop a corporate strategy to assure that it maintains its lead in the home appliances manufacturing industry.
Foremost, Dyson’s management should consider exercising more of customer focused growth strategies. For instance, its strategy to enter into the emerging economic markets where there is a promise of continued growth and development of a vibrant middle class presents an opportunity for the expansion of the company in the Indian and Chinese markets. Majorly, sales from these markets would offset the slowing sales in the American and British markets since purchases in these markets are solely driven by replacement intentions. More importantly, the management of Dyson should employ strategies such as market segmentation that majorly involves differentiating markets and their specific needs. This would give the company a customer focused approach. In addition, it would serve to ensure that the company does not waste resources on marketing products that are not tailored to the requirements of the market (Liabotis, 2007).
Secondly, the political structure of the organization serves to suit it indecision making. Essentially, the organization is at an advantage since the decision making process is smooth and hence will be quick to achieve. The business can explore multidimensional management modules where the central management delegates some managerial duties in decision making to regional managers across the areas of the firms’ operation. In this regard, the management of Dyson ensures that the governance of the organization’s units are customized to the specific needs of individual market segments. This proves effective in the responsible utilization of resources such as is in product promotion and in product research and development (Driouchi & Bennett, 2012, p. 39)
Thirdly, Dyson should consider revising its stand on pricing of its home appliance products. The pricing of the appliances produced by Dyson Company to a large extent have been branded as premium pricing; whereas premium pricing works to the advantage of the company since the organizations products are associated with some form of aesthetic value, it is increasingly becoming a challenge especially in the light of cheaper imitations. The company has to make a decision to drop its stand on premium pricing and focus more on the production of products that are affordable. However, this does not imply that the entity compromises on the quality of the products that it produces. Rather, it suggests that the firm makes strategic investments in research and product development that is focused on reduced prices of Dyson home appliances without compromising the quality of the products (Liabotis, 2007).
Finally, Dyson should consider employing customer service options as a means to set itself apart from competitors and have an edge over the competition. For instance, the company can offer shipping services to regions where its offices are not set up. Similarly, it can set up service shops in regions where it enjoys the presence to encourage consumers to approach technicians in the shops in case their appliances present them with technical difficulties. Likewise, the company can give warranties of longer period’s durations such as five years and a surety of free or subsidized repair charges in the case of any breakdowns of the machine in the period within which the warranty is valid. In the end these customer focused approaches would in effect ensure that the company can attract adequate customers to sustain the sales of its home appliances across the globe (Liabotis, 2007).
The successful implementation of these four approaches would place the company Dyson in a competitive position, in the home appliance manufacturing market. What is more, the company stands to gain tremendously from differentiation that is developed in customer services as well as customer focused approaches discussed herein. These differentiations would serve to complement its long-standing differentiation based on technological advancements in the industry. Further, the company may consider ways of making quality products that are affordable to a wider scope of the emerging middle class category of customers in emerging markets such as China, India, and South Korea, etc.
Approaches to Strategy Implementation
The company has the option of exploring various avenues of implementing the strategies discussed in the preceding section. Ideas advanced by Mintzberg suggest that the management requires carrying out a SWOT analysis of the business and making appropriate decisions in regard to strategy formulation and implementation. The traditional way of achieving this if formulation first then implementation, however, of late there has been a switch where managers allocated resources to certain missions, goals and objectives which are later incorporated into the formulation of a strategy after goals have already been implemented. This new approach of implementing strategy before formulation is referred to as emergent strategies (Barnat, 2005).
The management of Dyson should be cognizant of the available options in the implementation and formulation of strategies as presented in the previous paragraph. It should weigh the advantages of implantation before formulation visa-vis formulation of strategy before implementation. Whereas the former makes use time by ensuring that resources are not idle in the absence of strategy formulation; the later presents the management with a clear plan that can be useful in accountability concerns. The initial step in strategy implementation involves identifying activities, decision, and relationships that are critical to accomplishing activities. In this regard, the management at Dyson should place into consideration the product development process and the relationship between itself and employees, customers, investors and business partners when making decisions on strategy formulation and implementation options (Barnat, 2005).
Similar sentiments furthered by Bhatti (2011, p. 52) support the notion that the greatest huddle that managers face in effective planning of strategy is on the implementation. As Bhatti explains, execution of strategy is more often than not problematic due to unanticipated challenges that may arrive in the implementation process. As a result, mangers especially those at Dyson must consider reverse approach of testing goals first before developing a definite strategy formulation.
In the same respect, the management at Dyson must take note of the difficulties in corporate strategy planning that more often than not accompanied by formulation of adequate strategies that are poorly implemented. Poor implementation is often the reason behind the failure of most well-articulated strategies. As a consequence, the management of Dyson should reevaluate the successes it has achieved in the past in comparisons to the areas where it failed. Then, the management can identify loopholes in the implementation process that led to failures in certain strategic goals. More importantly, the management must make use of the lessons learnt in tailoring a way forward in the implementation of the strategies discussed in the immediate previous section (Li et al., 2008, pp. 3-4).
Principally, the prerogative of the management at Dyson is to place emphasis and pressure in the development of a strategy that would serve to enhance its position and grow its share of control in the home appliances manufacturing market. In essence, the general approach to the realization of success through the suggested strategies is benched on the successful implementation of these strategies as presented (Chen et al., 2008, p. 121).
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