The Hoover Company and Dyson
Table of Contents Question 12 Dyson’s Value Chain Model2 Competency framework model3 DISCUSSION AND ANALYSIS4 Question 25 VRIO FRAMWORK5 DISCUSSION AND ANALYSIS6 Question 36 Question 47 References:8 Question 1 Using framework from the chapter, analyse the strategic capabilities of Dyson. Dyson’s Value Chain Model Support Activities FirmInfrastructure| Structuring and planning, HQ in UK, manufacturing and testing facility in Malaysia with 120 testing station, patent protection, management, corporate commitment to product development supported by company motto: thinking, testing, breaking, questioning. 50 engineers in Wilshire with 20 specialist laboratories close by. | INFORMATION FLOW Human ResourceManagement| Up-to-date employee details, training, reward scheme, 2500 people working for Dyson around the world, recruitment follows an online process, the right candidate will be called for an interview, recruitment strategy focuses on recruitment of engineers and designers| TechnologyDevelopment| Margin Helps in R&D, which is the key operation, ERD and IRM to manage the information flow within the company, a wide selection of technology involve in production process and technological innovation.
Dyson’s technology: multiplier technology and ball technology. | Procurement| Raw materials procure from the UK and Asia. Majority of procurement come from Asia where suppliers are based and cost are low. The material is shipped to Dyson’s manufacturing plant in Malaysia. Malaysia is on of the leading procurement centres in the world. | Primary Activities Inbound logistics| Connected with suppliers, so that they can meet the needs, raw materials, energy, inventory management, reverse logistics process as defective product can be returned to Dyson company at the cost to the customer.
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The product will be return within 24h to the customer. | Operations| Avoiding unwanted operations and thus enhance the flexibility, manufacturing the products in Malaysia and China, the NQ in the UK, developing and testing the prototypes, sending the prototype through production process. The manufacturing process that converts raw materials into various products. The operation phase is preceded by the development of a prototype. Various forms of technology is used to develop a prototype from special computerized technology to plasticine and cardboard. Outbound logistics| Fast and direct link to distributors all over the world, Dyson’s sell his products directly from their website and retail stores like comet or curry’s. Activities of outbound logistics are customer’s orders which are shipped to different locations around the world. | Research &Development| 50% of the company profit is spend on R&D, 350 engeeners, R&D in the UK, design, technological innovation and creativity. Marketing & Sales| Electronic market research, advertising, Dyson award for young inventors, online ordering process, online marking, strategy where the customer can shop online with the assistance of customer service agents. The online order makes easy for the customer to choose product, models and performance. | Service| Effective after sales services to the client at cost to the client, 7 days a week customer help line and online customer service, 5 years warranty for Dyson’s products. | INFORMATION FLOW Competency framework model ———————————————— Dyson: threshold resources ————————————————- •Engineering design equipment (tangible) ————————————————- •Product supplies (tangible) ————————————————- •Manufacturing space (tangible) ————————————————- •Offices and facilities (tangible) ————————————————- •appropriate personnel (tangible) ————————————————- sufficient customers (human resource) ————————————————- ————————————————- Dyson: threshold competences ————————————————- •general management skills including distribution & marketing (intangible) ————————————————- •Engineering design skills (intangible) ————————————————- •Cost control through manufacturing in low-cost locations; Malaysia and China (tangible) ————————————————- Quality assurance and control, 550 tests before the product will reach production line (tangible) ————————————————- •The ability to attract customers sufficiently inspired by design to pay premium prices across (intangible), ————————————————- ————————————————- Dyson: distinctive resources ————————————————- •James Dyson himself (human resource) ————————————————- The Dyson brand name and strategy of high-end products in an otherwise dull market (intangible source) ————————————————- •An HQ building and related laboratories designed to foster innovation (tangible resource) ————————————————- •Product portfolio and associated patents (intangible) ————————————————- •High R&D budget (tangible) ————————————————- •Company invests extensively in PR & advertising (intangible) ————————————————- Ownership of the manufacturing facilities and hence control over the working conditions of the employees versus other companies that contract out their manufacturing and can be accused of supporting poor labour conditions different markets (tangible) ————————————————- • 350 engineers involve in R&D (tangible) ————————————————- • Manufacturing plants in Malaysia and Singapore (tangible) ————————————————- • 120 testing stations (tangible) ————————————————- • Physical products.
Space cube kitchen, vacuums, washing machine and air knives (tangible) ————————————————- • Corporate culture, Dyson encourage their workers to think outside the box, the company mix experience engineers with freshly qualified to give them the chance to make a difference, entrepreneurial culture with a huge emphasis on innovation, creativity and initiative (intangible) ————————————————- • Human resources: Dyson is committed to hiring people who are creative and courageous, unconditioned fresh-thinkers (tangible) ————————————————- Finance resources ————————————————- ————————————————- Dyson: distinctive competences ————————————————- •Inspirational leadership around the value of engineering (intangible) ————————————————- •Design engineering skills that transform ideas into practicable products (intangible) ————————————————- •Competence to make engineering aesthetically attractive (intangible) ————————————————- Seamless value chain despite design and manufacturing being in different locations (intangible) ————————————————- •Being one step ahead of competitors attracting customers and subsequent followers including premium pricing (intangible) ————————————————- • Attractiveness of their product, never being boring; always being surprising and colourful (tangible) ————————————————- • Marketing expertise (tangible) ————————————————- Manufacturing process, product design: combination of design engineering and manufacturing (tangible) ————————————————- • 50% of the profit goes on R&D (intangible) ————————————————- DISCUSSION AND ANALYSIS All the key activities in Dyson value chain are intertwined due to very innovative approach to products. Dyson’s decision of moving manufacturing to Malaysia and Singapore was based on reduce cost of production but the profit was not the only reason. Very important was the short distance from the Asian suppliers and primary consumer market.
Dyson’s shows very unorthodox approach towards by allocating 50% of their profit into R&D. It proves that it was the right decision by showing three new products; newer root cyclone technology, air-blade hand dryer and bladeless fans. (Arnott, 2010) While leaving its HQ in the UK to be close to centre of innovative technology and development. Their HQ is the centre of developing, testing and prototyping which employees 350 engineers. We cannot forget about inspirational leadership pertaining to the value of engineering and design engineering skills.
Dyson’s employment strategy focuses on the recruitment of engineers and designers more than any other group of people. The HR philosophy in Dyson is ‘‘to nurture talent and challenge people to get the best from them’’. Recruited staffs typically follow a linear progression in moving up the ladder of their career. The Dyson website reports that there are 10 different types of benefits, staffs are entitled to. There are 2500 people working for Dyson around the world with a growing demand to recruit more engineers at the Wiltshire head office.
Recruitment follows an online process and successful candidates are called for interviews where the best are selected. Dyson’s shows vibrant, entrepreneurial culture with a huge emphasis on innovation, creativity and initiative. Dyson don’t strap people into suit and plonk them behind desks. The staffs are encouraged to develop new ideas outside of the traditional boundaries. Question 2 To what extent do you think any of the capabilities can be imitated by competitors? VRIO FRAMWORK | Valuable? | Rare? | Costly to Imitate? | Exploitable by the Organisation? | Competitive Implications? | | NO| —| —| NO| Competitive Disadvantage| YES| NO| —| | Competitive Parity| | YES| YES| NO| | Temporary competitive advantage | | YES| YES| YES| YES| Sustained competitive advantage| 1. Inspirational leadership | YES| YES| YES| YES| Sustained competitive advantage| 2. J. Dyson| YES| YES| YES| YES| Sustained competitive advantage| 3. R&D expertise| YES| YES| YES| YES| Sustained competitive advantage| 4. Physical products| YES| YES| YES| YES| Sustained competitive advantage| 5. Manufacturing plants | YES| YES| YES| YES| Sustained competitive advantage| 6. Design engineering skills | YES| YES| YES| YES| Sustained competitive advantage| 7.
The brand name| YES| YES| YES| YES| Sustained competitive advantage| 8. Corporate culture| YES| YES| YES| YES| Sustained competitive advantage| DISCUSSION AND ANALYSIS In my opinion any capabilities can be imitated by competitors with exception of patents which are protected for the limited time period. Competition itself it doesn’t have to be the direct threat but in today’s world allow us close observation resulting in many cases in reverse engineering provoking technology improvements and finding more sufficient solutions. There in not such a thing as a well protected company. Dyson lost case in English Court with TTI) Market share among competitors does not relay on available technology only. There so many different factors like cost efficiency, marketing, advertising, location and so on and those factors are usually used for market domination in the same product range. Every competitive company could be categorizing by distinctive capabilities. Distinctive capabilities are giving the particulars companies a distinctive edge directly related to market demands e. g. Electrolux – saving products, Dyson –eco-friendly or innovative appearance and Miele – reliability. Question 3
Which of Dyson’s distinctive capabilities may, over time, become threshold capabilities? Distinctive resources and competencies and its diversification rely on certain niche market. Not every consumer is preparing to pay a premium price for the product representing outstanding innovative look and design. Many of us are not prepare to do so because reliability and traditional brand name are the factors instigating our choices. Different companies relay on different strategy to maintain its market position and this is usually based on traditionally recognise distinctive competences, resources and capabilities.
There are some companies with well establish markets names which are used by generation of consumers e. g. Electrolux or Miele. In the age of new technologies distinctiveness of the product will loose its grounds towards unification, which proves the point that distinctive resources, competences and capabilities will loose its outstanding values over unification. Dyson is based on innovated look targeting high end product users constantly reinvesting its profit towards new concepts and this idea is very alien for more conservative approach to well establish group of consumers.
In my opinion you do try to repair something which is not broken. If the company will consequently follow the idea of JD towards mixing arts and engineering and investment of the huge portion of profit in R&D they will maintain its position in the market leadership. All of the sudden well established companies who dominated market for generations got over come by relatively speaking new comer Dyson Ltd. In order to reverse the situation there are force to rethink own market approach and adapt new ideas e. g. allocation funds for R&D, creativity in product appearance and implementation of new design and technologies.
Question 4 Bearing in mind your answers to question 1 and 2, how crucial is Sir James Dyson to the future of the company? What might be the effect of his completely leaving or selling the company? In my opinion JD left the impact not own in his only company but also changed the approach of consumers market towards unusually innovative products. Instead of using straight path and follow existing concepts he is famous for introducing futuristic ideas. This is not easy to implement radically different products although he is doing this with the full determination.
Relationship between unconventional design and markets needs is known not always in tune. In his concept thinking, testing, breaking, questioning will always find a group of devoted followers. From practical point of view his smart ideas of protecting his product by patents law secure the company position against the catching up competitors. He showed that simple household products could have very artsy design for which he could charge the premium price. His innovative approach includes unprecedented allocation of 50% of the profit towards R&D. By doing this Dyson is securing strong and save position of his company.
Every strategic decision to resign his CEO position allows him to still have very strong impact on a product outcome by holding the key decision to innovated design. If he ever decides to leave or sell the company his legacy won’t be forgotten. This company maintain its leading status would probably prolong his vision in order to stay ahead of competition. If Dyson decides to sell the company and the new owner doesn’t follow his idea the company will become one of many without distinction. References: Arnott, S. , 2010. Dyson Profit Double Thanks to R&D Investment.
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