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Strategic Analysis M34BSS

Presentation of Strategic Analysis M34BSS on Friday 12 July 2013 at 9.30 AM
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Peerapol Chongchirasiri

on 15 July 2013

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Transcript of Strategic Analysis M34BSS

Strategic Analysis
Dyson's Products
Sir James Dyson

"The look of the product, the intangible style that sets one thing apart from another, is still closest to my heart.”

Members in Group 2
Raj Chand
Manal Al Bulushi
Eze Augustine
Peerapol Chongchirasiri
Ezaldeen Alsalman
Student ID: 1173086
Student ID: 4135762
Student ID: 4652292
Student ID: 4755582
Student ID: 4838047
Vision

“To provide and maintain an integrated, cost-effective and sustainable product responsive to the needs of users, supporting growth of its consumer product”.
Mission
“To sell the world wide best vacuum cleaners with high quality and good pricing. Evolving technology and a good product”.
Macro Analysis
PESTLE Analysis
Political
In many countries, fund raising and getting a loan is very difficult due to high interest rates, especially for researchers.
Economic
• A general decrease in disposable income, ( increase tax , VAT)

• The market scenario did not provide a favorable condition for the industry to expand its business, especially in consumer products. Due to fluctuating demand, the vacuum cleaner factory in Wiltshire was shut down, resulting in the loss of 590 jobs.
Dyson was moving the upright vacuum cleaner manufacturing to the Far East where labour costs are much cheaper.

In 2007 Dyson formed a partnership with the Malaysian electronic manufacturer industry (VSI) to take on a major role in Dyson's supply chain, from raw material sourcing and production to distribution.
Social
Smaller households are on the rise, hence new demand is generating as each household needs a vacuum cleaner.
Changing markets in the business environment make it very difficult for an organization like Dyson to keep track of people's taste, which can prove to be a menace for the organization. However, Dyson has always kept itself up to date in terms of technology.
Technological
Most of the Dyson products are not so sophisticated and comparatively easy to copy due to technological advancement. Dyson has always been able to keep a head of the competition with innovation and new technologies. Although Dyson is still the leading vacuum cleaner brand in the UK, it’s beginning to lose out to cheaper machines that have copied its bag-less technology

The latest of which is the “Telescope” vacuum cleaner, which can be compressed for storage

Production has become more automated and standardized
Environmental
Environmental awareness has increased.

Need for energy efficient and effective vacuum cleaner.

Home building switching to wooden floor or tiles particularly in tropical Regions
Porter's 5 Forces
Threat of New Entrants
Moderately High
(4)
Lower cost suppliers entering the market
Bargaining Powers Buyers
High
(4.5)
Buyers can purchase from many outlets at competitive prices
Low
(2)
Designs are patented and protected. Whilst there are other similar designs , non are as advances as Dyson
Low
(1.5)
Limited suppliers of the technology
Competitive
Rivalry
High
(4)
Industry Life Cycle
1993
1998
2003
2005
2012
Sales
Development
Growth
Shakeout
Maturity
Strategic Group Analysis (Global Turnover)
Product Range
Broad
Narrow
Narrow
Geographic Scope
Global
Value Chain of Dyson
Capabilities of Dyson

Resources of Dyson:

Engineering design, as they spend time to develop the household products

Product supplies.

Massive Manufacturing.

Facilities and Logistics.

Qualified staff.

Sufficient consumers.
Capabilities of Dyson
Competences of Dyson:

High Strategic Management reflecting the distribution & marketing.

Unique design: Engineering spends plenty of time to develop new products.

Manufacturing in Asian countries (e.g. China) to deliver a cheap & competitive price.

Quality assurance and control.

Customers are able to afford Dyson’s high prices depending on its high quality.
Capabilities of Dyson
The importance of James Dyson for the company:

James Dyson himself is a prominent public figure and the best spokesperson in commercials Dyson Company could have.

The innovative designs of its product had enabled it to command a premium price in a market.
SWOT Analysis
Risk Management
Porter's Generic Strategy
Bowman's Strategy Clock
Ansoff Matrix
High promotional expenditure. The biggest investor in advertising – has maintained its annual advertisement spend at over £4 million (accounting for 58% of total spend in 2009).
High R&D involvement
Easy maneuvering and high suction power of vacuum cleaners.
High quality
Brand figure (James Dyson)
High Patent on innovations
All Dyson uprights and cylinders come with a free five-year guarantee.
Strengths
High product price
Importation cost
Weaknesses
SWOT Analysis
Opportunities
Around 80% of the company’s machines are sold outside the UK.
Shift in Demography.
International penetration
Threats
Cheaper product price from competitors (such as Dirty Devil and Samsung)
Own label ranges and manufactures who offer Cyclonic cleaners eats into Dyson market share.
Effect of global downturn
Easy to imitate
Brand Figure (James Dyson)
Technical
Product development costs (Half of all profit channeled into new ideas)
Breaking into a new market (Bladeless fans, cubed kitchens)

Psychological
Breach of company secrets (Thumb prints and sound absorbing panels)
Underestimating costs and overestimating benefits (washing machine)
Reluctance to try innovative products (reliability)

Political
Patenting constraints (regulations)
Time scales (delays and risk of others getting in first)
Deception

Cost Leadership
Differentiation
Cost Focus
Differentiation Focus
1
2
3
4
5
6
7
8
Differentiation
Focus Differentiation
Risky,
High Margins
Monopoly Pricing
Loss of Market Share
Low Price/
Low Added Value
Low Price
Hybrid
Price
Low
High
Perceive Value to Consumer
Low
High
A business can employ a hybrid strategy without being struck in the middle
Critic of Porter’s generic strategy
Uniqueness of products, quality and service
High marketing based approach
Dyson’s competence
Successful brand management
Why Differentiation?
References
Infrastructure
Centralized Organizational Structure
500 engineers in UK but 4,000 workers in Malaysia

HRM
Process and R&D
Spending more on R&D
Developing prototypes in UK and producing in Malaysia
Procurement
Online-monitor
Inbound
Logistic
Inventory control system
Supply Chain Management
Operation
Just in time
Lean
TQM
Outbound
Logistic
International distribution strategy
Sale and
Marketing
High quality products
Spending less on advertising
Services
repair service at customers’ homes
Clear instruction
Warranty
Profit
Margin
Support Activity
Primary Activity
Recommendations
Strengths & Weaknesses
Opportunities & Threats
Existing Products
New Products
Existing Markets
New Markets
Market
Penetration
Product
Development
Market
Development
Diversification
Dyson needs to be able to prevent other companies from copying their designs and technological solutions by applying for patents at the earliest stage.

Reduce Supply chain costs by distributing directly from Malaysia and reducing suppliers where feasible.

The company currently operates at the high end of the market from a pricing perspective, given the current global economic situation high prices can put consumers off and make products unaffordable.

Dyson’s value chain is split equally between Primary and Support activities – it is not viable in the long term to have such high support costs. A reduction in the cost of support activities could facilitate the reduction in the pricing of products; leading to gaining further competitive advantage in the market.

Innovation and development is important and needs to continue but it is apparent that Dyson invests a disproportionate amount in this area. These costs need to be reduced, by keeping the R&D very focused.

Dyson has some core but limited products; the company needs to expand its product range but keep with the brand image for being advanced and innovative. Running a marketing campaign around their future products being ‘Affordable, Compact, Recyclable and user friendly would also help the company steer clear from continuing towards focused differentiation and risky high margins.
Dyson – Corporate Website (2013) Dyson.Co.Uk [online] available from http://www.dyson.co.uk/ [3rd July 2013]

Euromonitor International (2013) Vacuum Cleaners in the United Kingdom (April 2013)[online] available from <http://www.portal.euromonitor.com/Portal/Handlers/accessPDF.ashx?c=63\PDF\&f=S-227735-23171363.pdf&code=oB3%2bARh6YaWABj2PFL6Ilhtb4o%3d [3rd July 2013)

FAME Database (2013) Company Report [online] available from <https://fame2.bvdep.com/version-201367/Report.serv?_CID=65&context=19LA8JN78CCBEQ6&SeqNr=1> [06/25 2013]

Gangadharan, S. (2009) ERP in Dyson. Liverpool: Liverpool Business School

Lynch, R. (2005) Corporate Strategy. 4th edn. Harlow: FT/Prentice Hall

Ranchhod, A. and Gurǎu, C. (2007) Marketing Strategies: A Contemporary Approach. 2nd edn. Harlow: FT Prentice Hall

The Time 100 (2012) Innovation, Research and Development: A Dyson Case Study [online] available from <http://businesscasestudies.co.uk/dyson/innovation-research-and-development/developing-a-new-dyson.html#axzz2YayyHa61> [07/10 2013]
Upright Vacuum Cleaner
In UK market
Miniaturised Vacuum Cleaner DC11
In UK market
Miniaturised Vacuum Cleaner DC12
In Japan market
Dyson Air Multiplier
In America, Japan, and Australia market
Existing Markets
New Markets
New Products
Existing Products
Bargaining
Power Suppliers
Threat of Substitutes
Trademark, Dyson shows the claim by getting a trademark registration which challenged the UK trademark appeal process.
Legal
Full transcript