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Case - Dyson

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A case for business

innovations:
Dyson, Hoover and the bagless
vacuum cleaner

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BY CLAUDIA ALVES
eiusmod tempor incididunt ut labore et dolore magna aliqua.
Brief history
James Dyson is a British inventor, industrial designer,
farmer, and business magnate. He is best known as the
inventor of the dual cyclone bagless vacuum cleaner.

Dyson Limited, doing business as Dyson, is a Singapore-


based multinational technology company. Founded in 1991
by James Dyson in England, the company designs and
manufactures household appliances such as vacuum
cleaners, air purifiers, hand dryers, bladeless fans, heaters,
hair dryers, and lights.
Explore the key problems Dyson had
to overcome.
Dyson encountered several key problems that he had
to overcome in his journey towards success. These
challenges played a crucial role in shaping his path
and the eventual triumph of the Dyson bagless
vacuum cleaner. Some of the key problems Dyson
had to overcome are:
• Limited appeal and perception
• Competitive market
• Manufacturing and production challenges
• Lack of industry support
• Intellectual property protection
• Financial constraints
Characterise the type of innovation and new
product development in the mature vacuum
cleaner market prior to Dyson. Are there
other industries in this situation?

Prior to Dyson's entry, the vacuum cleaner industry


focused on incremental innovations and improvements to
existing designs. Manufacturers aimed to enhance
suction power, filtration systems, and user-friendliness
while maintaining the conventional bag-based design.
The industry was mature, dominated by established
manufacturers with strong brands and widespread
distribution networks. The pace of change was slow, with
limited breakthrough innovations. This situation is
common in mature industries, where companies prioritize
optimizing existing products rather than making radical
changes. However, disruptive innovations can still occur,
as seen with Dyson's bagless technology challenging
industry norms.
Manufacturing the product has turned
out to be hugely profitable, yet this
was not the original plan; why not?

The original plan for Dyson was to license the vacuum


cleaner technology, but it did not work out as expected.
Established manufacturers rejected the technology, and
Dyson had concerns about maintaining control and quality.
As a strategic decision, Dyson shifted to manufacturing the
vacuum cleaners himself, which turned out to be highly
profitable. This allowed him to differentiate his product,
control the entire value chain, and achieve success in the
market.
Explain the rationale behind Electrolux and Hoover’s decision
not to purchase the licence from Dyson. Given Hoover’s
development of the Triple Vortex, how do you assess this
decision? What level of royalty would have been reasonable for
both parties – that is, Dyson and Hoover?

The rationale behind Electrolux and Hoover's decision not


to purchase the license from Dyson can be attributed to
factors such as their established manufacturing
processes, market perception, and uncertainty about
market demand. Hoover's development of the Triple
Vortex, although not identical to Dyson's bagless
technology, aimed to enhance vacuum cleaner
performance using a different approach. Assessing
Hoover's decision without specific information about the
Triple Vortex's performance is subjective. Determining a
reasonable royalty level would depend on factors like the
value of Dyson's technology and its potential benefits to
Hoover, requiring negotiation between the parties.
Why is negotiating a licence
for a new product so
difficult?

• Uncertainty about the product's success


• Differing perceptions of value
BY CLAUDIA ALVES Thesis Defense Presentation Template
• Intellectual property protection and
enforcement
• Complex technical and commercial
considerations
Explain the very different market entry
strategy used for the United States.

In the case of Dyson and the bagless vacuum cleaner, the


market entry strategy used for the United States differed
significantly from the approach taken in other markets.
The key elements of this different strategy can be
explained as follows:

• Direct-to-Consumer Approach
• Emphasis on Product Differentiation
• Marketing and Advertising
Campaigns
• Demonstrations and Product Trials
• Customer Support and After-Sales
BY CLAUDIA ALVES ServiceThesis Defense Presentation Template
Thank You for Your
Attention!

Natali Gasievi [email protected]

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