Strategic Analysis and Evaluation of the

"Dyson" Group

U51094
Entrepreneurial Business Innovation
Module Leader: Paul Mantle

Handed in
On the 1st of February
By Amin Bengana
07065815

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Introduction:

Dyson Ltd. is one of these entrepreneurial ventures that successfully redefined its
industry by breaking the established business models with an innovative strategy. The
purpose of this assignment is to analyse and evaluate the key strategic decisions made
by Dyson Ltd. in its early years. The analysis is focused on the relationship between
decision-making and organisational structure and will use diverses concepts and
theories.

History of Dyson and Key Facts:

In 1978, James Dyson a passionate of design, enginneering started to be frustrated

with his traditional vaccum cleaner as dust kept constantly clogging the bag and not
picking up dust effectively (Dyson, 1997). This frustration pushed him to find a 'gap'
in the industry where customer desires were not being correctly met. At that time, the
industry was dominated by manufacturers such as Hoover who offered machines with
low performance and poor design. While partly supported by his art teacher wife's
salary, and after five years and more than 5,000 prototypes, Dyson launched his first
vaccum, the 'G-Force' cleaner in 1983 (Dyson, 1997). However, after several rejection
letters from manufacturers and distributors unwilling to launch his product in the UK
as it would disturb the valuable cleaner-bag market, Dyson took a key decision by
launching his new product in Japan through catalogue sales. The G-Force despite a
high selling price of £2,000 was a success; in 1991 it won the International Design
Fair prize in Japan (Dyson, 1997). After obtaining his first U.S patent in 1986 on the
concept, he used the profits from the Japanese licence to set up his own
manufacturing company. Because researching and developing new products and
technology is at the core of Dyson, In June 1993 he opened his research centre and
factory in Malmesbury, Wiltshire (Dyson, 1997). This investment on innovation is
indeed at the very essence of Dyson. Witthin 2 years, the DCO1 became the number
one selling vacuum cleaner in the UK and by 1995 Dyson was reported to be one of
the best brands in the United Kingdom. In the United States, Dyson became the
market leaders by value despite the fact that it was only selling its new models with
"cyclonic seperation". This early success could be explained by the innovative
strategy of Dyson, which solved a problem for customers in a unique way (Johnson et

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 al, 2005). Dyson's investments on R&D paid out and lead to the creation of vacuum
cleaners with even higher suction because of its greater centrifugal force. In 1999,
Hoover and other major manufacturers began to imitate the Dyson's idea on bagless
vacuum cleaners. Dyson was forced to court to protect its invention and won around
$5 million in damages against Hoover UK for patent infringement. At Dyson, the
level of marketing strategy has been far from extensive, it even have a "golden rule"
that avoid employing an outside advertising agency. Dyson has in fact been able to
rely on other marketing strategies such as word of mouth. Today, Dyson Ltd. follow a
global strategy, it transferred its manufacturing plant in Malaysia for economic and
land reasons with some controversy. In 2008, the Sunday Times Rich List estimated
James Dyson’s fortune to be £1.1 billion.

Key Strategic Decisions:

"Business success is born from the design and implementation of effective strategy"
(Gore el al. 1992). Effective strategy can be seen from alternative perspectives. The
term 'key' is associated with those decisions that are critical to Dyson Ltd. success and
long-term survival. In today's uncertain environment, it is critical that these decisions
remain open to revision and change.

The key strategic decisions made by Dyson are as follow:

 Start his first product in Japan

 Create his own manufacturing company
 Choose R&D as a core competence and change the bureaucratic culture to create a
better decision- making environment

The fact that Dyson launched its first product in Japan greatly affected the future of the
company. Mintzberg defined a decision process as 'a set of actions and dynamic factors
that begins with the identification of a stimulus for action and ends with a specific
commitment to action.' (Gore el al. 1992, p.9) James Dyson clearly followed the
'decision process' as he firstly identified the problem that he faced in his host country
which didn't allowed him to market his product. Secondly, he 'gathered information' and
'diagnosed' to finally 'evaluate alternatives' and choose the best options to implement.
This, draw attention on James Dyson entrepreneurial behaviour, as he followed a

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specific path to find an appropriate answer to his problem. Moreover, James Dyson
could be seen as 'transnational entrepreneur' as he seeked a business opportunity in a
different social and economic arena while maintaining business linkage with is former
country of origin (Drori el al. 2009). As a transnational entrepreneur, he had to adapt
himself to the host country's social, economic and political systems, thus requiring
special personality 'traits' such as adaptability, risk-taking, flexibility, self-confidence
and a strong desire to be independent (Deakins and Freel, 2009). This key decision also
draws attention on how James Dyson's perceived risk as an economic-agent. Dyson
(2009, p.132) stated that " it's through experimentation and failure that new ideas are
born. As a nation we've become scared of taking risks, but I see risk and problem
solving going hand to hand "(Dyson, 1997, p.235). Thus, Janney & Dess (2006) argue
that entrepreneurs perceive risk differently depending on their knowledge and
idiosyncratic resources, which suggest that Dyson perceived risk in a different light as
he had substantial experience, knowledge and education in the relevant market and
technology realms. The fact that Dyson signed his first aggrement in Japan was not a
coincidence but instead can be seen as part of the socio-behavioural approach. In other
words, it is the environment and influence of the Japanese culture that allowed him to
successfully purse entrepreneurship (Deakins and Freel, 2009). James Dyson in his
autobiography criticise several time the negative aspects of business in Britain,
especially when it comes to failure managment and describe his success in Japan as his
'commercial salvation' (Dyson, 1997, p.167).

The fact that Dyson decided to set-up its own manufacturing company was the second
important strategic decision that he made. This decision extensively highlights James
Dyson 'high need for achievement' identified by McClelland and his proactivity in terms
of initiative and assertiveness (Deakins and Freel, 2009). To illustrate this, in 1991
James Dyson signed an agreement with 'Vax', a manufacturing company to start
producing his product for the British market, however after Vax postponing several
times the production, James Dyson argued with the Chairman of Vax and said that he
was 'bored of waiting' and was 'going into production' by himself (Dyson, 1997, p.185).
Dyson holds a strong work ethic which illustrates his entrepreneurial commitment to the
ethic of "doing everything ourselves" (Dyson, 1997, p.232). This particular
commitment pushes the employees to do everything from advertising to patent
application. Moreover, besides the fact that Dyson manufacture its own products, it does

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not have any retail outlets, as most of its products are either sold through retailers or via
Internet (Dyson, 1997). All of this suggests that the business model of Dyson is
innovative in way that it is more aligned with the changes in our society. It is designed
around elemination of intermediaries, highly efficient manufacturing, distribution
process, responsive customer service, core technology investments and high customer
value. This business model also serves as a focusing device for the employees within
the company as we will notice in the next key startegic decision (Morris et al. 2003).

Researching and developing new products and technology that are reliable is at the core
of Dyson, 17 per cent of the company's turnover is spent on Reseach & Development
(Dyson, 1997). According to Prahalad and Hamel (1989) cited in Gupta el al. (2007,
p.118), "core competencies are the source of competitive advantage and enable the firm
to introduce an array of new products and services". Furthermore, it's not only the
investment on R&D that makes it a key strategic decision but also the effective
coordination among all departements that makes it successfull and unique (Prahalad and
Hamel, 1990). To understand why R&D is at the core of Dyson we need to look at the
human dimension of James Dyson. As a matter of fact, Dyson almost hold invention as
a value, he claims that "inventions generate further inventions" (Dyson, 1997, p.195)
and do not hesitate to defend this value. For instance, he sent a letter to David Hunt,
then minister of science and technology to critise his position on tax breaks for
companies that invested in R&D (Dyson, 1997). Moreover, as a 'Schumpeterian
innovator' he's way of thinking goes beyond the traditional industry boundaries, which
provide great opportunities for strategic innovation (Schoenberg, 2003). This particular
philosophy driven by James Dyson is widely observable in the day-to-day life of the
company as the close relationship with customers and the free-flowing communication
of ideas drives the innovation process (Jolly, 2003). James Dyson share the same views
on John Kaos's 'idea factory' which suggest that providing an appropriate environment
for creativity is crucial in order to improve creative thinking (Deakins and Freel, 2009).
Thus, the fact that Dyson Appliances ltd. use innovation and design to differentiate their
product has also a considerable impact on the marketing strategy. Indeed, it is by using
researching factors that the marketing department can use the results of such
experimentations to emphasise on the quality of Dyson products (Dyson, 1997).

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Evaluations

In order to evaluate the effectiveness of the strategic decisions that Dyson took, it is
crucial to look at the human dimension of James Dyson.

The knowledge and experience he acquired by overcoming difficulties enabled him to

have an accurate perception of the opportunities, threats and risks that Dyson
Appliances ltd. was facing. For instance, the fact that he choosed R&D as a core
competence at Dyson was a 'rational decision' based on a logical process to achieve a
particular objective (Koontz and Weihrich, 2008). This objective was reached when,
despite all the problems he went through, he managed to build Dyson Appliances Ltd.
into a market leader in a highly competitive industry dominated by multinational
companies. Today, most of the products that Dyson produced won an award for its
design or are displayed at museums across the world (BBC, 2002). This investment on
R&D is also a great competitive advantage as it differentiates its products from
competitors by adding more value to it. Today, Dyson has almost 1000 patents and
patent applications for over 150 different inventions (BBC, 2002).

In today's changing business environment, it is essential for companies to become more

entrepreneurial so that business opportunities are identified and exploited (Brazel and
Herbert, 1999). As a successfull entrepreneur, Dyson share his value by not only
designing vacuum cleaner but also by designing his own working environment that
foster innovation inside the company (Dyson, 1998). Indeed, he successfully got rid of
the traditional way of management that hindered the innovative process within the
company. This way of leading employees could be seen as a 'participatory leadership'
style, as it has a positive impact on the quality of decisions by incorporating employee
information, values and alternatives into the decision process (House, 2004). The drive
for entrepreneurship "lies in the urge to identify sources of existing and emerging
dissatisfaction and devloping solutions to eliminate them" (Ramachandran, 2003, p.3).
Dyson eliminated these sources of dissatisfaction by creating products that are
innovative and efficient (Dyson, 1998). Despite the fact that innovation fosters success
at Dyson, it also can precipitate failure. As Miller and Le Breton-Miller stated (2005,

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p.3) 'the systems that built great companies often worked to destroy them'. Indeed,
James Dyson as the entrepreneur and owner of his company tends to use his freedom to
make moves in the industry that can be seen as being uncertain. In essence, even if
Dyson masters’ different competitive advantages such as efficiency, quality,
innovation, brand building, and entrepreneurship, it is crucial for the company to
understand the fast changing environment. For instance, Dyson could rely more on
priorities such as command, continutiy, community and connection - or the "four Cs".
The command highlights the importance of being decisive, speedy and innovative in
running and renewing the firm. The continuity of the business can be achieved by
defining a clear mission and having the righ core competencies to achieve it.
Community, another driving priority, is the desire to unify the employees around a
strong culture which James Dyson has succesfully achieve for the moment. Finally, a
desire for connection is essential to assure a strong relationship with suppliers, partners,
clients and the broader community. Far from being limitations, these four Cs if
"coordinated" accurately and depending on the strategy that Dyson embrace could be a
source of profund competitive advantage on the long-term (Miller and Le Breton-
Miller, 2005).
Hence, Dyson created a successfull 'corporate entrepreneurship'

Conclusion:

James Dyson is one of this charismatic entrepreneur/leader that through experiences

and failures has created a successfull venture and developed new approaches to
innovation to achieve long-term profitable growth. Today, Dyson's main objective
continues to be the integration of innovation and creativity to provide consumers with
efficient and innovative products. In the Future, Dyson position could be threaten as the
leading vacuum cleaner companies are investing more funds into reseach and
development, which suggest that Dyson will need to not rely only on its innovation and
patents.

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 References

 Brazeal, D. V., and Herbert, T. T. (1999). The Genesis of Entrepreneurship.

Entrepreneurship: Theory and Practice 24(1), pp. 29-45. [Online]. Retrieved on 15
January 2010 from EBSCOhostEJS database http://ejournals.ebsco.com

 Deakins, D and Freel, M. (2009) Entrepreneurship and Small Firms. 5th. Maidenhead:
McGraw Hill

 Drori, I., Honig, B., and Wright, M. (2009). Transnational Entrepreneurship: An Emergent
Field of Study. Entrepreneurship: Theory & Practice 33(5), pp. 1001-1022. [Online].
Retrieved on 15 January 2010 from EBSCOhostEJS database http://ejournals.ebsco.com

 Dyson, J. (1998). Against the Odds: an Autobiography. London: Orion.

 Gore, C., Murray, K. and Richardson, B. (1993) Strategic decision-making. London:

Cassel, p. 9.

 Gupta, V., Gollakota, K. and Srinivasan, R. (2008). Business Policy and Strategic
Management: Concepts and Application. New Delhi: Prentice-Hall.

 Hamel, G, and Prahalad, C. K. (1989). Strategic Intent. Harvard Business Review, 67(3),
63-76. [Online]. Retrieved on 15 January 2010 from EBSCOhostEJS database
http://ejournals.ebsco.com

 Janney, J. and Dess, G. (2006). The risk concept for entrepreneurs reconsidered: new
challenges to the conventional wisdom. Journal of Business Venturing. 21, pp. 385-400.
[Online]. Retrieved on 15 January 2010 from EBSCOhostEJS database
http://ejournals.ebsco.com

 Koontz, H. and Weihrich, H. (2008). Essentials of Management. New Dehli: Tata

McGraw-Hill.

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 Morris, M., Schindehutte, M. and Allen J. (2003). The entrepreneur's business model:
toward a unified perspective. Journal of Business Research. 58(6), pp. 726-735. [Online].
Retrieved on 15 January 2010 from EBSCOhostEJS database http://ejournals.ebsco.com

 Miller, D. and Le Breton-Miller, I. (2005). Managing for the long run: lessons in
competitive advantage from Great Family Businesses. Boston: Harvard Business School
Publishing.

 Ramachandran. K. (2003). Customer Dissatisfaction as a Source of Entrepreneurial

Opportunity. Nanyang Business Review. 2 (2), pp. 21-38. [Online]. Retrieved on 15
January 2010 from EBSCOhostEJS database http://ejournals.ebsco.com

 Schoenberg, R. (2003). An integrated approach to strategy innovation. European Business

Journal. 15(2), pp. 95-103. [Online]. Retrieved on 15 January 2010 from EBSCOhostEJS
database http://ejournals.ebsco.com

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Appendix:
Dyson facts & figures:

Dyson technology

Dyson Dual CycloneTM (1993): Highly efficient cyclonic vacuum cleaner.  A dust
separation system that does not rely on bags – resulting in constant powerful suction
room after room. Dual Cyclone™ models include the DCO3; DCO4; & DCO5.

Dyson Root CycloneTM (2001): More advanced cyclonic vacuum cleaner technology
with 8 cyclones in upright cleaners and 12 in cylinder machines. 45% more powerful
than Dual CycloneTM technology, giving better dust and dirt pickup as well as constant
suction. Root Cyclone™ models include the DCO7; DCO8; DC11; DCO8 Telescope,
DC14; & DC15.

Dyson Digital Motor (2004): Dyson-designed switch reluctance motor; smaller, longer-
lastinand more powerful motor which will provide future Dyson products with
diagnostic capabilities.

Dyson 2-drums (2004): Dyson’s 2-drums washing machine has a unique wash action
with two aligned drums that rotate in opposite directions, replicating that of a hand
wash. 

How many people have a Dyson?

In a survey carried out for Dyson in 2004 by BMRB International more than one in three
people in the UK claimed to own a Dyson vacuum cleaner.

In 2004 Dyson continued as the number one selling vacuum cleaner brand in the UK by

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volume and value. (GFK Lekrak Jan 2005)

In the USA, Dyson holds the number one spot by upright vacuums at 20.7% by value
(NPD Houseworld 2004)

Dyson is the No1 selling vacuum cleaner brand in Western Europe* and is the market
leader by value in Australia in New Zealand.

Dyson has become Australia’s number one vacuum cleaner brand by 21% volume and
49.6% value share (Gfk Lektrak Jan 2005).  

92% of Dyson owners would recommend a Dyson to their friends and family (67%
definitely and 25% probably) - Dyson Brand Tracker - Synovate Nov / Dec 2004.

 
* Combines sales from UK, France, Belgium, Netherlands, Germany, Switzerland,
Austria, Portugal, Spain, Italy and Denmark.

Where is Dyson?

Dyson vacuum cleaners are available in 38 countries: Andorra, Australia (1996), Austria
(2000), Belgium (1999), Czech Republic (1998), Cyprus (2002), Denmark (2000),
Estonia (2004) Holland (1999), Falkland Islands (2002), France (1996), Finland (2003),
Germany (1998), Gibraltar, Greenland, Ireland (1995), Israel (1998), Italy (2000), Japan
(1998), Latvia (2004) Luxembourg (1999), New Zealand (1998), Norway (2001), Poland
(2003), Portugal (1999), Russia (2002), Singapore (2000), Slovakia (1998), Slovenia
(2002), South Korea (2003), Spain (1998), Sweden (1997), Switzerland (1999), Turkey
(1997), USA (2002), Oman (2003), United Arab Emirates (2003) & UK (1993). 

Dyson’s fundraising and work with schools

Dyson sponsored Sir Ranulph Fiennes to walk unaided across Antarctica and raised Ł1.8
million for Breakthrough Breast Cancer in 1996/97.

Dyson raised Ł1.5 million for Meningitis Research Foundation in 2000/01 for vital
research.

Dyson is helping with the teaching of design and technology in schools. 

Dyson conducts workshops and has 70 education boxes to send to teachers and pupils in
order to learn more about the design process.

Dyson supports the Design and Technology Association’s teacher of the year award
every year.

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Dyson recently donated Ł1/2 million for CLIC with their Colour My Dyson competition
and through the sale of the CLIC Dyson machine.

Dyson donates around 250 vacuum cleaners every year to good causes.

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