In “Inside Dyson: a distinctive company?”, Shepherd et al. (2011) gives details of the secret of Dyson’s success – the company specializing in innovative, design-heavy vacuum cleaners and other household appliances. The successes and failures of Dyson’s design efforts (from their successful vacuums to the 3-in-1 vacuums that did not test well with customers) are explored, as well as their unique perspective on business, which puts quality and innovation above anything else.
1. Using frameworks from the chapter, analyze the strategic capabilities of Dyson.
The strategic capabilities of Dyson revolve primarily around a resource-based view of the strategy with a heavy focus on engineering design; they spend a tremendous amount of time developing and engineering prototypes for household products that seek to provide a twist to the typical device (e.g., vacuum cleaners that provide smooth turning around the corners, oscillating fans that “multiply” air, etc.) This creates a niche in what can be an overly-saturated market. Providing a unique spin of this sort on a product can offer tremendous advantages. Combine this with state-of-the-art, sleek design elements and bright, colorful exteriors, and Dyson creates a number of high-end, well-sought-after appliances. Dyson invests heavily in Chinese and Asian manufacturing in order to make their products cheaper, so that they can maintain profit margin benchmarks. This emphasis on design in their organizational planning means not as many products being manufactured. But what they do sell they sell to a target market at higher prices.
Given the innovation that is present in Dyson’s business strategy, it is quite clear that their strategic capability is high, even though the risks can be high as well due to the experimental and ‘out there’ nature of their products which may be too daunting for normal consumers.
2. To what extent do you think any of the capabilities can be imitated by competitors?
The primary niche that Dyson follows is superior design. As a result, it can be quite difficult to replicate the specific strategic capabilities. Their focus on innovation revolves around them being the only ones around to actually try to change the way the vacuum or other appliance is designed. The level of specialization is what attracts customers to them. In order to provide legitimate competition to Dyson, superior engineering designers would have to be hired, and a much greater focus on innovation would have to be attempted. Otherwise, Dyson’s dominance in the high-end, experimental house-ware market remains unchecked by competitors. Competitors are already trying to imitate their products with the USA Wind Tunnel vacuums and Mjele swivel-head vacuums. Yet the patents Dyson has placed on their product prevents other companies from outright stealing of their ideas.
3. Which of Dyson’s distinctive capabilities may become threshold capabilities over time?
The existence of high-value specialties will likely become a threshold capability for Dyson as the time goes on. Threshold capabilities are what is required to remain in the market. Currently, what is allowing Dyson to maintain its high prices is the high quality of the design and engineering present in their products. Compared to other consumer-level appliances of this kind, Dyson stands out as a distinctive product from a marketing standpoint. Emphasizing the new and innovative stuff allows the consumer to feel as though they are receiving a brand new, insightful product, leagues ahead of the competition. For Dyson to change its business model in any way towards increasing volumes of standard products would be to tarnish its image, nearly irreparably. What is maintaining Dyson’s primary conceit is the design innovation, which is a clear threshold capability.
4. Bearing in mind your answers to questions 1 and 2, how crucial is Sir James Dyson to the future of the company? What might be the effect of his resignation or the sale of the company?
Given the importance of James Dyson, it would certainly be a blow if he were to leave or sell the company. James Dyson is a prominent public figure and the best spokesperson in commercials Dyson company could have.