A Case Study of New Product

Development on Basis of
“Dyson, Hoover and bag less
vacuum cleaner ”
 A Case Study of New Product Development
on Basis of
“Dyson, Hoover and bag less vacuum
cleaner ”
Prepared for
Mr. Sagib Kumar Ghosh
Course Instructor

Prepared by
Neelima Kamrunnahar 1113280694
Nigar Sultana 1113280695

Program: MBA (1 yr)- Major in Marketing

Faculty of Business Studies

Premier University
About the Company
At a Glance
 Founder of
the
Company

Sir James Dyson

 Summary of the Case

All About Vacuum Cleaner.

Problems of old model Vacuum Cleaner.
Dyson took the initiative.
Introduce Bag less Vacuum Cleaner.
Offered the design to the int. marketers but turn
him down.
Got the success on 1992 for some reasons:
It is made of modern tools that are applied for manufacturing
its suction pipes. As a result it goes to the core and cleans dust
particles.
Most eye catching and stylish design.
There is no need of buying vacuum bags.
The filters are washable and will never get destroyed by the
effect of water.
The dusts that are exhausted are anti-allergic.
Its updated ball bearing activity helps to move the suction pipe
more swiftly and in all direction.
 Q: 1
• How can businesses try to ensure
that heir senior managers (both
buyers and new business
development managers) do not
dismiss exciting technology and
with it potentially profitable
business?
 Ans: 1
Senior managers of new business development have the ability
to detect exciting technologies and always concern about the
new business opportunities.
Opportunity identification comes from different sources like
existing products, individuals, brainstorming, customers,
vendors, unexploited patent and technology.
Managers can use competitive intelligence for their long and
short term plans. Senior managers also collect information
from media and patent office about new technology.
They can take effective decision about the exciting technology
by analyzing information through NPD process.
 Q: 2
• How can governments try to
assist inventors like Dyson and
ensure that more innovations
succeed in their country, thereby
developing their economic base?
 Ans: 2
Dyson did not get any help from the government that is
government refused his proposal for grant and did not lend
him money.
Dyson did not stop his effort but this type of attitude of
government discourage potential inventors to innovate more
and it is an obstacle in developing a country’s economic base
as innovation is the key to success.
Government can assists inventor like the following ways:
– Firstly, by providing financial support that includes loans,
tax exemption, subsidies and grants.
– Secondly, by providing necessary information related to
invention from patent office.
 Q: 3

• What is the role of patents?

To what extent is it an
effective system for
protecting intellectual
property?
 Ans: 3
• Patent: Patent is an exclusive right that grant inventors
ownership of their original ideas, give them temporary control
over who can use those ideas.
• The role of patent: The major roles that a patent plays are:
1. Patent grants inventors to have their ownership over their
invention.
2. Patent gives inventors an opportunity to profit from their
creations.
• Patent is an effective system for protecting intellectual
property.
• Patent gives the right to sue against those who infringed
his/her patent.
 Q: 4
• Explain the rational behind Electrolux and
Hoover's decision not to purchase the
license from Dyson. Given Hoover's recent
development of the Triple Vortex vacuum
cleaner how do you assess this decision?
What level of royalty would have been
reasonable for both parties, that is, Dyson
and Hoover?
 Ans: 4
Electrolux & Hoover was known brand.
Consumers were satisfied with Electrolux & Hoover.
Dyson was non-brand appliances.
Manufacturers tried to avoid risk.
As Dyson's volume of sales (33.5%) that is greater
than Hoover's sales volume (12.3%). That's why it is
rational to pay more royalty to Dyson than Hoover.
 Q: 5
• Why is negotiating a
license for a new so
difficult?
 Ans: 5
Firstly, Amount of money that a licensee agreed to pay
may not match with licensor's expectation.
Secondly, Trust is another significant element that
creates difficulties when inventors are in doubt about
the licensing agreement.
Companies do not agree to pay that amount of money
for licensing and he was uncertain about licensing
money received reflect the true sales figure or not.
The required operational changes are too great.
 Conclusion
Dyson is now a legendary company in vacuum
cleaner industry. There were already a number of
competitors in vacuum cleaner industry when
Dyson came with his new product. This case shows
though Dyson charged twice price than that of
existing products but still his product was able to
capture more than 50% of the U.S market in less
than four years only because of new product
development with introduction of centrifugal force
technology.