MASTER OF BUSINESS ADMINISTRATION AWARDED BY NOTTINGHAM TRENT UNIVERSITY ASSIGNMENT SUBMISSION FORM Note: Students must attach this

page to the front of the assignment before uploading to WECSERF. For uploading instructions please see the help file online Name of Student: JAMES A/L AROCKIASAMY Student Registration Number: JB136 Module Name: CONTEMPORARY ISSUES IN HUMAN RESOURCE MANAGEMENT Module Number: WEC-MBA-13-0506 Assignment Title: THE DYSON STRATEGY TO STAY COMPETITIVE IN BUSINESS AND TECHNOLOGY Submission Due Date: 1st November 2009 Students Electronic Signature: JAMES AROCKIASAMY Plagiarism is to be treated seriously. Students caught plagiarizing, can be expelled from the programme (Number of words in this assignment 6635 words)

MBA Jan04 Page 1

Assignment Form

Executive Summary The Michael Porters Five Forces has been identified as a suitable tool to perform vacuum cleaner industry analysis which DYSON is competing in. The forces discussed include: Force 1 Bargaining power of suppliers Force 2 Bargaining power of buyers Force 3 Threat of new entrants Force 4 Threat of substitutes, and Force 5 Rivalry among competitors In order to understand the strategic competences of DYSON it is useful to complete an analysis that takes into account of DYSONs vacuum cleaner business. SWOT analysis has been identified to analyze the organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. The analysis includes: S - Dyson Strengths W - Dyson Weaknesses O Dyson Opportunities, and T Dyson Threats DYSON must look into the consideration of relevant forces in the external environment that affects the overall business before defining strategic choices for the organization. The adoption of Ansoffs Matrix will offer strategic choices to achieve DYSON business growth objective. The analysis includes the following strategies. 1. The Market Penetration (with existing market and existing product) 2. The Market Development(with new market and existing product) 3. The Product Development (with existing market and new product) 4. The Diversification (with new market and new product) DYSON has defined the Marketing Mix concept to market its product by adopting the 4Ps strategy, which includes focusing on: 1. The Product 2. The Price 3. The Place, and Page 2

4. The Promotion Table of Contents Introduction The Analysis of DYSON Marketing Strategy What is Michael Porters Five Forces? The Application of Michael Porters Five Forces DYSON Strategic Competences Globally Positioning DYSON What Are The Strategies? The Defining Strategy for DYSON The Marketing Mix Concept Conclusion References Appendices Page 4 Page 5 Page 5 Page 6 Page 13 Page 18 Page 21 Page 25 Page 26 Page 27 - 32

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THE DYSON STRATEGY TO STAY COMPETETIVE IN BUSINESS AND TECHNOLOGY Introduction In his book entitled, James Dyson Against The Odds, Sir James Dyson stated that The best kind of business is one where you can sell a product at a high price with a good profit margin, and in enormous volumes. For that you have to develop a product that works better and looks better than existing ones. It is clear that Sir James Dyson was referring to the importance of producing excellent products for customers. By applying this marketing strategy in mind, Sir James Dyson prepared to break conventional rules which have plagued peoples mind to accept products which have little value added benefits. The bold decision taken by Sir James Dyson will involve examining, upgrading and strengthen human motivation at work and fulfilling career aspirations within the organisation. This is where the Human Resource Management activities play an important role, right from selection-placement to performance appraisal, salary-career management and training of employees in the organisation. Gary Dessler has defined Human Resource Management as The policies and practices involved in carrying out the people or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising Therefore, in a nutshell The Human Resources Management (HRM) will decide what staffing needs an organization has and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Human Resource Management activities also include managing an organizations approach to employee benefits and compensation, employee records and personnel policies. In usual cases small businesses have to carry out these activities themselves because they cannot afford either a part-time or full-time help. However, these organizations will always ensure that employees have and are aware of personnel policies which conform to Page 4

current regulations. These policies are often in the form of employee manuals, which all employees own. The Human Resource Department need to conduct in-depth analysis during the recruitment and selection process to ensure that the right candidates are chosen for a particular position. They must ensure that they not only hire people who have the right qualifications for the job but people with the right attitude. A complete training program developed for employees of an organization should include employee orientation program and comprehensive training process. A successful employee orientation program should accomplish the following objectives for new employees: Make employees feel welcome and at ease Help employees understand the organization in a broad sense Make clear to employees what is expected of them in terms of work and behavior Help employees begin the process of becoming socialized into the firms ways of acting and doing tasks The Human Resource Department must also seek ways to improve the current methods of training, such as: On-the-job training (OJT) Getting employees to learn about a particular job by actually doing the job. Apprenticeship training A combination of classroom lectures and on-the-job training. Informal learning A major form employee learning by performing their jobs on a daily basis. Job instruction training (JIT) It is done by listing each jobs basic tasks, along with key points, in order to provide step-by-step training for employees. The Human Resource Department holds the responsibility of improving management development of an organization. The various attempts to improve current or future management performance should be well captured and documented for on-going performance appraisals and reviews. The improvements can be achieved by imparting knowledge, change employee attitudes toward work and increase skills. Page 5

Therefore succession planning of an organization is crucial to ensure that senior-level openings are planned for and eventually filled by suitable candidates. Human Resource Department should participate in the following activities: Anticipate management needs Review firms management skills inventory Create replacement charts Begin management development Management programs of an organization may also include the following managerial onthe-job training Job rotation Moving a trainee from one department to another to broaden experience and identify potential strengths and weaknesses. Coaching/Understudy approach The trainee works directly with a senior manager or the person whom the trainee replaces. Action learning Management trainees are allowed to work fulltime analyzing and solving problems in other departments Case study method Managers are presented with a description of an organizational problem to diagnose and solve. External seminars Many companies and universities offer Web-based and traditional management development seminars and conferences. Performance management of an organization includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service or employees. The employee performance management involves planning, which means performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. It also includes the measures that will be used to determine whether expectations and goals are being met. Involving employees in the planning process helps them understand the goals of the organization, what needs to be done, why it needs to be done and how well it should be done.

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Sir James Dyson has also stated that People will forget what you said, People will forget what you did, but people will never forget how you made them feel. Therefore, it is essential that employees of an organization is rewarded and recognized periodically. Reward and recognition plays an important part in at least these areas of an employees working environment: Employee Satisfaction influencing retention and motivation Performance Management creating a workplace environment that provides positive reinforcement of behaviors necessary to achieve results and business goals The following are some suggested criteria for successful reward systems in order to gain maximum participation and support from employees. Reward systems need to have a positive impact on employee behavior Contingent on achieving desired performance levels rather than on merely doing certain tasks Meaningful and valuable to the individual Based on objective and attainable goals Open to all employees in the organization and not based on a competitive struggle within the workplace (everyone can win) Balanced between conditions in the workplace (extrinsic) and fulfillment of individual needs and wants (intrinsic) Reward systems need to focus efforts on serving the customer (internal or external) Reward systems need to enhance collaboration within the workplace A popular slogan for managing and evaluating success criteria in an organization has been: SMART Specific, Meaningful, Achievable, Reliable, Timely

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Employee Relations involves the body of work concerned with maintaining employeremployee relationships that contribute to satisfactory productivity, motivation, and morale. Essentially, Employee Relations is concerned with preventing and resolving problems involving individuals which arise out of or affect work situations. Advice is provided to supervisors on how to correct poor performance and employee misconduct. In such instances, progressive discipline and regulatory and other requirements must be considered in effecting disciplinary actions and in resolving employee grievances and appeals. Information is provided to employees to promote a better understanding of management's goals and policies. Information is also provided to employees to assist them in correcting poor performance, on or off duty misconduct, and/or to address personal issues that affect them in the workplace. Employees are advised about applicable regulations, legislation, and bargaining agreements. Employees are also advised about their grievance and appeal rights and discrimination and whistleblower protections.

Factors Affecting Bargaining Power of Suppliers DYSON suppliers have the most power and influence if: 1. The resources required are available only from a small number of suppliers. For instance, the motor used in the vacuum cleaner is only purchased from a single source supplier, namely Johnson Electric. This supplier has been supplying the motors to DYSON at a very high price and has been charging DYSON for the engineering samples, too.

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There have been several delays of motor deliveries and incomplete motor validation tests in the part of the motor supplier. 2. The resources required are unique and custom made for a particular application which makes it costly to switch suppliers. Johnson Electric, as a single supplier for vacuum cleaner brush bar motor supplier develops a couple of motors for DYSON products. As the motor developed for various types of vacuum cleaners are different in terms of shape, size and performance, there isnt any other source to replace them. 3. The material purchases do not represent a significant portion of the suppliers businesses. Johnson Electric is an organization which has huge customer base and DYSON business represents 10% of the total business volume. If this is the case, Johnson Electric may choose to ignore DYSONs stringent requirements in terms of support and bargaining issues. This will put DYSON in a position of less negotiation power. Reducing The Bargaining Power of Suppliers

There are businesses that do not have the resources to produce their own products. DYSON has recently formed a partnership with a contractor, by the name of MEIBAN TECHNOLOGIES to perform manufacturing of their vacuum cleaners. This partnership will enhance an even distribution of power as MEIBAN has been producing vacuum cleaner parts for DYSON. DYSON can achieve their strategy to be the low cost and high quality leader in the market by working towards the following measures. a) To reduce inventory costs by providing just-in-time deliveries. DYSON to ensure that procurement for materials are well prepared, planned and executed. The product manufacturing schedule must be reviewed and updated frequently and in line with customers requirement. b) Enhance the value of goods and services supplied by making effective use of information about customer needs and preferences. DYSON vacuum cleaners are sold worldwide and customers voice is very important for product quality improvement. Valuable feedbacks

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and complaints from customers will be used to enhance product quality and performance. Periodical visits to customers residencies are organized to foster relationship. c) Speed the adoption of new technologies. DYSON is all about product design and innovation of technology. New technology and product innovative design must be released for production within a short period of time. DYSON must ensure that new technologies are brought to market swiftly before being coined by competitor. The Bargaining Power of DYSON Buyers The power of buyers describes the effect that DYSON customers have on the profitability of your business. DYSON vacuum cleaners are sold to retailers, namely CURRYS in the UK and WALMART in the United States of America. The retailers in purchase huge amount of machines and form a big percentage of DYSON sales. The large quantity bought by the retailers will have significant leverage to negotiate lower prices and other favorable terms, such as transportation costs, payment agreements and after sales support contracts. The threat of losing an important buyer or customer will put DYSON in a weak position to enforce their pricing, sales agreement and payment issues. On the other hand, DYSON gain greater control when machines are sold to smaller buyers, especially when selling to shopping outlets or stores. DYSON can maintain their machine cost, apply terms & condition and confirm pricing. It can be concluded that DYSON buyers will have more power, if: 1. There are many existing and emerging vacuum cleaner companies, supplying cleaners to buyers who purchase on large and small quantities. The emergence of new companies will put DYSON with little negotiating power as these companies are also competing to sell their cleaners to large buyers or retailers. 2. Customers have access to and are able to evaluate market information regarding DYSON vacuum cleaners. The DYSON website contains information regarding its vacuum cleaners in terms of product specification, DYSONs patented technology and machine pricing. It would be difficult and provide less room for negotiation if buyers or retailers know DYSONs market demand, prices and costs. 3. Customers can easily, and with little cost, switch to another product. As DYSON products fall under the premium product, there are some customers who may want to change to another brand model which are much cheaper. The patented technology of Page 10

DualCyclone for DYSON vacuum cleaners and its no suction loss performance collectively increases the machine price. DYSON can reduce the bargaining power of its customers by increasing their loyalty to DYSONs business through partnerships or customer loyalty programs. This can be done by introducing points systems for all machines and accessories purchases. The collected points may be used to purchase other DYSON products at discounted price. DYSON can also organize campaigns to sell its products at factory price on a periodical basis and provides the opportunity to interact directly with its customers. This allows existing customers to provide feedbacks and concerns which can be used to enhance product quality and reliability. DYSON can appoint agents, in particular its employees to market and promote their vacuum cleaners. The employees friends, neighbors and relatives will be more receptive to DYSON employees explanation and presentations of vacuum cleaners. A quick deal can be achieved as relationship between employees and close ones is usually strong. The Threat of New Entrants DYSON has business market which is cornered with its products and the huge success in its vacuum cleaner business has inspired others to enter the industry and challenge DYSON position. The threat of new entrants is the possibility that new companies will enter the vacuum cleaner business. DYSON must put an effort to analyze the threat of new entrants which involves examining the barriers to entry and the expected reactions of existing firms to new competitor. The influx of emerging new entrants in the industry should encourage DYSON to examine the various barriers to new entry which involves costs and legal requirements. These barriers protect DYSON and its existing business by being a hurdle to other organizations which try to enter the market. DYSON must review details of their copyright and patent agreements and update them in order not to be duplicated by new entrants. The processes and their changes are not protected by regulations or patents and therefore DYSON is in an advantage position as compared to new entrants. This advantage is evident when DYSON announced its new technology for the manufacturing of other domestic appliances. The introduction of new appliances were Page 11

introduced to the market within a short period of time and sales picked-up swiftly as further approvals for the manufacturing new products were not required. DYSON must put all effort to retain its existing customers and be loyal to DYSON brand. The reliable and high performance products from DYSON can make their existing customers come back for further purchases and advice. A strong brand loyalty can only be achieved if existing and potential customers are satisfied with the product performance and after sales support rendered to them. DYSON can achieve customer satisfaction by providing discounted price for products which are bought by existing customers. The price reductions for existing customers cultivates a sense of belonging to DYSON and make them feel comfortable and confidence with new products. DYSON must focus their attention and effort on after sales service to their customers. DYSONs 24-hour Customer Care Center provides all information regarding new products, FAQs and assistance, should machine breaks down while usage. This service brings DYSON and its customers closer and resolves any confusion which may arise with regards to the product. DYSONs Customer Care representatives can make scheduled visits to their customers residency and interact with them directly. This will give the representative to understand and review the feedbacks from customers directly. DYSON can work to improve the quality and services upon receiving value added proposals from customers. DYSON can demonstrate its ability and desire to retaliate to potential entrants and setting a product price that deters entry. This can be done by setting a price that earns positive but not excessive profits which could lessen the threat of new entry in the vacuum cleaner industry. DYSON may review the price of their products and set the price according demand and geological factors. The price of vacuum cleaners at rural and suburb areas can be lowered to capture the market and instill customer confidence in DYSON products. Threat of Substitutes It is noted that in a vacuum cleaner business, theres a misconception that carpets can be cleaned by any vacuum cleaner found in the market. In addition to cleaning carpets, a high performance cleaner must be able to protect the environment by reducing noise pollution, cater for people with breathing problems and usage flexibility. Page 12

DYSON cleaners are also about requiring less storage space for keeping cleaners and this has been a prime concern for cleaners, marketed in Japan. As Japanese homes are small and petite, the vacuum cleaners designed for Japanese homes are small in size, too. These cleaners fit very well in their cabinets and it is very easy to wrap the hose and its power tools after usage. DYSON has developed cleaners for Asthma patients who are sensitive to dust and smoke. A special filter (HEPA) has been designed and included in the vacuum cleaners, where the filter is capable of filtering 90% of dust and bacteria. As this feature is not found in other substitutes, DYSON has gain an added advantage in marketing its product. Competitive Rivalry Within Industry DYSON understands that competition is the foundation of free enterprise system and with small businesses even a little competition goes a long way. The companies in the vacuum cleaner industry are mutually dependent; the actions from one company usually invite competitive retaliation. At such, DYSON must analyze the rivalry at the extent to which value created in an industry will be dissipated through head-to-head competition. Rivalry among competitors is often the strongest of the five competitive forces discussed in this analysis. If the rivalry or the competitive force is weak, then DYSON may be able to raise the product price, provide less accessories or gadgets for the existing price and thus earning huge profits. As this is not happening now, the intense competition has made DYSON to offer many gifts and discounts to keep customers satisfied and gain loyalty. Prices of vacuum cleaners have been slashed at break-even levels to further expand customer base. The satisfaction of customers should be DYSONs core priority and frustrated or unsatisfied customer can easily switch between brands. The following methods can retain customers from switching over: 1. Make courtesy calls to keep in touch with existing customers 2. Make scheduled visits to customer residency and get feedback and concerns 3. Organize road trips and provide demonstration of product performance and features Page 13

A move by DYSON to extend its product warranty period from 3Years to 5 Years has boosted the sales of their cleaners rapidly. This is a very good marketing strategy to ensure that DYSON cleaners always stay competitive in the industry and create more customer confidence in its products. Allan Leighton, the author of the book, ALLAN LEIGHTON ON LEADERSHIP has commented the following regarding technological advancements. Good Product or Good Service is not good enough anymore. Technological change means constantly enhancing products and working with shorter lifecycles. This is obvious that innovation or improvement to existing products is the key to staying competitive. A total of 130 million was spent in the year 2008 to develop new products and improving the features of existing products. DYSON has also recruited 200 Mechanical Design Engineers to innovate new product designs and features. DYSON Strategic Competences In order to understand the strategic competences of DYSON it is useful to complete an analysis that takes into account not only DYSON vacuum cleaner business but the business of the competitor, too. SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. Traditionally, a SWOT analysis confines strengths and weaknesses to DYSONs internal workings while opportunities and threats refer only to the external environment. SWOT stands for Strengths, Weaknesses, Opportunities and Threats as depicted in Diagram 2.

Diagram 2 SWOT Analysis

Strengths

Weaknesses

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Opportunities

Threats

DYSON Strengths DYSON is about inventing and making things work better thus producing highly reliable and best performance products. The Dual Cyclone Technology which is integrated in its vacuum cleaners provides no loss of suction during carpet cleaning. DYSON vacuum cleaner is the first vacuum cleaner in the world to use The Dual Cyclone Technology which provides no loss of suction for maximum cleaning. DYSON vacuum cleaners are now used in almost 60% of homes in the UK and have become the Number One vacuum cleaner among users who are sensitive to dust and smoke. DYSON Engineers are trained to be creative and innovative when it comes to expressing new ideas, designing products and testing them for reliability. The ability and knowledge acquired by DYSON Engineers have been put into practice by developing state-of-the-art vacuum cleaners with highest performance. DYSON Engineers in Malaysia have been given a thorough and detailed training and coaching by their counterparts in DYSON UK in the areas of product design, product development, product testing and product approvals. In addition, these trainings have forged a closer relationship between the engineers from the UK and Malaysia. DYSON Weaknesses Hoover vacuum cleaners are low priced and this has the customers coming to purchase their product. In order for Dyson to boost their sales, they too need to find ways to improve their price strategy in the sales market. The following areas can be looked into while reviewing the pricing of products. 1. To organize special-event pricing to attract more customers.

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 Lowering the price of products during festive seasons and year-end sales can do this. Advertisements in the form of banners and brochures can be prepared and distributed to people at densely populated areas. The ideal place will be at train stations and shopping complexes. Organizing sales campaign by having speech rally at certain designated areas. Advertising in the media, such as television, newspaper and magazines. To encourage personal selling to customers on a one-to-one basis. This will enable the customer to interact directly with the sales person. Various questions and doubts about the product can be answered immediately. 2. Change the warranties and services contracts terms by waiving or reducing the price of parts. The price for accessories or parts replacement during machine repair can be waived or reduced, substantially. This will encourage customers to purchase or ask for a trade in for new machines The warranty period for the purchased machines can also be extended to a longer period without having to pay for extra premium. One to-one product exchange policy can also be applied which will further encourage customers to put their trust in the organization and make them feel important. 3. Introducing hire purchase scheme to encourage customers to buy cleaners. Through this scheme, customers can choose to buy top of the range cleaners with low interest rate. In return, the organization can boost the sales and earn extra income from the interest without having to slash their listed price. Appoint retailers who are keen to provide this type of sales method and train them to co-ordinate their activities. Customers information and financial status are confidential and should be kept in proper place. The appointment of a general clerk will be good to organize these details. Introduce the one-to-one exchange policy should the cleaner breakdown. Page 16

DYSON Opportunities A recent government regulations in the UK has made DYSON founder, Sir James Dyson to abandon his plans to set up a new school by the name of Dyson School of Design Innovation. This school was intended to help young people in design education and aimed at providing an exciting education in the field of product design and development. The plan to set up the school was hampered by the opposition from the Environment Agency and government bodies where further explanation to the refusal was not given. (A detailed report can be found in the APPENDICES of Page 27 & Page 28) As Malaysia has an open system of Government and economy, with investor-friendly policies and a host of attractive incentives, DYSON can look into setting up education colleges and universities here. The Third Industrial Master Plan (IMP3) Of Malaysia has also included education and training as their non-Government services for greater development and promostion. The Non-Government services are expected to grow at 7.5 per cent annually and contribute 59.7 per cent to GDP in 2020. Furthermore, the total investments of RM687.7 billion (at 45.8 billion annually) will be done to boost this sector. DYSON has also suspended its vacuum cleaner manufacturing activities in China due to international agreements which have affected trade and investment flows. The continuous participation in international agreements which facilitates efforts to integrate into global economy has made Malaysia an ideal location for foreign investments. Malaysia has strategies to initiate more bilateral or regional economic agreements and FTAs with other trading partners. The economic agreements are devised for enhancing cooperation and collaboration with the business sector to ensure that they are absolutely beneficial to each other. The relevancy of the agreements will provide the enabling environment and opportunities for greater growth and development of Malaysias business sector. DYSON Threats The emergence of substitute products in the market has been a constant threat to DYSON and its businesses in terms of copyright protection and market share. Page 17

Patents or copyrights only last for 20 years, so DYSON tries to patent its innovations as late as possible in order to maintain the secrecy. The design of a new product will require a family of approximately 20 patents to be filed simultaneously in a number of countries and thus a single vacuum cleaner model could end up having 200 patents on it. DYSON has up to 500 patent applications pending at any one time and patent protection costs 1 million a year and thats indeed an expensive business. SAMSUNG was ordered by a British Court to pay DYSON a total amount of 590 000 for trying to patent DYSONs Triple-Cyclone Technology. (A detailed report can be found in the APPENDICES of Page 29 & Page 30) As patent violations are a constant threat to DYSON, defending intellectual property rights is vital. DYSON must enforce infringement rights rigorously should someone or any organization copies the patents. As Dyson vacuum cleaners are of premium quality and continuous improvements in technology are incorporated to its products periodically, price-skimming approach is applied. The price skimming method enabled Dyson to recover investments made during the following period. 1. Research and Develop stage of its product, and 2. Protecting Intellectual Property Patents DYSON must understand that high cost of product may shift customers taste away from the organizations product. The price of a Hoover vacuum cleaner is about 3 times cheaper than a Dyson. The low price has attracted more customers to but their product and has satisfied certain segment of customers. The streams of promotions and sales discounts offered during festive seasons or annual nationwide sales campaign has boosted the sales of Hoover vacuum cleaners. Hoover has also used their creativity to sell more cleaners by introducing the Gift Idea package that will attract more customers. The package consists of a cleaner and accessories that are attractively packed and meets the eye of their customers. DYSON, on the other hand must seek ways to improve their price tagging and further interact with their existing customers to understand their needs. Page 18

Globally Positioning DYSON What Are The Strategies? DYSON must look into the consideration of relevant forces in the external environment that affects the overall business before defining strategic choices for the organization. The change in the external environment may induce DYSON to make adjustment in its competitive business strategies. In making these adjustments, the range of options considered are filtered and constrained so as to be consistent with values, beliefs and philosophies engrained in the mind of key decision-makers. As choice are also embedded in particular historical and institutional structures, the range of feasible options available at any given time is partially constrained by the outcome of previous organizational decisions and current distribution of power in DYSON. A well known marketing and business tool which is designed to offer strategic choices to achieve DYSON business growth objective is the ANSOFFs MATRIX. This marketing tool was first published in the Harvard Business Review (1957) in an article called Strategies for Diversification.

PRODUCTS
PRESENT NEW

MARKET S

PRESENT

Market Penetration

Product Development

NEW

Market Development

Diversification

Diagram 3 The Ansoffs Matrix Page 19

The Market Penetration Strategy (for existing markets and existing products) This strategy allows DYSON to enter or penetrate the vacuum cleaner industry with current models and existing technology. The Dual Cyclone Technology incorporated in DYSON vacuum cleaners is the best method to attract new customers and pull competitors customers. The market share of vacuum cleaner industry can be increased should focused attention given to the market penetration strategy. DYSON can also attract new customers of its products and convince existing customers to purchase new cleaner models by adopting the following process: Advertising new products through newspapers, magazines and television. Products details with regards to price, performance and operability can be defined in full color with impressive presentation. Organize road-trips to introduce and demonstrate DYSON vacuum cleaners to people who do not have much time and means to visit electrical stores to view DYSON cleaners. The house to house visit also paves way to a closer relationship with the community. Introduce Gift Idea for DYSON products during festive seasons where the products can be beautifully packed with attractive wrappers. This method will encourage customers to view the product and its features. Customer loyalty program can be introduced in order to encourage existing customers to come back and purchase other DYSON products. The loyalty program can be included with discounted prices and special gifts for regular customers. The Market Development Strategy (for new market and existing products) This strategy allows DYSON to target an established range of vacuum cleaner models, which have been in the market for many years, to a different customer segment to realize more revenue for the organization. Page 20

The DC21 range of canister vacuum cleaners have been in the market for more than 5 years and it is the 3rd highest marketed model in the UK. The DC21 vacuum cleaner can be further marketed to other countries whose domestic power rating is similar to the UK rating. DYSON can start to put their effort and forces to market DC21 range of canister vacuum cleaners to Australia and New Zealand. As the people in Australia are very familiar with other DYSON products, such as the AIRBLADE, the introduction of DC21 vacuum cleaner will become popular. The popularity of Sir James Dyson in Australia is evident through the James Dyson Award program which is aimed at rewarding the outstanding talent that exists amongst future Australian Designers. (A detailed report can be found in the APPENDICES of Page 31 and Page 32) The Product Development Strategy (for existing market and new product) DYSON has gained the reputation of being a world leader in the vacuum cleaner industry. The organization with a market for vacuum cleaners can embark on a strategy of developing other domestic appliances which can cater for the existing market. New products from DYSON can be targeted to the existing customers who have high confidence and perception regarding existing products. Newly developed products can gain new customers through intensive marketing plan and hence, new product development can be a crucial business strategy. Brochures and pamphlets can be sent to existing customers and let them know about the launching of DYSON new products. Details of the new products such as performance, operability and price can be well demonstrated with full color pictures and diagrams. Introducing new product and technology to the existing market will help DYSON to stay competitive and gain greater market share. DYSON must take note that the development of new products should be completed within a specified period of time upon declaring the product specification to potential buyers. The product development and patent costs must be closely monitored and reviewed periodically so that the final product cost does not exceed the product specification requirements. Page 21

The product must be thoroughly validated and tested by approval bodies from various countries to ensure that the reliability and safety of the products are at its peak before marketing. Approval bodies such as BEAB from UK and JIS from Japan are some of the organizations which require uncompromising regulations to be implemented all new products. The Diversification Strategy (for new markets and new products) DYSON will be taking greater risk when it enters a particular market where it had no presence before by introducing a new product for a new market. The matrix illustrates that the element of risk increases the further the strategy moves away from known quantities such as the existing product and existing market. Diversification is the only strategy which stood apart from the other as it requires new skills, new techniques and new facilities. As a result, diversification will invariably leads to physical and organizational changes in the structure of DYSON business. Although DYSON has only started to work on product diversification, a focused attention should be given during development stages in order to resolve conflicts during product launch. The Defining Strategy for DYSON The Marketing Mix Concept The acceptance of Dyson vacuum cleaners around the world is an indication that this product is easily available and has satisfied the needs of end users. The great leap in sales figure indicates that the organization has adopted a marketing strategy, which has the customers agreed and satisfied with Dyson products. The marketing strategy is indeed a core requirement in determining the organizations direction and approach when marketing their products. Philip Kotler, the author of the book, Marketing Management, has provided the following comments regarding the strategies for product marketing: The set of marketing tools that the firm uses to pursue its marketing objectives in the target market. DYSON should employ the Marketing Mix concept which can help the organization to produce and market vacuum cleaners that are of premium standard. The premium standard products from DYSON also face stiff competition from other brand manufacturers. Page 22

DYSONs prime competitor has been Hoover, who is also a major supplier of vacuum cleaners throughout the globe. The utilization of Marketing Mix method to boost the sales of products has also given DYSON the upper edge against its competitor. The emphasis given by DYSON for the 4 elements of Marketing Mix is as described below:

1. The Product Being a premium product DYSON cylinder vacuum cleaners are incorporated with patented Dual Cyclone Technology that never loses suction as compared to other vacuum cleaners. The Dual Cyclone Technology do not require dust bag as compared to its competitor where their cleaners get clogged and lose suction. The cost saving opportunity in dust bags and more reliable performance are realized by customers. All vacuum cleaners are tagged with Customer Service Support Toll free Telephone numbers that enables customers to immediately call for assistance. The sticker indicating the telephone number pasted on the product enables quick help. Continuous technology improvement in performance has given the customer satisfaction, in terms of suction power and efficient cleaning. The improvements in technology have helped customers who are allergic to dust and dirt to use the product without worries. On the other hand, HOOVER uses conventional technology of having dust bags in their vacuum cleaners. HOOVER cleaners that are fitted with conventional dust bags get clogged and reduce the suction performance. The clogged dust bags may have to be changed often depending on the amount of dust or dirt particles that goes into the bag. HOOVER cleaners have their Customer Support Helpline telephone numbers printed in their package box and Product Warranty Cards. It is totally difficult and time consuming to look for the package and the card when customers are stuck with their spoilt cleaner. 2. The Price Being premium priced As DYSON vacuum cleaners are of premium quality and continuous improvements in technology are incorporated to its products periodically, price-skimming approach can be applied. Page 23

Every DYSON product is blended with features and performance that are unique to a customer. The excellent design, robust structure and uncompromising performance have boosted the sales market. As the patented technology is applied to its product, DYSON has achieved great success in marketing because their competitors cannot duplicate the patented technology. The price skimming method can enable DYSON to recover investments made during the following period. 1. Research and Development stage of its product, and 2. Protecting Intellectual Property Patents As new products are introduced to the market, every year, price-skimming method can indeed boost the sales and increase profitability from one year to another. Comparing the price of vacuum cleaners between DYSON and HOOVER, the latter is tagged with attractive price. The price of a HOOVER vacuum cleaner is about 3 times cheaper than a DYSON. The low price has attracted more customers to but their product and has satisfied certain segment of customers. The streams of promotions and sales discounts offered during festive seasons or annual nationwide sales campaign has boosted the sales of DYSON vacuum cleaners. Hoover has also used their creativity to sell more cleaners by introducing the Gift Idea package that will attract more customers. The package consists of a cleaner and accessories that are attractively packed and meets the eye of their customers. 3. The Place How the machine is distributed DYSON has a very interesting way to place their products for distribution in Europe and across the world. The unique distribution method has their customers submit various letters and comments, expressing their satisfaction towards the service and product. The direct selling approach through e-commerce has contributed 20% to the overall sales turnover in the 2006 Financial Year. It is not surprising that this percentage is increasing throughout this year, due to the fact that a direct contact with customer is achievable. DYSON should put more emphasis to encourage their employees and customers to take part in the selling scheme which can invite more profits to the organization. The customers are also presented with state-of-the-art website where various presentations of machine configuration, features and performance are highlighted. Page 24

Customers and visitors to the website should also be allowed to post their comments and concerns regarding DYSONs products. A special page can be created to allow customers to customize the features and performance of product according to their own taste which enables greater demand. The details of Customer Support contacts are also included in the website which is operated by IT savvy gurus. The website can be upgraded to organize video conference with troubled customers who may need step-by-step assistance to resolve their product issues. The next method of distribution used by DYSON is through retailer stores, as it contributes 80% of the total sales. In the UK, Dyson has appointed a retailer store by the name of CURRYS that has been given the exclusive rights to distribute and market DYSON cleaners. CURRYS is entrusted with the task of selling DYSON vacuum cleaners and accessories. A combination of expert sales market knowledge and hard working and diligent crew members, this retail store has sold over 18 million vacuum cleaners in 2006. The business relationship with CUURYs can be further strengthened by giving product training so that they can appreciate DYSONs product and be in a better position to advise their customers. The training provided to retailers will also enhance their product marketing and promotional activities. The knowledge gained from DYSON will also help them to resolve minor technical issues when delivering the machines to customers. HOOVER does not show much enthusiastic and creativity in designing their website page to attract customers to buy their products, through the Internet. The direct selling approach through the Internet will not succeed if they do not put further emphasis to interact with their customers. HOOVERs website seem to be somehow confusing and not user friendly. There seem to be many protocols before the user can get the required information. Product information is not explained in detail and multiple protocols may confuse their customer, should there be a customized request. The photographs of cleaner models can only be viewed from the front and the outlook of the whole machine cannot be understood. 4. Promotion To encourage and help marketing Page 25

In the United Kingdom for example, the advertisements of DYSON vacuum cleaners are broadcasted throughout the day in their national television channels. The advertisements contain elements such as product design, performance characteristics and technology behind the vacuum cleaner. This information has led to purchase and try for themselves the reliability of DYSON products. The local media such as newspapers and magazines are perfect mediums for DYSON to advertise their products in terms of sales information and local events. DYSON also should hold periodical charity programs to fund various charitable organizations. The Internet is also presented with similar messages but with more breathtaking graphics and special effects details when viewing the automated product presentation. Details of machine configuration and design with full color modes will attract various customers around the world. The advertisements over the Internet should be further designed for all major countries and its languages. DYSON has also setup a team to demonstrate its products in retail stores. The people of this team are so passionate and knowledgeable about DYSON products that they make perfect DYSON demonstrators. The retail store also appreciates an extra pair of hands as well as training to their staff that is given by DYSON demonstrators. The team provides training pertaining to product demonstration to customers in order to forge closer relationship. On the other hand HOOVER does not have such a team who can help their retailers to achieve the level of product knowledge to increase their sales. HOOVER does not place importance and emphasis to train and upgrade the product knowledge of their retailers. Conclusion DYSON must put extensive efforts to market and promote its products in order to gain greater share in the vacuum cleaner industry even though it has a huge pool of talented and skillful Engineers. The Marketing Mix concept will be an ideal strategy to market vacuum cleaners and stay competitive in terms of price, technology and product reliability.

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References Dyson, James, Against The Odds (NY: Giles Goren, 1997, 2001, 2002) Leighton, Alan, On Leadership (Random House Books, 2008) Dyson, James, All About Dyson (DYSON Publications, 2004) Kotler, Philip, Marketing Management (Prentice Hall, 2008) Appendices Appendices included in this assignment serves as extra information and acts as a reading supplement to support arguments which have been indicated in this work.

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Appendices Dyson abandons plan for design school

The millionaire entrepreneur has pulled out of creating a school in Bath after the government rejected his 12.5m funding bid

Prepared by Anthea Lipsett and agencies Posted in guardian.co.uk, Wednesday 8 October 2008 09.51 BST

Inventor and industrialist James Dyson said he 'deeply regretted' having to shelve plans for the school. Photograph: Sam Frost Sir James Dyson, the millionaire vacuum inventor, has been forced to abandon his plans to set up a new school in Bath after the government rejected his funding bid. The entrepreneur hoped to open a pioneering school of design and engineering the Dyson School of Design Innovation in Bath. Through his charity, the James Dyson Foundation, he had pledged 12.5m to the 56m project that was to be joint-funded by the government. Dyson's plans have been hampered by planning and funding battles over the past four years. The most recent opposition from the Environment Agency led to the local government minister, Baroness Andrews, calling a planning inquiry into the school's proposed location on a flood plain, which Dyson estimated could cost a further 1m in fees. (Continued in Page 28) Page 28

Yesterday, Dyson said the government had now rejected his latest funding proposal, which was the final nail in the school's coffin. He said: "Faced with a planning inquiry and this government's recent rejection of our funding proposal, we have no choice but to abandon the plans for the school. "We deeply regret having to give up on the opportunity to provide an exciting education for our young people." But he said he was still determined to help young people in design education. He said: "We now intend to find another way to nurture young engineers this time on our own terms." The project, which was first welcomed by government in 2004, has been in the planning process since July 2006. In December of the same year, issues with the building design on the proposed site were raised by government, forcing a redesign, increasing costs and causing a lengthy delay. In March, the Bath and North East Somerset authority voted in favor of the planned school, despite a planning officer's report recommending the reverse, but an objection by the Environment Agency meant the application was referred to the Government Office of the South West. Proposals for the school, which could not have accepted students until 2012 at the earliest, focused on providing 14- to 19-year-olds with opportunities to do hands-on engineering projects with industry experts. Dyson was keen to have the site in Bath because it is the city where he began his engineering career with manufacturer Rotork.

Note: This news article is extracted from www.guardian.co.uk which is an online news portal

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Appendices
Samsung to pay Dyson Technology over patent dispute By: AFX | 13 Feb 2009 | 04:56 PM ET LONDON, Feb 13 (Reuters) - A British court on Friday ordered South Korean electronics company Samsung to pay British company Dyson Technology Limited a likely 590,000 pounds (US $852,600) for trying to patent the vacuum cleaner maker's triple-cyclone technology. A year ago, unlisted Dyson took Samsung to court to revoke two British patents of its three-cyclone system, which uses aerospace technology to subject vacuumed dirt to a Gforce 43,000 times that experienced by a Formula one racing driver. In a technical 60page ruling given at the end of January, Britain's High Court upheld Dyson's principal claims that it had already invented and patented the system. The judge at a cost hearing on Friday repeated that Dyson was the clear winner in the case and ordered Samsung to pay the company most of its court costs. "Samsung aped our patented technology and cynically claimed to have invented it," Dyson Chief Executive James Dyson said in a statement. "We may not be a commercial giant like Samsung, but we will vigorously defend all the technology we have worked hard to develop and protect. Today's result is a win for engineers and inventors," he said. "This ruling relates only to the validity of certain patent claims," Samsung said in a statement. "Also the ruling does not affect the supply of our products." The judge, Justice Arnold, said: "In the present case it seems to be clear that Dyson is the winner," adding the company was successful in entirely invalidating one patent and successfully attacking the part of the other patent it had intended to attack. Page 30

(Continued in Page 30)

The judge ordered Samsung Gwangju Electronics Co Limited to pay Dyson 65 percent of the roughly 900,000 pounds in costs Dyson incurred during the trial. Subject to a detailed cost assessment, this equates to 590,000 pounds (US $852,600). Arnold directed Samsung to pay an interim payment of 275,000 pounds within 21 days. Samsung, which won some patent amendments and therefore did not have to pay 100 percent of Dyson's court costs, requested and was given permission to appeal the decision.

(Reporting by Paul Lauener) ($1=.6920 Pound) Keywords: DYSONTECHNOLOGY/ (paul.lauener@reuters.com; +44 207 542 1816; Reuters Messaging: paul.lauener@thomsonreuters.com) COPYRIGHT Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

Note: THIS ARTICLE IS EXTRACTED FROM WWW.CNBC.COM

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Welcome to the Australian Design Award - James Dyson Award

"Design is not just about how something looks, but how it works. I don't see a difference between a designer and an engineer, and I don't want to see a difference. A designer should be both," James Dyson. The Australian International Design Awards, a division of Standards Australia, and Dyson Appliances (Australia) have developed an inspiring program aimed at rewarding the outstanding talent that exists amongst our future Australian designers. More about the Australian International Design Awards. Ross Cameron, Managing Director of Dyson SEA, views education in design and technology as vital to the future of Australia, both culturally and economically, and has worked with the Australian International Design Awards since 2001 to develop the Australian Design Award - James Dyson Award. Australian Design Award - James Dyson Award (ADA-JDA) highlights projects from tertiary students of design in Australia most closely aligned with Dyson's philosophy of complete design - meaning that a product should not only look good but also use innovation and technology to provide significant advantages

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over the product it replaces. More about Dyson. The ADA-JDA represents the joining of two strong brands: Australian International Design Awards - the national opinion leader of design in Australia that now sets an international benchmark of design excellence in order to make Australians more globally competitive in design practice; and Dyson - an internationally renowned innovator, brand and icon of design and technology, continually exploring new horizons in product development, design education and the wellbeing of the community.

2009 Australian Design Award - James Dyson Award

Reward your creative genius with an Australian Design Award - James Dyson Award. The Australian Design Award - James Dyson Award is calling for entries from tertiary students of design in Australia and offers a vast array of benefits to emerging young designers and educational institutions alike. More on benefits of entry.

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2008 Australian Design Award-James Dyson Award - Winners Online The top prize winners of the 2008 Australian Design Award-Dyson Student Award can be viewed here. Exhibition on now The 2008 Powerhouse Museum Selection is currently on display at the Museum's Success and Innovation gallery following its recent launch at the opening of Sydney Design 2008. Also on exhibition is a selection of finalists from the 2008 Australian Design Award - James Dyson Award. For more information, visit: www.phm.gov.au

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