Dyson Vacuum Cleaner Case Analysis
Case overview
Dyson is the world’s leading company in vacuum cleaner industry with its strength in technology and innovation. James Dyson, the creator of Dyson Company, introduced innovative vacuum cleaner which eliminated the need for both bag and filter. However, as big vacuum cleaner manufactures refused to license for his technology, Dyson decided to develop his own manufacturing company. Luckily Dyson was able to sign a deal with Japanese company, which funded him in research and development. Dyson was able to continue developing his innovation of new models and ideas in this matured vacuum cleaner industry and got steady increase of market share worldwide. In recent years, Dyson is expanding into washing machine industry with new technology called “contrarotator” and with catchy design. Although the first washing machine model was not a great success, Dyson continues to invest greatly in research in development to differentiate themselves from their competitors.
Problem and opportunity
Vacuum cleaner market is already matured and the demand is derived mainly from replacement purchases at the end of the product cycle of 8 years. In unsaturated markets, demands for vacuum cleaners are very low due to national preferences for floor tiles rather than carpets. Differentiation is the key in saturated markets, but Dyson’s unique bagless technology is imitated by other manufacturers with lower price. Therefore, Dyson need to come up with new ways to differentiate themselves.
Dyson could expand their shares in countries using floor tiles by continuing word of mouth marketing strategy. Currently, China and India are not high in demand for vacuum cleaners, but with their economies growing 10% per year, more consumers will become affordable and demand soon will grow. Although most Japanese houses are made from tiles, Dyson shows strong sales in Japan compared its competitors. This is because despite its high price, consumers who have used Dyson’s vacuum cleaner
Dyson is the world’s leading company in vacuum cleaner industry with its strength in technology and innovation. James Dyson, the creator of Dyson Company, introduced innovative vacuum cleaner which eliminated the need for both bag and filter. However, as big vacuum cleaner manufactures refused to license for his technology, Dyson decided to develop his own manufacturing company. Luckily Dyson was able to sign a deal with Japanese company, which funded him in research and development. Dyson was able to continue developing his innovation of new models and ideas in this matured vacuum cleaner industry and got steady increase of market share worldwide. In recent years, Dyson is expanding into washing machine industry with new technology called “contrarotator” and with catchy design. Although the first washing machine model was not a great success, Dyson continues to invest greatly in research in development to differentiate themselves from their competitors.
Problem and opportunity
Vacuum cleaner market is already matured and the demand is derived mainly from replacement purchases at the end of the product cycle of 8 years. In unsaturated markets, demands for vacuum cleaners are very low due to national preferences for floor tiles rather than carpets. Differentiation is the key in saturated markets, but Dyson’s unique bagless technology is imitated by other manufacturers with lower price. Therefore, Dyson need to come up with new ways to differentiate themselves.
Dyson could expand their shares in countries using floor tiles by continuing word of mouth marketing strategy. Currently, China and India are not high in demand for vacuum cleaners, but with their economies growing 10% per year, more consumers will become affordable and demand soon will grow. Although most Japanese houses are made from tiles, Dyson shows strong sales in Japan compared its competitors. This is because despite its high price, consumers who have used Dyson’s vacuum cleaner