Analysis of how Dyson manages innovation. Coursework

INNOVATION AT DYSON LIMITED
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Innovation at Dyson Limited
Introduction
Dyson Ltd is a British technology company founded in 1991 by Sir James Dyson. The company designs and manufactures domestic appliances including vacuum cleaners, air purifiers, hair dryers, bladeless fans, and heaters. The firm boosts of over 12,000 employees operating in their subsidiaries around the world. It has performed consistently well as indicated in its revenues and net income. In 2018, its revenue was £4.4 billion with a net income of £1.1 billion (Holst 2020). The company has offices in the UK, Malaysia, and Singapore. Since its establishment, the company has always made its vacuum cleaners and washing machines in Amesbury Wiltshire. However, after 2002, the company transferred its production to Malaysia. The company has continued to explore other ways of reducing its operation costs to maximize its profitability. The company operated in Malaysia for 10 years and in 2013, it launched a $360 million plant in Tuas with an ability to produce up to 4 million digital motors annually (E&T editorial Staff, 2018). In January 2019, the company announced plans to move its headquarters to Singapore, being its fastest growing market. The company has been very strategic in making its decisions. All of the actions are carefully planned and calculated to ensure that it captures the market and remains to be the market leader in whatever country it venture.
Industry Analysis
The UK household appliance operators deal with the distribution of household equipment that include laundry appliances, cooking equipment and television sets among others. Because of the dependence of the sector on the downstream retail industry, the UK consumers and the general economic status are the major determinants of the trends within the industry. While the sector is relatively stable, the weak housing market in the last five years running through 2019-2020 saw the revenue reduce at a compound annual rate of 0.95 to £12.3 billion (IBISWorld, 2020). The housing market directly affects the market demand for the household appliances and hence the trend of the sector in the coming years will also play a key role in determining the trend in the sales of household appliances. On a global scale, the household appliance sector is expected to grow for the next five years. This growth is attributed to the stabilization of housing prices as a result of the projected stability in economy. Product innovation and advancement are likely to increase and lead to portfolio extension and product premiumization (Maida 2019).with the stabilization of housing prices and the economy, the only possible disruption is likely to occur from the high competition among the manufacturers of home appliances, which will be fueled by technological advances and the changing consumer preferences. Some of the expected changes as a result of innovation that is likely to disrupt the industry includes introduction of some improved features, better designs and performance.
According Technavio, the projected increased adoption of the more advanced products will have a positive impact on the market and lead to growth. To counter the projected increase in demand for household appliances, companies are becoming more creative in an effort to remain competitive. All these innovations are geared towards capturing the consumers’ attention, expanding the customer base, and increasing the demand for their products. The increase in demand of products with such specific features will compel other companies to adopt such designs. For example, an innovation such as a multi-cooker provides several benefits that include cooking, steaming, and frying. Similarly, the changing demands have seen the evolution of automatic washing machines to incorporate dryers. These products will be designed to meet specific demands and enhance convenience and thus will be the major disruptors of the market. Besides, with the increasing adoption of technology, the market will tend to shift towards smart household appliances for further convenience. Therefore, as the economy and hence the housing markets are projected to stabilize in the near future, the two main disruptors of the market will be the ability to create multifunctional products and the incorporation of technology. Consumers will opt for appliances that can be reused in other areas to save costs and time, and will also prefer appliances that they can control remotely for convenience. Thus, Dyson Ltd. should drive its innovation efforts towards increasing the functionality of their products and making them easier to control.
Portfolio Analysis
Dyson ltd manufactures a wide range of home appliances that include air purifiers, filters fans, heaters, lighting, hand dryers, vacuum cleaners, and hair stylers. Its first product was a dual-cyclone vacuum build in 1991 under the Dyson name, the DA 001, which was produced by Phillips Plastics (WORLDKINGS, 2020). However, two years later, the quality concerns that came up and the desire by Phillips to renegotiate the terms of contract led to the end of the agreement. Two months after severing the agreement with Phillips, Doyson established a new supply chain and constructed a new production center in Chippenham, Wiltshire, England. Another vacuum clear was manufactured under the new facility, which replaced the DA 001 and was called DC01. Market research at the time showed that people did not prefer transparent containers because of dust. However, Doyson decided to go against the expectations by introducing a transparent vacuum to the market. The appliance became the biggest selling vacuum cleaner in the UK. This approach to production showed that Doyson focuses on exploration. Doyson knew well that the market was not favorable for a transparent vacuum but went ahead to design one. Thus, it did not focus on the immediate environment, which is a characteristic of exploitation, but focuses on the future as adoption of transparent vacuums was a possibility for the future. The company then adopted an exploitation model in designing subsequent vacuum cleaners that included the DC02 Absolute, DC02 De Still, DC05, DC04, DC04 Zorbster (WORLDKINGS, 2020). All these models are revisions of the previous model, which implies that the company was taking advantage or exploiting the popularity of the original popular model to design newer products that will be more appealing to the market. The company then shifted back to its exploration model in the manufacture of DC07, which used the “Root Cyclone” technology that featured seven cyclone funnels instead of two that was synonymous with the original cyclone design. Using the same exploratory model, the company ventured into other technologies in 2009 that included the AirBlade hand dryer, the Air Multiplier “bladeless” fan and the “bladeless” fan heater (Heining 2009). 2019 saw the company release the Pure Cryptomic with an ability to eliminate formaldehyde, an air pollutant that is a flammable and colorless gas. The gas irritates the eyes, skin and the nose.
Dyson comes across as a company that uses hardware industrial design as its key competitive advantage. While the fast changing technology has compelled the company to venture into software engineering that is more complex. It relies on various software technologies such as the vision systems people, the artificial intelligence people and the robotics (Frommer, 2018). Currently, the company has invested extensively in its software department to cope with the dynamic technology world. It operates by selectively identifying technologies that are the most important to the people and ones that can make a difference. It then buys into the technology and directs others into the new innovations. Besides venturing into new technologies that have not been explored, the company also unexpectedly hires people with little to no experience (Frommer, 2018). Dyson, during his talk with Recode, notes that he exclusively hires graduate and undergraduates who have no experience as he finds working with people without experience to be more exciting that those with experience. Such an approach to recruitment is odd as most companies prefer recruiting people with experience to boost their innovativeness and chances of survival. Most companies believe that people with experience are better placed at contributing to the company success. However, Dyson, once again, applies the exploratory strategy by venturing into territories that others regard as risky. Drawing from its ventures into new unutilized technologies to recruitment of staff with little experience, Dyson employs a proactive innovation strategy (Dodgson, Gann, & Salter 2008). In this type of strategy, the company is strongly oriented towards research and has a first-mover advantage. It has access to a broad range of sources and takes high risks for high returns. Investing in technology that has not been proven is a high risk exercise. Similarly bestowing trust in individuals with no experience risks the company’s ability to compete in the highly competitive home appliances sector. In return, the company gains in terms of its brand name as pioneering in certain areas of technology gives the company exclusive rights towards the new technology.
Organizational Analysis
Dyson ltd mainly focuses on innovation and developing improved technologies that serve the needs of the consumers. The company distributes its products from its factory in Malaysia to the international markets. Its main competitive advantage lies in its microbiological laboratory with vacuum market. The firm uses the laboratory to test and produce vacuums with a potential to capture .05 microns and allergens. The company has managed to apply five major strategies with each of its new productions. These include the all-floor purpose vacuum cleaners, the best suction within all price points and class, expels cleaner air, 5 year warranty, and no additional costs following a purchase. Amid the success, the company also faces critical internal issues that threaten to interfere with the manufacture of its increasingly sophisticated machines. As evident in its development of the DC15, the company’s culture and philosophy is closely associated with its c...