Contention in an essay

Week 5: DysonDyson and the bagless vacuum cleaner: a case study1With a growth rate of 300%, the capture of more than 50% of the UK vacuum cleaner market in less than 4 years, and a new £15 million R&D facility the success of the Dyson bagless vacuum cleaner is clear. What is not so well understood is the story preceding this success. This case study challenges much of the previously accepted approach to conducting business. For example, the product in question used new technology that was initially rejected by existing manufacturers; it was priced at more than double that of existing products; virtually nothing was spent on marketing or advertising, instead, the company relied primarily on its own efforts to enlist retailers, on publicity generated by the occasional newspaper article about the product, and on word of mouth.IntroductionConventional wisdom would surely suggest that Dyson Appliances Ltd. would fail within a few months. After all it appeared to be a small company with an eccentric manager at its helm, trying to sell an overpriced product of limited appeal in a very competitive market with less expensive, conventional, mass-market products made by respected manufacturers whose names were, quite literally, household words. The result was very different. The story of the Dyson bagless vacuum cleaner is not a classic tale of “rags to riches”. The charismatic inventor James Dyson was afforded many privileges and opportunities not available to most. It is, nonetheless, a fascinating story and illustrates many of the difficulties and problems faced by small businesses and “lone inventors”; and demonstrates the determination, hard work and sacrifices necessary in order to succeed. The cliché against the odds, which Dyson used as the title of his autobiography (Dyson, 1998), is certainly appropriate and tells the story of the development and launch of the first bagless vacuum cleaner-the Dyson DC01. This case raises several significant research questions in the field of innovation management. Firstly, how and why did senior executives at leading appliance manufacturers across Europe, such as Electrolux, Bosch and Miele, decide not to utilise the technology offered to them by Dyson. Secondly, how and why did senior buyers for many retail chains across the UK fail to recognise the potential for the DC01. Thirdly, Technology Transfer experts would point out that the Dyson case is a classic case of technology transfer-a technology developed for one industry, i.e. dust extraction from sawmills, is applied to a different use in a new industry. Hence, it is technology transfer that needs to be championed and supported further by governments. Fourthly, as a mechanism for protecting intellectual property, it seems that patents depend on thedepth of your pocket. That is, they are prohibitively expensive and are almost exclusively for the benefit of large multi-national organisations. What can be done to help small businesses without such large pockets and unlimited financial resources? And finally, many commentators would argue Dyson was successful partly because he had some influential contacts that he had established-he was fortunate. But there may be 100 failed Mr Dysons, littering the business highways who did not have such contacts.How can governments try to facilitate inventors like Dyson and ensure that more innovations succeed? And thereby developing the economic base oftheir country.Reaping the rewards from technological innovation1This case has been written as a basis for class discussion rather than to illustrate effective or ineffective managerial or administrative behaviour. It has been prepared from a variety of published sources, as indicated, and from observations.
Since Dyson’s entry into the domestic appliance market two of the largest world players in the vacuum cleaner market have responded to the challenge laid down by James Dyson’s bagless vacuum cleaner, launched in the UK in 1993. Dyson now accounts for a third of all vacuum cleaner sales in the UK.In 1998 Dyson Appliances sold nearly 1.4 million units worldwide. Revenues for the year were £190 million but surprisingly net income was £29 million-15% of sales (see Table 1.1).Table 1.1The spectacular growth of DysonThe spectacular growth of DysonSales(value ofunits sold£000’s)10080600time199519961994DysonPanasonicElectroluxMieleHooverFile: cyctable2140012001004020GoblinVaxBackgroundPrior to the development of the bagless vacuum cleaner James Dyson had already demonstrated his prowess as a designer and businessman. He was responsible for the “ballbarrow”. A wheelbarrow that revolutionised that market by using a ball rather than a wheel. This was to provide the financial foundation for the development of the bagless vacuum cleaner. That particular experience taught James Dyson many lessons. One in particular is worth mentioning. The patents for the ballbarrow were owned by the company that JamesDyson helped set up. He eventually parted with this company but unfortunately lost all control of the patents as they belonged to the company and not to himself. Dyson was determined that any future patent wouldpersonally belong to him and not a company.