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 tell good review about the product. Dyson officially entered Korean vacuum cleaner market only six months ago. However, some Korean consumers were already purchasing Dyson’s vacuum cleaner from few years ago because they were either recommended by consumers in Japan or they heard about the buzz in Japan. Word of mouth strategy could be more effective if Dyson rewards the consumer who writes review about their products online with a small gift or have special promotions in stores.
The latest hit in the vacuum market is steam cleaner and robot cleaner. Steam cleaner is similar to original vacuum cleaner but it uses hot water to produce steam for cleaning. This is especially popular in Asian countries because it is very silent and the cleaner can be used in any places including mattress, window, etc. Robot cleaner is time saving and convenient, so robot cleaners will have about 6 percent of the vacuum cleaning market by 2010. With many new technologies introduced, being bagless does not attract consumers anymore. Dyson really needs to come up with more innovative technologies if they would want increase their market share. A vacuum cleaner that sucks in all the dust, but can be changed to many different modes including wiping, waxing, emitting ions, and disinfecting with steam will be an example.
Dyson could set up a strategic alliance with high brands in other industry. Ken Okuyama, automobile designer who designed Ferrari Rossa, once said that he is inspired by Dyson and truly respects James Dyson. Dyson could take this opportunity to set up strategic alliance with companies such as Ferrari to create big buzz in the market and also higher their brand image at the same time. Many vacuum cleaners buyers’ are women, but due to its high price, many married couple go vacuum cleaner shopping together and discuss about the purchasing. In many vacuum cleaner reviews, surprising number of men are involved in the process of buying...