Dyson Company is a British technology organization established in 1991 by James Dyson in the United Kingdom (U.K.). The enterprise produces and designs household appliances, and in September 2017, James Dyson, announced their entry into the automobile manufacturing sector, particularly electronic vehicle (EV) production. This paper analyzes Dyson Limited’s business model, its capacity to generate profits from EV production, and its business-level strategy.
Dyson’s Business Model in Vacuum Cleaners
With minimal entry barriers, the vacuum cleaner (VC) market is highly competitive. Therefore, to stay ahead of the competition, Dyson invests substantially in research and development (R&D). The company also protects its product innovations with different patents to safeguard them from infringement. The enterprise also differentiates with the best services and products in the marketplace. Furthermore, it diversifies its operations through R&D investment and hiring engineers while targeting the rapidly-growing Asia-Pacific region. The organization also uses the premium pricing strategy as a competitive advantage against its rivals.
Dyson Limited’s Capacity to Generate Profits from Electric Vehicles (EV)
Dyson Limited can generate significant profits from EVs due to several reasons. First, the firm acquired Sakti3, an American company specializing in manufacturing Lithium-ion and solid-state batteries used in driving EV engines. Second, Dyson recently filed a patent in the U.K. to safeguard an undesignated battery device’s intellectual property entitlement (Shipilov et al., 2019). Third, the company’s employees, particularly their engineers have solid skills and experience in developing self-driving innovations, a primary EV component. Fourth, the company’s first EV plant’s physical location may also help enhance its profitability. The strategies listed above would help increase Dyson’s profitability by reducing production costs and increasing sales revenues, turnover, productivity, and efficiency.
- Value: Per the given case study, Dyson Limited manufactures VC product brands and related services with distinctive value for their consumers. Although slightly expensive compared to their competitors’ price offerings, these gadgets, for instance, the 360 Eye RBC, are produced using up-to-date technologies designed and developed by their engineers to meet their customers’ AI needs. Therefore, Dyson attempts to add value to its clients through its products’ quality.
- Rarity: Dyson’s innovative strategies incorporated into their products’ development are rare for its rivals to easily duplicate. The company’s chairman and owner’s knowledge in developing and applying art in the engineering procedure is also a rare trait untypical among personalities within this management level. Furthermore, their innovative technologies integrated into its VC manufacturing procedures and services rendered to its consumers gives the company a robust strategic capability over its rivals.
- Imitability: Rivals cannot easily imitate Dyson Limited’s products due to the patients on their commodities. The company’s product innovations are safeguarded using different patents – with approximately 7,500 international patents to his name, James spends more than $6.5 million annually on litigation (Shipilov et al., 2019).
- Organization: The company has an innovative culture and a flat organizational structure that typically elevates workers’ responsibility levels. Furthermore, its structure enhances communication and coordination among employees and fosters its workforce’s decision-making process. Its procedures and policies promote its products’ safety and quality through patents and its value chain.
From the above analysis, Dyson could transfer the following resources from VC to EV: innovative product designing and manufacturing processes, patency, and its organized management system, culture, structures, and processes to capitalize on capabilities and resources.
Dyson’s business-level strategy can best be described as a differentiation strategy. Dyson developed the conception for a Dyson demo shop in Paris to allow prospective buyers to test and purchase VCs directly. The developed standalone stores elevated the company’s brand awareness, which, in turn, boosted VC sales within the firm’s conventional distribution network. The company also began selling its products directly to consumers online; this approach differentiated the enterprise from its rivals. After-sales services represent another differentiating strategy adopted by Dyson. The organization’s innovative strategies also target its consumers’ technology-driven and fast-changing behavior.
Based on the provided case study, it is evident that Dyson’s ambition is to manufacture quality products in every product range it launches. With minimal entry barriers, the vacuum cleaner market is highly competitive. Therefore, to stay ahead of the competition, Dyson invests substantially in research and development (R&D), patency, product and service differentiation, branding, and diversification. Dyson can generate significant profits from EVs due to its strategic location, acquisition strategies, and skilled personnel.
Shipilov, A. V., Zemsky, P., & Henry, B. (2019). Dyson Ltd: From vacuum cleaners to electric vehicles. Case Center. Web.