MBA Business Administration Specialization in Marketing

MBAME 1/12

Operational Management
Assignment Two

Group Member ID No.

1. Eden Endashaw UU81445E

2. Etsehiwot Diribssa UU81549E
3. Sosina Tesfaye UU81532E
4. Tsegerda Mekonnen UU81473E
5. Tizita Melesse UU81468E
6. Yeshimebet Birhan UU81411E

Submitted To - Dr. Solomon Getachew

January, 2022
Addis Ababa
2. Spangler, Hoover and Dyson

In 1907 a janitor called Murray Spangler put together a pillowcase, a fan, an old biscuit tin and a broom
handle. It was the world’s first vacuum cleaner. One year later he sold his patented idea to William Hoover
whose company went on to dominate the vacuum cleaner market for decades, especially in its United
States homeland. Yet between 2002 and 2005 Hoover’s market share dropped from 36 per cent to 13.5
per cent. Why? Because a futuristic looking and comparatively expensive rival product, the Dyson
vacuum cleaner, had jumped from nothing to over 20 per cent of the market. In fact, the Dyson product
dates back to 1978 when James Dyson noticed how the air filter in the sprayfinishing room of a company
where he had been working was constantly clogging with powder particles (just like a vacuum cleaner
bag clogs with dust). So he designed and built an industrial cyclone tower, which removed the powder
particles by exerting centrifugal forces. The question intriguing him was, could the same principle work
in a domestic vacuum cleaner? Five years and 5,000 prototypes later he had a working design, since
praised for its ‘uniqueness and functionality’. However, existing vacuum cleaner manufacturers were not
as impressed – two rejected the design outright. So Dyson started making his new design himself. Within
a few years Dyson cleaners were, in the UK, outselling the rivals who had once rejected them. The
aesthetics and functionality of the design help to keep sales growing in spite of a higher retail price. To
Dyson, good ‘is about looking at everyday things with new eyes and working out how they can be made
better. It’s about challenging existing technology’. Dyson scientists were determined to challenge even
their own technology and create vacuum cleaners with even higher suction. So they set to work
developing an entirely new type of cyclone system. They discovered that a smaller-diameter cyclone
gives greater centrifugal force. So they developed a way of getting 45 per cent more suction than a Dual
Cyclone and removing more dust by dividing the air into eight smaller cyclones. This advanced
technology was then incorporated into the new products.

Case Questions
1. What was Spangler’s mistake?
2. What do you think makes ‘good design’ in markets such as the domestic appliances
market?
3. Why do you think two major vacuum cleaner manufacturers rejected Dyson’s ideas?
4. How did design make Dyson a success?
 Answer

Q1- What was Spangler’s mistake?

Clearly, it was failing to understand the implications of his preliminary design. The spark of
creative genius was there but not the ability to fully understand the design’s implications or its
commercial potential. Had it been, we could be still be talking about ‘spanglering’ the carpet.

The worst mistake

Dyson, who had invented the bag-free vacuum cleaner, had never intended to set up a vacuum-
cleaner manufacturing company. He spent a decade trying to sell his idea to other vacuum-cleaner
makers, but nobody bit, because they wanted to keep making their bags.

Hoover, as is the way with old, established companies with practically monopolistic status, made
a lot of mistakes in its route to rock-bottom. But the worst mistake was an unwillingness to reinvent
itself. Dyson's technology changed the market of vacuum cleaners and Hoover should have leaped
forward, adopted the idea and presented innovative products. But because of its giant share of the
market, its managers had no desire or ability to go to war. They figured it was a blip, that they
could continue milking the market for years to come. They were wrong.

Q2-What do you think makes ‘good design’ in markets such as the domestic appliance
market?

Three things: -

• Aesthetics: The product must look good and reflect the brand value.
• Usability: The product must be easy to use and work well.
• Produce ability: The product must be easy to make, or at least not so difficult that costs and
quality are compromised.
Q-3 Why do you think the two major vacuum cleaner manufacturers rejected Dyson’s ideas?

It depends how charitable you want to be to them. If we are being charitable, one could say that
Dyson’s design represented too much of a risk for the established manufacturers. They would be
threatening their own existing products and forgoing the revenue they gained from selling the
cleaner bags, for a design which had not been proven in the market place. A less charitable view
would be that they were simply conservative, had little imagination, and did not understand the
need for innovation. Nor did they understand how a better product, alternatively positioned in the
market to stress design and performance, could undermine their existing market position.

Q4-How did design make Dyson a success?

By systematically challenging the assumptions behind current product orthodoxy. Dyson’s design
brought together concepts that were not totally original but integrated them and used them in a
new context. The ability to do that successfully (and the perseverance) are often far more valuable
than pure creative originality. The process of design is essentially about systematically bringing
together ideas and subjecting to a critical process.