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Section-2: Inside Dyson: A Distinctive Company

2.1. Case Summary

The case has focussed the Dyson Companys strategic capabilities, its strong culture for innovativeness and support of its owner for creativity in design, manufacturing and engineering of its products.

2.2. Strategic Capabilities of Dyson

According to the Kaplan and Norton (2004) the strategic capabilities means the combination of expertise, skills, techniques, resources, capacities, any innovative strategies etc. which helps a company to achieve competitiveness through out performing its competitors and sustain its growth and profits. Iconic leadership of the company is the strategic capability for the company as company wide decisions are influenced by his vision of creativity and innovation. Private ownership and no risk of losing share prices etc. Distinctive value chain, distribution channels and its premium innovative and creative products are the source of strategic capability for the company Lower cost strategy of the company is evident that company sells its products in over forty six countries covering larger markets e.g. USA, China and Japan while having its manufacturing plant in Malaysia (lower cost destination) and China to achieve low cost product development advantage to boost profits and growth and to offer low prices. Company has positioned its brands as colourful, innovative, sleek in design and robust. It uses a resource based strategy, focussing manufacturing, design and engineering of the product. Company has developed former culture from its founders i.e. promotion of innovation through encouraging distinctive, creative and innovative ideas. It has embedded innovation into its culture.

Half of the profits of the company are spent on its R&D and innovations (it quadrupled investments during 2004-2009 in R&D), engineers and other corporate people remain engage in making prototypes, thinking about bringing innovation, testing them, breaking and questioning and transforming them into real products.

Company has patented its engineering designs and processes for its products. It does not sub contract its designs to avoid infringement of its designs and patents. The company uses corporate advertising featuring the owner into advertisements to help instil the trust into the customers. Company recruits fresh engineers and scientists with innovative ideas, for the company experience does not matter, what matters is the creativity and innovativeness.

However focussing on innovation does not mean that company should forget products performance rather a need analysis of the customers must be held before bringing any innovation in the market so that to enhance the acceptance of the product and to boost sales

Experimental nature of the products can also intensify the risks level as too much is spent on making prototypes and doing experiments.

2.3. Probability of Imitation by Competitors

Company follows high secrecy policies e.g. patented products and technologies, private buildings with limited entry for the corporate highly trustable personnel only. Thumb prints are required to enter the buildings and sound proof systems have been adjusted to absorb sounds and voices for privacy and secrecy purposes. However success of the company lies in its strategies for promoting innovation in design and engineering, this capability of the company is very difficult to imitate but not impossible.

2.3.1. Design and Engineering Technology

Company has patented its products and have high secrecy inside the manufacturing plants e.g. sound proof systems etc. this is why it is very difficult for the competitors to imitate the design or engineering of the product, however competitors can make same

shapes in distinctive colours, similar functional products using some other technology with varying prices, durability and performance capability.

2.3.2 Cost efficiency

It is very easy to achieve cost efficiency for any company by following low cost business models or by shifting manufacturing sites on a low cost manufacturing destination or by adapting such a technology which can help achieving the economies of scale production.

2.3.3 Human resources

Human skills and expertise are the things which can never be imitated because it is difficult to instil same skills in human resources. Other companies can hire competitive people with distinctive skills which can help them to compete Dyson better way. However the factors e.g. capabilities in Dysons value chain still can not be imitated by its rivals.

2.4. Threshold Capabilities

These strategic capabilities of the company may become threshold capabilities in future: Its dedicated strategy towards the innovation in design, engineering, manufacturing and human resources. Strategy of spending or investing in its R&D and continuous improvement. Charisma of high value features and functions of its products. Potency of its engineering designs (Michael et al., 2010). Patenting of its every product design and style Its cost efficiency, operational efficiency and competitiveness

2.5. Importance of Sir James Dyson for the Company

Sir James Dyson is the founder of the company. His exemplary leadership style has made him an iconic leader. He set a strong organisational culture to promote innovation which was even followed in his absence as a CEO of the company.

He is featured in corporate advertisements to instil confidence into the customers to buy the companys products, thus his importance for the company is crucial.

The product design, engineering, functioning of the organisation to bring creativity and innovation and strategic decision making regarding the finalised product involves Sir James Dysons creativity and vision.

Though the company has operated well even in absence of Sir James Dyson following his strategic thinking and concerns for innovation and creativeness, however the company will not survive competitively longer in his absence because of absence of direction of innovation provided by visions and strategic decisions of Sir James Dyson.

Sir James Dyson has not win the trust of organisational people only being a leader, but the customers of the company buy its products because of their trust on the president of the company.

If the company is sold to some other company then customers may lose their confidence in buying its products, because they translate each of its brands as Dysons brands.

Sir James Dyson himself is the creator and innovator of many product designs and engineering patterns. Thus his absence may prove to be a loss of reputation of the company, decline in sales and profit volume, overcome of a competitor to replace the companys position in the market.

Sir James Dysons absence may require a lot of marketing efforts, strategic efforts and changes to sustain the growth of the company and the trust of the customers.