This assignment is based upon the Case Example 'Inside Dyson': a distinctive company?. Read the case and then answer the following questions;
1. Identify and analyse the strategic capabilities of Dyson using analytical frameworks covered within the chapter.
2. To what extent could any of the capabilities you have identified be imitated by competitors, explaining the reasons for your view.
3. What are the capabilities that have provided Dyson with competitive advantage, and how?
4. Using the concepts of sustainability and dynamic capabilities, how would you manage these capabilities given new entrants and the changing nature of Dyson?
Identification and Analysis of Dyson’s Strategic Capabilities
The strategic capabilities refer to the organisational capabilities that contribute to the long term survival or the organisation’s competitive advantage. The factors which contribute to the strategic capabilities include rarity, value, inimitability and finally non-substitutability. These also provide a potential competitive advantage in case of a market which helps an organisation reach acceptable levels of return. The target of the company is to solve the problem and also to improve the products. The best thing about Dyson Company is that the consumers of the company can get a specific designed product with better functionality than the traditional product.
In certain cases though several competitors exist that provide products that are cheaper in comparison to the Dyson products but the company has a reputation of providing good quality as well as a special product design to the customer and in very rare cases are the products delivered, any possibility of suspicion is not there. There always remains a possibility of imitation of Dyson products. It is hard to do it because there are many patents of the products, in very rare cases the unique designs can be copied. The major amount of investments helped Dyson become a producer of inimitable products (Vogel and Güttel 2013).
In very rare cases, if it is possible to imitate the products of Dyson, the brand name, the loyalty as well as the customer base cannot be imitated. The brand name also cannot be substituted as the company has been in business for long and it is the biggest advantage of Dyson. The inclusion of the great and unique quality products in the Company’s portfolio is also beneficial for the company.
In case of Dyson, the attention paid by James Dyson, the founder to the engineering and design, fashion show conductions, as well as funding the design school contributed to innovation. Dyson’s strategic capacities constitute a resource-based view of the strategy, huge amount of time devoted to the formulation and engineering of prototypes for household devices in order to give a twist to the normal devices. This sort of innovation creates a niche in the over-saturated market. These unique facilities, along with the state-of-the-art designs, sleek designs as also the bright, colourful exteriors help Dyson gain a competitive advantage. Several number of high end devices, well in demand are created by Dyson. The company uses Chinese and Asian manufacturing largely due to the fact that it desires to make its products cheaper in order to maintain the profit margin benchmarks. The company sells its products to the respective target market at higher prices in order to gain profits as well. The company also hires people who are creative as well as courageous, and also fresh thinkers under all situations.
Extent to which the capabilities at Dyson could be imitated by competitors
The new, radically changed products manufactured by the company have the capability of standing in any market. The inimitable competencies of the company also make it extremely important in the potential market and give it an edge above its competitors. The ideas and hence the characteristics are distinctive and involves many new products as well (West, Ford and Ibrahim 2015).
It is almost impossible for competitors to imitate the products of Dyson. The main niche is the distinctive design as it is the main life blood of the Dyson Company. There are engineers faithful to the company who have created 100s and even 1000s prototypes in order to prove beneficial for the company. This is also done to ensure that the best of products are provided to the customers. There are a large number of specialists and engineers who focus only on the design and innovation of the customers. Huge amount of investments are spend on the innovative products. Much amount of money is spent on the research and development of new products as well. The engineering team was also doubled to facilitate the product creation and manufacture. The huge investment of the company has led to the success and great turnover of the company. The profits for the company doubled due to the implementation of new policies and the innovations in the design (Barney 2012).
One of the main reasons that the capabilities of the Dyson Company cannot be imitated by its competitors is the possession of the special patent. These patents provide significant amount of protection from the competitors of the company. The company pays a considerable amount of fees in order to renew the patents each year in order to ensure protection. This is because the ideas tend to be easily imitated by other companies or competitors in case the ideas lack the patent protection. In cases where companies try to copy the Dyson patents, the company can take action against them. The rights related to the patents as well as organisational properties lead Dyson to protect its ideas and use unique products without any fear of misuse.
The company’s focus on innovation helps them to try to change the way in which the vacuum for other appliances are utilized or designed. Customers are attracted to the Company due to their level of specialisation. Only companies with superior prowess in engineering can actually challenge the Company. Thus it can be said that the patents of their products leads them to stay protected from the outright stealing by other companies.
The capabilities providing Dyson with competitive advantage
Dyson possesses competitive advantage over its existing competitors due to the concept of closed innovation. Open innovation involves both external as well as internal contribution. On the other hand, closed innovation comprises solely the internal workforce. The Dyson Company is extremely secretive with the concept of development and research and this gives them an advantage of always remaining ahead of their competitors. It can clearly be said that the closed innovation strategy has been extremely successful for Dyson. Dyson possesses great competitive advantage as almost all the characteristics work in their favour. The uniqueness of their products is responsible for keeping them ahead in the market and it is feasible that they carry on with their innovative strategies as it is bound to benefit them and always keep them ahead of their competitors. Another reason for competitive advantage because the business follows the differentiation strategy including the major focus on the product design engineering. All major possibilities of competitive rivalry have been cancelled out by the company (Joyce and Slocum 2012). The organisation has started branching out into different markets such as the hand dryer, kitchen markets as well as fans. The approach of creating better versions of products already available in the market has also been helpful. They have also differentiated them by the technology as well as the designs. The competitive rivalry is a minimised state as high level innovative capabilities are possessed by the company. The competitive advantage is attained by providing consumers greater value either through lower prices, or by offering extra benefits. The competitive advantages and the differences in the performance of the firm are strongly connected to the company’s resources as well as how they are balanced. The company should focus on the strength of its brand as well as maintain its image in order to sustain competitive advantage (Theodosiou, Kehagias and Katsikea 2012).
Dynamic capability is basically the capability of the firm to build, integrate and reconsider the internal as well as external competencies in order to look for the rapidly changing environments. The dynamic capacities refer to the capability of an organisation to purposefully create, modify or extend its resource base (Abrams et al. 2012).
Sustainability corresponds to the concept of being diverse and productive. It also corresponds to the concept of maintaining a balancing act. This is because the sustainable development corresponds to meets the requirements of the present without compromising the needs or requirements of the coming generations (Pugh 2014).
The basic assumption that needs to be kept in mind while addressing dynamic capabilities is that the core competencies need to utilised in modifying the short term competitive positions utilized to build long term competitive advantage. It is challenging for companies in highly dynamic markets to apply and align their resources for the creation of sustainable competitive advantage. The strategic advantages and the capabilities need to be utilized properly to manage with the changing times. Design-driven strategies need to be employed in order to develop new products, as depending on the existing trends in the previous market will not lead to accurate results. Other possible avenues are to be viewed in order to succeed with the changing times. Newer and more innovative technologies need to be adopted in order to prosper. The company needs to focus on the innovative strategies in order to succeed in the future. More engineers need to be employed in order to contribute to the increased innovation of the Company. The engineers who are responsible for the innovative and unique ideas of the company that contribute to the brand image should be retained.
For maintaining a position in the global market and remain undeterred by the changing times, the company should focus on the innovative design policies and their proper implementation.
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