The reported study has been developed to analyse the strategic management analysis of Dyson Ltd in Asian markets. By identifying the operational target for the Asian markets, the research has provided the business goals and objectives of Dyson Ltd. Notably, in the Asian operating markets, the internal and external environmental analysis has been provided in the study. In the external analysis, PESTLE analysis and Porter’s Five Forces Model have been described to draw the competitive advantage of the firm in the target market. The entire strategic paper has developed based on Mintzberg basic design school Model (Rotha?rmel, 2017). Alternatively, the internal environmental analysis of Dyson Ltd includes generic value chain, VRIO Framework, and generic strategies defining the internal resources, capabilities, and core competencies of business leading towards growth and competitive advantage in the target market.
Moreover, the strategic management analysis of Dyson Ltd will investigate the advantages in targeted Asian markets. Leading to strategic analysis, a Balanced Scorecard to work has been developed complementing the financial indicators, performance measures, and innovative business activities. Added to that, a risk management plan has been illustrated in the strategic paper that can be utilised in case of risk mitigation scenario. Through strategic evaluation, a new strategic plan for Dyson Ltd in Asian market has been defined in the study as well. At the end of the paper, a set of recommendation has been added to identify the final strategy effective for the business structure in the target market.
Dyson Ltd is one of the leading technology organisations in the global market that was founded in 1991 by James Dyson. Currently, the electronic product manufacturing and designing firm has developed vacuum cleaners, hand blenders, heaters, and hand dryers, etc (Dyson.co.uk, 2017). In the contemporary market scenario of electronic product manufacturing and marketing industry, Dyson Ltd has emerged as one of the leading electronic product manufacturers in the UK market developing the latest and innovative small electronic products. The product category of Dyson Ltd has mainly included handy electronic products suitable for the target audience.
Dyson Ltd’s business purpose is somewhat different to that of modern publicly traded electronic manufacturing firms. In most of the cases, the companies are targeted to secure maximum profitability establishing the leading business goal. Alternately, Dyson Ltd, a private owned electronic products manufacturer and marketer, has concentrated on long-run business sustainability following the market trend of innovative electronic device manufacturing (The Mark of a Leader, 2017). Currently, the company has held 20 percent of entire electronic market share in the UK market and targeted to expand the business in the Asian market as well. Precisely, the overall business goal of the organisation is to influence the lifestyle of target demographics by offering them quality electronic products at affordable pricing.
Mission and Vision
The mission of Dyson Ltd is to sell innovative technology-oriented high quality electronic appliances at reasonable pricing to establish business in the Asian countries to get substantial amount of competitive edge over the rivals. By following the existing trend in the market, Dyson Ltd has expected to grow further in the Asian markets. On the other hand, the vision of the company is to provide marketing growth by delivering cost-effective and sustainable products based on consumer’s demand (Dyson.co.uk, 2017). By focusing on manufacturing small electronic appliances, Dyson Ltd can create a massive target audience in the Asian markets that include countries such as Japan, Singapore, India, Malaysia, Indonesia, and Bangladesh, etc.
External Environmental Analysis
The PESTEL analysis of the Asian market for Dyson Ltd has been presented herein below:
- Political Factors:The political instability in the Asian market will influence the business of Dyson Ltd. The changing international policies related to overseas trade makes it difficult for the firm to carry on its operations with its current strategies in the Asian market (Kachani and Shmatov, 2010). On the other hand, the event of Brexit has made it important for the firm to focus on the Asian markets for the international expansion of its businesses.
- Economic Factors:The faster growth rate of the GDP of the emerging nations in Asia provides potential opportunities to Dyson to enhance its revenue in the overseas market. On the other hand, the high demand for its products in the Chinese and Japanese market tends the company to increase its production in the upcoming year.
- Socio-cultural Factors:The increasing population in the Asian market will increase the demand for the products of Dyson. On the other hand, the presence of multi-cultural population with a trend for technology acts as opportunity for the business to grow in the Asian market (Kachani and Shmatov, 2010).
- Technological Factors:Dyson has its manufacturing sites in Singapore, which is a base for several multinational companies due to its developing infrastructure. On the other hand, the development of technology in the Asian countries provides potential opportunity to the company to expand its business in the Asian market (Sethna, Jones and Harrigan, 2013).
- Environmental Factors:The increase concern among the people regarding environment has led to the introduction of several rules and regulations. The company needs to obey the standards of the local governments in order to operate in the Asian market. For example, the products must be made of recyclable materials and follow all environmental laws. On the other hand, the products must be energy efficient to get approval of the government.
- Legal Factors:With the development of globalisation, the international trade regulations have changed that works in the favour of Dyson Ltd. On the other hand, the company must take care of the Patent law to copyright its products.
Porter’s Five Force Analysis
The Porter’s Five Force Analysis has been conducted to explain the market factors that influence the business of Dyson in the Asian market:
- Buyer’s Bargaining Power:The bargaining power of the buyers is high due to the availability of substitute products and huge number of firms that deals with electronic products in the Asian market.
- Supplier’s Bargaining Power:The bargaining power of the suppliers is moderate due to the availability of few numbers of suppliers dealing with the raw materials that are required by the firm. Hence, the company can shift from one supplier to another to carry on with its current operations in the Asian market (Linton and Solomon, 2017).
- Threats from Substitution:There are a huge number of substitute products of different brands in the Asian market that are easily available at a lower price (Zhang and Kallesen, 2008). Hence, the threat from substitution is high for the Dyson’s products in the Asian market.
- Threats from Rivalry:The number of organisations dealing with technological products is quite high in the Asian market. For example, Hoover, Electrolux, Miele, Havells, and several other international firms provide a high level of competition to Dyson. On the other hand, Dyson faces a high level of competition from the local brands as well. Hence, the threat from rivalry is high for Dyson Ltd in the Asian market (Asad, 2015).
- Threats from New Entrants:It is quite difficult for a new organisation to enter the electronic goods market due to the need of high level of investments. Hence, the threat from new entrants is relatively low for Dyson in the Asian market.
Figure: Porter’s Five Forces
Source: (Asad, 2015)
Internal Environment Analysis
Porter’s Value Chain
The Porter’s Value Chain for Dyson Ltd has been distinguished into two activities as described herein as follows:
- Inbound Logistics:The inbound logistics includes central inventory system that has contributed towards setting market advantage (Linton and Solomon, 2017). Furthermore, efficient supply chain management strategy has provided a substantial advantage to the business of Dyson Ltd.
- Operation:In the operations, Dyson Ltd Management has identified three strategies to support the manufacturing, distribution, and quality management. Operations i.e. Just-in-time, Lean strategy and Total Quality Management strategy have been utilised to develop most significant areas of business (Hamilton and Selen, 2016).
- Outbound Logistics:In the outbound logistics, domestic and international suppliers have been included to develop international distribution strategy leading to growth in the new markets such as Asian markets.
- Sales and Marketing:Dyson Ltd has got a significant advantage in sales and marketing as the company manufacturers high-quality products involving latest technologies. Alternatively, the privately owned company has spent less on advertising and promotion to support R&D (Hamilton and Selen, 2016).
- Services:In the business environment, after sales service of Dyson can be recognised as one of the crucial plus points. On-site customer services and clear instruction have been given as services method. Moreover, such important services methods will encourage the purchasing behaviour of the target demographics.
- Infrastructure:The centralised organisation framework of Dyson Ltd has been one of the leading advantages to the business. The headquarter of the company is situated in the United Kingdom from where business terms such as manufacturing, sales and marketing strategies have been dictated (Mahmoodzadeh, Jalalinia and Nekui Yazdi, 2009).
- Human Resource Management:In the UK division, 500 engineers have been hired whereas Malaysian manufacturing plant has 4,000 workers supporting the manufacturing, sales and distribution of products.
- Process and R&D: By spending more financial resources on research and development, Dyson Ltd has continuously supported the profitability of business. The R&D team has worked on to invent innovative technology for the target market audience (Hwang and Chung, 2016).
- Procurement:The entire procedure has been monitored through online system so that every department has performed efficiently leading towards sustainability of business (Aloysius, Deck and Farmer, 2012).
The VRIO Framework of business of Dyson Ltd has been described as follows:
- Valuable:Dyson Ltd has utilised the business experience and workforce to create unmatched values to the business. Precisely, the business logistics and operations have largely contributed towards setting up competitive advantage in the target market.
- Rarity:Deeply embedded design and innovative product features have added rarity that has led to substantial amount of competitive advantage (Wit and Meyer, 2010). For instance, the products of Dyson Ltd have got extra features that have influenced the purchasing behaviour of the target audience.
- Inimitability:The elegant technological use and low energy consumption of electronic devices of Dyson Ltd has got inimitable features. Therefore, the technology and design cannot be replicated by the competitors due to copyright regulation. Thus, significant competitive advantage has been drawn.
- Organised to capture value:Moreover, the latest innovations and technologies developed by the R&D team of Dyson Ltd have been registered legally so that value capturing will become evident (Wit and Meyer, 2010). Leading to the event, such organised business concept can provide certain competitive advantage to the firm.
Clearly, the VRIO analysis can describe how distinctive competencies have led to success in the target market drawing sustainable advantage over the other market participants.
The leading strategies implemented by Dyson Ltd have been stated as below:
- Reinvesting in R&D:Dyson Ltd has invested significant part of profit in R&D section to develop revolutionary products. Such instrumental strategic decision-making has worked effectively to develop modern technological prototypes. Bu utilising fund in research and product testing, Dyson Ltd has manufactured affordable products as per the need of the target consumers. Notably, in 2014, Dyson has invested £1 billion in the R&D and the company has targeted to launch 100 new products by 2018.
- Innovative Product Design:Dyson has concentrated on innovative design to meet the expectations of the target audience. The engineers have utilised their technological skills and efficiency to develop the most suitable products to alter the purchasing behaviour of the target demographics. Such strategic move has enhanced the sales of products and brand name simultaneously (Wollerton, 2015).
- Customer-centric business:As a matter of the fact, Dyson Ltd has improvised customer-centric business approach to identify the prominent need and demand of the target audience. According to the need, the company has developed its marketing and manufacturing decisions to satisfy the customers creating customer value. Such effective strategy has been a positive for business of Dyson.
A balance scorecard has been presented herein below to evaluate the current performance level of Dyson Ltd in the international market:
- Financial Performance:Dyson has a good financial position over the international market. The revenue of the firm in the year 2015 was around £1.72 billion. The maximum portion of its revenue comes from the European and Asian market due to its modern marketing policies and high demand for its products (Pritchard and Armistead, 2009).
- Customer Performance:Dyson is well known for its customer centric approach that helps the firm to retain potential customers in the market. Achieving a high customer satisfaction level through the introduction of innovative products is the primary aim of the company (Johnson, Scholes and Whittington, 2008). On the other hand, the door to door service of the company helps it to gain a competitive advantage in the market.
- Internal Performance:Dyson implies a centralised organisation structure that makes the decision making process slower and concentrated in the hands of few key leaders. On the other hand, the involvement of fewer people in the decision making process also helps in reducing the conflicts during the strategy formation (Norton, 2015).
- Innovation Performance:Innovation is the key to the success of Dyson Ltd in the international market. The firm employs more than 500 engineers in the United Kingdom and invests a huge amount of money on research and development.
There are several risks that Dyson’s business may face in the Asian market. Some of the business uncertainties are discussed herein below:
Risk Management Plan
Strategic risk occurs due to the change in the preference of the consumers or emerging technologies in the market.
The company needs to invest good amount of money on research and develop to keep its strategies updated.
Financial risk occurs due to loss of money.
A proper market research is required while starting a new venture. Lessons from prior ventures must be considered while designing new products and services for the firm (Dionne, 2013).
The operations risk occurs due to internal failure of the organisation.
There is a need to develop proper HR policies and procedures to deal with workplace conflicts.
The loss of reputation may occur from product failure, negative publicity and lawsuits.
There is a need of proper market research and consideration of the rules and regulations of the government of the nations in which the company is operating.
The SWOT analysis for Dyson Ltd has been presented as follows:
- Domestic market presence is a leading strength
- Barriers of entry in the electronic markets is another strength for Dyson
- High sales and profit have been leading business strength for Dyson Ltd (Stoichev, 2014)
- Reduced labour cost can be another significant aspect
- Skilled workforce and R&D team have been major strength to business
- In the contemporary business circumstances, brand portfolio has been a major weakness for Dyson Ltd
- Growing number of competitors can be identified as another business weakness
- Rapid growth in technology can replace the tradition electronic goods (Shen, Yang and Ye, 2016)
- New possibilities of acquisition can create substantial market opportunities for Dyson
- Growing economic condition in the developed and emerging nations have created opportunities to grow
- Rising demand of small electronic appliances can be impressive for business growth
- New products and innovative technology can deliver new market penetration opportunity for Dyson Ltd
- Rising cost of raw materials and technology has been a threat to business growth
- Price fluctuation in electronic items is another comprehensive threat
By considering the above analysis, two different strategies can be used by Dyson Ltd. to develop its business in the Asian market. The two strategies are evaluated and discussed in details herein below:
The market penetration strategy is used to expand the business in the existing market by using the existing products. The company can use this strategy by focusing on the marketing activities. Market segmentation is an essential way of implementing the market penetration strategy. The market penetration strategy is used to increase brand awareness and brand positioning in the market (Merkert, 2012). By considering the current rivalry in the Asian market, it will be quite difficult for Dyson to enhance its positioning and fight the growing competition using the market penetration strategy. Hence, Dyson needs a better way to fight the increasing rivalry to survive and seek success in the Asian market.
The product development strategy is used to introduce new products in the existing market. According to the above analysis, Dyson has a small range of products that is not enough for the company to fight the growing competition in the Asian market (Shen, Yang and Ye, 2016). Hence, the firm needs to develop its product portfolio in order to survive and seek success in Asia. On the other hand, the product diversification strategy will be helpful in seeking a competitive edge over the rivals (Johnson et al., 2014). Additionally, the diversification of the business will help to reduce its financial and strategic risk in the long run.
On the basis of the above strategic evaluations, Dyson must implement the product development strategy over the market penetration strategy to survive and grow its business in the Asian market. For example, Dyson can introduce new products like car batteries and electronic cars to expand its product portfolio (Woollaston, 2016). Currently, electric cars are in high demand in the Asian market due to increased consciousness regarding the environment. Hence, investment on car batteries and electronic cars will enhance the firm’s product range and increase the number of potential customers. Dyson needs to make changes in its Research and Development team to develop the new products. On the other hand, necessary changes are required in the marketing strategies to introduce the new products in the existing Asian market (Patching, 2014).
By considering the above analysis, the challenges for Dyson in the Asian market has increased due to the increasing rivalry and substitute products. Hence, the company needs to identify innovative products that will be in high demand in the Asian market to seek growth in the long run. On the other hand, the development of products and introduction of a diverged range of innovative technology will help the company to fight the increasing company and seek competitive advantage in the Asian market. Conclusively, Dyson Ltd must make investment on research and development to implement the strategic plan to seek growth in the upcoming future.
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