CS Dyson and the Bagless Vacuum Cleaner_2

8/10/2019 CS Dyson and the Bagless Vacuum Cleaner_2

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Week 5: Dyson

Dyson and the bagless vacuum cleaner: a case study1

With a growth rate of 300%, the capture of more than 50% of the UK vacuum cleanermarket in less than 4 years, and a new !5 million "#$ facility the success of the$yson agless vacuum cleaner is clear& What is not so well understood is the storypreceding this success& 'his case study challenges much of the previously acceptedapproach to conducting usiness& (or e)ample, the product in *uestion used newtechnology that was initially re+ected y e)isting manufacturers it was priced at morethan doule that of e)isting products virtually nothing was spent on marketing oradvertising, instead, the company relied primarily on its own efforts to enlist retailers,on pulicity generated y the occasional newspaper article aout the product, and on

word of mouth&

Introduction-onventional wisdom would surely suggest that $yson .ppliances /td& would fail

within a few months& .fter all it appeared to e a small company with an eccentricmanager at its helm, trying to sell an overpriced product of limited appeal in a verycompetitive market with less e)pensive, conventional, massmarket products made yrespected manufacturers whose names were, *uite literally, household words& 'heresult was very different& 'he story of the $yson agless vacuum cleaner is not aclassic tale of 1rags to riches2& 'he charismatic inventor ames $yson was affordedmany privileges and opportunities not availale to most& t is, nonetheless, afascinating story and illustrates many of the difficulties and prolems faced y smallusinesses and 1lone inventors2 and demonstrates the determination, hard work andsacrifices necessary in order to succeed& 'he clich against the odds, which $yson used as the title of his autoiography6$yson, !7789, is certainly appropriate and tells the story of the development and launch of the first agless vacuum cleaner the$yson $-0!& 'his case raises several significant research *uestions in the field of innovation management& (irstly, how and

why did senior e)ecutives at leading appliance manufacturers across :urope, such as :lectrolu), ;osch and


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accounts for a third of all vacuum cleaner sales in the UK& n !778 $yson .ppliances sold nearly !&4 million units worldwide&"evenues for the year were !70 million ut surprisingly net income was A7 million !5% of sales 6see 'ale !&!9&

'ale !&!'he spectacular growth of $yson

The spectacular growth of Dyson

Sales

(value of

units sold

000s

100

80

60

0ti!e

1995 19961994

Dyson

Panasonic

Electrolux

Miele

Hoover

File: cyctable2

1400

1200

100

40

20

oblin

!ax

BackgroundBrior to the development of the agless vacuum cleaner ames $yson had already demonstrated his prowess as a designer andusinessman& >e was responsile for the 1allarrow2& . wheelarrow that revolutionised that market y using a all rather thana wheel& 'his was to provide the financial foundation for the development of the agless vacuum cleaner& 'hat particulare)perience taught ames $yson many lessons& Cne in particular is worth mentioning& 'he patents for the allarrow wereowned y the company that ames $yson helped set up& >e eventually parted with this company ut unfortunately lost allcontrol of the patents as they elonged to the company and not to himself& $yson was determined that any future patent wouldpersonally elong to him and not a company&


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(or those of you who may not recall their ;ritish social and economic history, >uert ;ooth developed the first vacuum cleaner atthe end of the nineteenth century& Dacuum technology uses the principle of a vacuum 6the asence of everything, even air9&Dacuum cleaners actually create a partial vacuum, or more accurately, an area of reduced air pressure as air moves outward

within the fan& .irflow is created as air with normal air pressure moves toward the area with the reduced air pressure& . fewyears later in !70A the ;ritish Dacuum -leaner -ompany was offering a vacuum cleaning service to the homes of the affluentand wealthy& . large horse drawn 5hp engine would pull up outside your home and a hose would e fed into the house where it

would egin to suck out all the dust& ;y !704 a more moile machine was availale for use and was operated y domesticservants& .s popularity of the technology increased additional manufacturers egan entering the market& :lectrolu) introduced acylinder and hose vacuum cleaner in !7!3 and in !73E >oover introduced an upright cleaner with rotating rushes& 'his wasknown as the >oover +unior and was the est selling vacuum cleaner in the UK& ndeed, virtually all vacuum cleaners since thistime are variations on that >oover unior design& 'hat was until the late !7F0s and early !780s when ames $yson developed avacuum cleaner using cyclonic forces and did away with the need for a ag to collect dust&

When it comes to cleaning performance, there is a tendency to look primarily at the power of the suction motor and the amountof ristles on the rush roll& While these are important considerations, the *uality and siGe of the paper ag are very importantfactors as well& 'he paper ag in a vacuum cleaner consists of a special paper enclosure into which the dirt and air are directedas part of the filtering system& 'he paper used is specially processed to permit the air to pass through it while retaining as muchof the dust and dirt as possile& 'he *uality of the agHs filter media effects oth its aility to retain the fine dust and allergensand its aility to allow air to easily flow through it& 'he siGe of the ag will also affect how easily the airflows through it& . good*uality paper ag is a very important vacuum cleaner component, which needs to e regularly replaced& 'he $yson vacuum

cleaner maintains its performance during the vacuuming process ecause it has no ag, hence there is no reduction in suctiondue to clogging of the pores of the ag& . feature that is characteristic of the agged cleaners&

The development of a bagless vacuum cleanert is the ag component of a vacuum cleaner that $yson focussed on torevolutionise the vacuum cleaner appliance industry& But simply he tackledthe key dilemma for vacuum cleaners how to collect dirt and dust, yet at thesame time allow clean air to pass through& 'his was achieved y aandoningthe use of ags to collect dirt& nstead he adapted the use of centrifugalforces&


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allow clean air to pass through& .s soon as these clogged up 6which starts to occur immediately9 suction egins to deteriorate&ow then can this limitation eovercome? 'he idea came to $yson while he was investigating a prolem at his allarrow factory& 'o improve toughness theproduct was powder coated and then heated& 'his involved spraying the powder coating, which was messy& 'o overcome thisprolem an industrial vacuum cleaner was re*uired& 'he suppliers of the powder coating informed $yson that most of theirlarger customers use cyclones to collect the powder& =uch cyclones are also used in a variety of industrial settings such assawmills, to e)tract dust from the air& 'his information was the eginning of what turned out to e a fifteenyear pro+ect&

-yclonic cleaning systems separate the dust particles from the airflow y spinning the air within a separation chamer& 'he$yson system operates as followsJ.ny dirt and air enters the noGGle near the floor and travels through the hose toward the separation chamers& t first enters theprimary dirt separation chamer where the larger dirt particles are deposited& (rom there the air with the remaining fine dirt anddust travels to the cyclonic chamer& Cnce in the cyclonic chamer, the spinning action separates most of the fine dirt and dustparticles from the airflow& 'he spinning causes centrifugal force to act upon the dust particles, moving them outward while the aire)its from the inner part of the chamer 6see (igure !9&

(igure !J ;asic operating principle of $yson agless vacuum cleaner

air "lo##it$ %ebris an% %ust

suc&e% into cone

clean air

"orce% out

cylone e""ect

create%' #it$

(articles bein)

"orce% to outsi%e

an% t$en %o#n

t$e si%es o" t$e

cone

%ebris * %ust (articles collect at botto+

o" cone in a %etac$able container #$ic$ is

t$en e+(tie% #$en re,uire%

!acuu+ "orces

clean air u( an% out

t$rou)$ central "unnel

'he $yson vacuum cleaner uses two cyclones and several filters to capture dirt and dust& While the first cyclonic chamercaptured large dust particles some fine dust particles were escaping with the air& 'he answer was a second smaller cyclone tocapture the fine dust particles& $yson spent many months developing this idea& 'he key prolem was in the application of thetheory& 'hat is, having dust pass through one cyclone and then another all in a small domestic appliance& .fter months, andeventually years, of further trials and errors the development of a cyclone within a cyclone was orn 6the dual cyclone9& .s dirtand air is sucked into the machine the first cyclone separates the large dust particles and these come to rest at the ottom of thecanister& 'he remaining air and fine dust 6including cigarette smoke9 is then carried into a second cyclone which separates theeven finer dust particles from the air&


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'he technology also uses several replaceale filters to remove even smaller particles of dust& =ince the air is *uite clean, it isthen allowed to flow through the motor to cool it& .fter leaving the motor the air is filtered y an >:B. e)haust filter to removeeven more fine particles and caron from the motor rushes efore it leaves the vacuum cleaner&

In search of a manufacturer- don!t let the bastards get you down"

'hanks to e)perience gained with other products, most notaly the allarrow, $yson was ale to ensure that patent applicationswere in place prior to negotiations& 'his is essential if you wish to ensure that large multinational companies are not going tosteal your intellectual property& (rom $yson@s e)perience he would argue that they would proaly try to steal it regardless ofany protection one held&

$yson was offering a licence to manufacturing companies that included e)clusive rights to his patents& n return $yson wouldreceive a percentage of their profits from the sale of the manufactured product& $yson was looking for a five to ten year licence

with a royalty of 5% of the wholesale price and 40,000 up front& n addition he was offering his help in the development of theproduct from its prototype form& Unfortunately >oover, :lectrolu), olin, ;lack and $ecker, .:, Da), and many others all saidno& 'here were many different reasons given& =ometimes the companies appeared to e arrogant and dismissed $yson as aLloony crank@& What was surprising was that throughout companies appeared to e osessed with finding fault with the product&Cn other occasions the company e)pected $yson to hand over the patents for very little financial reward& (re*uently there weredifficulties in agreeing to meet this was due to prolems of protecting the intellectual property that would flow from a meetingetween the "#$ e)perts of the company in *uestion and $yson&


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e)isting contract manufacturers& :ssentially $yson decided to offer a series of contracts to two e)isting manufacturingcompanies& Cne to mould the component parts and another to assemle& (or the e)isting moulding and assemly companies it

was additional capacity& Unfortunately the companies selected y $yson caused further prolems& (irstly, the *uality of thecompleted product was not acceptale to $yson& =econdly the companies seemed to e s*ueeGing $yson@s work in etweene)isting long standing contracts& n the end $yson decided that he would prefer to manufacture and assemle the producthimself& >e purchased the moulds from the plastic moulding company and attempted to estalish a factory in the UK& 'herationale eing that this would at least ensure that he was in control of his own destiny and will not have to rely on others&(urther difficulties, however, were encountered y $yson& (irstly, he found that it is e)tremely difficult to orrow money even

with a proven successful product& $yson e)plored the possiility of setting up a factory in an area where overnmentdevelopment grants are availale& (or e)ample, he tried =outh Wales ut $avid >unt, the then Welsh Cffice


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'he chart elow depicts cleaning performance after vacuuming !00 grams of .='< 'est $irt& Iou will see that the $ysonmachine maintains a steady airflow other 1agged2 machines lose airflow 6see 'ale !&A9&

'ale !&AJ-leaning performance

"leaning perfor!ance of five

vacuu! cleaners

# of airflow lost

-0

60

50

40

.0

20

10

0

$ra!s

vacuu!ed200 400 600 800 10000

Dyson

/(ri)$t

/(ri)$t

/(ri)$t

anister D

File: cyctable1

'oover!s bagless vacuum cleanerWith sales and market share continuing to decline 6see 'ale !&39 oover have attempted to fight $yson in the

vacuum cleaner market y developing similar agless vacuum technologies& >oover emarked on a technology transfere)ercise to utilise technology first developed for the oil industry& 'he centrifugal force technology 6similar to the technology usedy $yson9 was used to separate gas or sand from crude oil& 'his technology has now een applied to >oover@s range of vacuumcleaners 6'riple Dorte) vacuum cleaners9 in attempt to compete with $yson@s own patented centrifugal force technology 6see>oover&co&uk, A0009& nterestingly >oover@s technology dispenses with the need for any filters& 'his may provide the advantage>oover re*uires to reestalish itself as a key player in the vacuum cleaner market& $yson is claiming, however, that >oover@stechnology infringes his patents and is currently fighting this lawsuit&

$yson has had several legal attles with his competitors over patent infringement and advertising standards& n anuary A000the .dvertising =tandards .ssociation 6.=.9 ruled in favour of $yson regarding an advertisement from :lectrolu) that claimed itsvacuum cleaner was the most powerful& 'he .=. ruled that power of the motor was no indication of vacuum cleanereffectiveness 6=unday 'imes, A0009&


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Table1() *ith sales declining +iele and 'oover have attempted totake on Dyson in the vacuum cleaner market

Dyson ,olume ./ ,alue ./

'otal market 33&5 53&5

Upright 5!&E EE&7

cylinder !3&E A7&8'oover

'otal market !A&3 7&A

Upright !E&5 !0&A

-ylinder 8&A F&!

+iele

'otal market A&! A&E

-ylinder E&! !0&4

=ourceJ uardian


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(igure AJ Brofits at $yson

0onclusions

ames $yson certainly elieves it was worth it in the end& ;ut during the fifteenyear period there were proaly many occasionswhen he felt like giving up or more likely would have sold out for a few hundred thousand pounds& (rom !780 to !77A was avery difficult period, not +ust for himself ut for his family, and enormous pressures were placed on them& (ortunately theysurvived, argualy, someone without the ackground, resources and contacts would have failed&


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=unday 'imes 6A0009 $yson ags ruling on :lectrolu), =ec 3, p3&Wallop > 6A00E9 $yson cleans up with 3!m payday, $aily 'elegraph, Pov, !, ;usiness =ection, B4&

CS Dyson and the Bagless Vacuum Cleaner_2

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