Dyson Pestel Analysis

Dyson case

PESTEL ANALYSIS

POLITICAL

In many countries, fund raising and getting a loan is very difficult due to high interest rates, especially for researchers.

Companies such as Dyson need lots of R&D. Luckily; Dyson was able to sign a deal with a Japanese company, which provided him with research and development. That makes them able to keep developing their new innovative vacuum cleaners and keep increasing their worldwide market share.

? Research & Development is highly needed in innovating companies such as Dyson, which consequently need to invest. In the UK, the high interest rates make it difficult for companies to raise such funds or get a loan, and especially researchers. To reduce those costs, Dyson signed a deal with a Japanese company, providing them R&D.

ECONOMIC

The market scenario did not provide a favourable condition for the industry to expand its business, especially in consumer products. As an example, the vacuum cleaner factory in Wiltshire was shut down, due to a highly fluctuating demand, which resulted in the loss of 590 jobs.

Dyson then moved its manufacturing to the Far East where labour costs are much cheaper. In 2007 Dyson formed a partnership with the Malaysian electronic manufacturer industry (VSI) to take on a major role in Dyson's supply chain, from raw material sourcing and production to distribution.

? The market scenario is not favourable for the industry to expand because of the highly fluctuating demand. As an example, the vacuum cleaner factory in Wiltshire was shut down and as a result, 590 people lost their job. Dyson formed a partnership with the Malaysian Electronic Manufacturer Industry (VSO), which took on a major role in the supply chain (raw material sourcing, production, and distribution), in order to reduce labour and production costs.

SOCIAL

Smaller households are on the rise and create an increasing demand, as each household needs a vacuum cleaner.

Changing markets in the business environment makes it more and more difficult for an organization like Dyson to keep track of people's taste, which can prove to be a menace for the organization. However, Dyson has always kept itself up to date in terms of technology and then succeeded in satisfying the trend of replacement demand.

? Increasing demand due to smaller households: each household needs a vacuum cleaner. Therefore, it is hard to keep track of changing tastes. However, Dyson has always kekpt itself up to date in terms of technology to satisfy the trend of replacement demand.

TECHNOLOGICAL

Most of the Dyson products are not very easy to copy due to their constant technological advancement. Dyson has always been able to keep a head of the competition with innovation and new technologies. Although Dyson remains leader on the vacuum cleaner market in the UK, it's beginning to lose market shares to cheaper machines that have copied its bag-less technology.

The latest of which is the "Telescope" vacuum cleaner, which can be compressed for storage. Besides, production has become more automated and standardized

? Dyson production is being more automated and standardized. Its technological advancement allows the brand to keep ahead of the competition through innovation. Although the company remains leader on the British vacuum cleaner market, it starts loosing market shares to cheaper machines, copying for example the bag-less technology.

ENVIRONMENTAL

? Environmental awareness has increased: there is an increasing need for energy efficient and effective vacuum cleaners.

LEGAL

Dyson claims its recognition through its transparent bin and proved it by setting a trademark registration challenging the UK trademark appeal process. Dyson proceed with various photographic views or specific bin design.

Though Dyson confronted many legal problems, it succeeded in sustaining itself in the competitive environment.

? Dyson set up a trademark registration claiming recognition for their transparent bin. The brand proceeded with various photographic views and design.

5 FORCES ANALYSIS

Threat of new entrants

Dyson has differentiated their product with specific functions, and is a well-established company including a specific technology and a big experience curve effect, when comparing with another new entry in this market.

? Dyson faces the competition with original innovative products with specific functions, technology and design. For example, their vacuum cleaners offer a real experience curve effect.

The threat of substitute products

The threat of substitute is very important; as hundreds of new vacuums cleaners are produced each year with new technologies. Dyson's strengths are research and development and unique marketing strategy. Dyson should further invest in creating unique vacuum cleaner that can compete with robot cleaner, steam cleaner, or other vacuum cleaners.

? High because hundreds of new vacuum cleaner are produced each year including new technologies. Dyson uses a good R&D and marketing strategy to compete with robot, steam or other cleaners.

The bargaining power of customers

The purchaser who buys the cleaners also has a big influence on Dyson. Demands for vacuum cleaner mainly come from a need for replacement at the end of a product life cycle. Also, sales volumes are stable although profit