Dyson Application Limited: A Case Study on New Product Development

The Dyson Innovation Strategy Journey

Dyson Limited is the brainchild of James Dyson, who started the company on his own without any formal
degree or background in business. His journey from barrows to #60 on the Bloomberg Billionaires
Index with a net worth of $26.2 billion leaves little to the imagination.

Before we dive deeper into the company that continues to set the bar higher and leave people awestruck
with its futuristic and impressive products, including cordless and bagless vacuum cleaners to bladeless
fans, let’s understand the force powering it ahead: James Dyson.

James Dyson: The One Man Army

Born in 1947 in the town of Cromer, Norfolk, on the east coast of England to a family of academics and
creatives, James Dyson first studied in a boarding school known as Gresham’s School in Holt, where he
was immersed in arts and languages.

Then he decided to pursue liberal arts at the Byam Shaw School of Art for a year, followed by the Royal
College of Art (RCA), where he studied interior designing and furniture design for four years.
Subsequently, he stumbled upon engineering and was fascinated with how it can be leveraged to make
things work better.

The Dyson Sea Truck

At RCA, Dyson began working with a British entrepreneur, Jeremy Fry, to build a landing aircraft. This is
where he learned to engineer and develop a product from scratch.

James Dyson's Rotork Sea Truck

Together, they designed and developed the Dyson Sea Truck – an amphibious high-speed landing craft
with a smooth fiberglass hull. Dyson even used the design as his thesis project in 1970, and once he
graduated with his degree in interior designing, he was hired to sell Sea Trucks at Rotork Controls Ltd, the
company headed by Fry.

The Sea Trucks were undoubtedly a success as they were selling over 200 boats per year, and their
customers included Scottish lairds who used them to transport goods and even the Egyptian army, which
deployed them in the war with Israel in 1973.

The Dyson Wheelbarrow Paving The Way For Something Big

During his sprees at renovating and repairing his three-hundred-year-old farmhouse in the Cotswolds,
Dyson found himself spending quite a bit of time with a wheelbarrow. He soon discovered the faults in the
equipment and realized how unstable and crummy it was, with its rubber wheel sinking into the ground,
puncturing, and leaving marks and the shallow and wide metal trough sloping the contents.

James Dyson's Ballbarrow

Dyson soon came up with a solution to design a deep molded-plastic trough and replace the barrow with a
ball instead of the wheel called Ballbarrow.

It would be an understatement to say that it was a success in the U.K. as, within a year, the Ballbarrow had
taken more than half of the wheelbarrow’s market and was selling around 45000 units in a year. However,
before he got the chance to enter the much bigger U.S. market, his idea was emulated by someone else –
stolen by an ex-employee and shared with a Chicago-based company, according to Dyson.

However, Dyson was not dismayed by his misfortune, and instead of being crushed and starting a litigation
war, he moved forward to the idea that put him on the world

The Most Iconic Innovation Of The 20th Century: Dyson Vacuum

Dyson’s frustrating experience with malfunctioning and breaking down of his Hoover vacuum cleaner
while using it at home made him realize its shortcoming. Being the inquisitive individual that he was, he
took it upon himself to find the root of the problem and took it apart, layer by layer. He soon understood
the problem: The accumulated dust clogged the pores, making it lose suction power, restricting the airflow
and, in turn, reducing the effectiveness of the vacuum.

The idea popped into Dyson’s head when he saw a sawmill that used a 30-foot-high conical centrifuge that
could spin and remove dust out of the air. He knew that the same technology could be shrunk down and
used in the vacuum cleaner, eliminating the need for bags and ensuring they wouldn’t lose suction.

Hence, he got to work. He learned more about how large industrial cyclones could remove sawdust and
applied the concept in a vacuum cleaner. He replaced the bag in his vacuum cleaner with a cardboard
cyclone, much to his amazement, as it worked well by gathering more dust and being more resistant to
breakdowns.

Over a period of many years, he built over five thousand prototypes to perfect the design. It was a rough
period for his family, and they were literally counting pennies. Not only did his wife had to get a job, but
he was considered crazy.

However, he kept at it, and with iterative improvements and years of testing and tweaking, he finalized a
prototype which he named “DC01” that used “Dual Cyclone” technology.

The Never-ending Challenges

Building a breakthrough appliance was one thing, but getting it on the market was a different ball game
altogether – one for which Dyson wasn’t ready.

Dyson had thought that licensing the idea to form a company would be easy, and manufacturers would
happily team up with him. His dreams of a vacuum revolution were cut short as he was rejected time and
again by companies who saw his product as a threat to their established businesses.

Starting from domestic companies and failing to get the desired results, he turned to explore opportunities
overseas.

Initially, he bagged a deal with Amway, a U.S. based consumer products company, but it backed out at the
end and released its own version of a dual-cyclone vacuum cleaner. Hoover, the top vacuum company in
the U.K., refused to collaborate unless he gave up his rights to his invention. Electrolux, another well-
known name in the consumer electronics industry, told him point-blank that it was not possible to sell
vacuum cleaners without bags.

Dejected but unwilling to give up, Dyson kept looking for opportunities.

In the mid-1980’s Dyson was finally able to manufacture and sell his vacuum cleaners by licensing to a
Japanese Manufacturer, Apex, which released a pink-colored upright cyclonic vacuum cleaner called the
G-Force in Japan, for a staggering price of $2000.

The expensive device became a status symbol in Japan to the point that everyone wanted to get their hands
on it. The G-Force also won the 1991 International Design Fair in Japan, proving its worth.
Seeing the success of the G-Force, a Canadian company, Iona introduced the product in Canada with the
name of Drytech.

Establishing Dyson Limited

Having had some financial success and realizing that if he really wanted the technology out there, he’d
have to steer the ropes himself, Dyson set up Dyson Appliances Limited in the U.K. in 1991. It wasn’t easy
as he reportedly took a loan of approximately $850,000 by putting his home as collateral and invested his
life savings in order to breathe life into his vision.

Not only did he establish a factory but also a research center as it was important to him, right from the
beginning to come up with new ways of building better products.

He launched a vacuum cleaner, the Dual Cyclone DC01, in 1993 that he designed and developed all on his
own at a price of $399. While it was no doubt costly to the extent that retailers were hesitant to carry it in
their stores, within two years, it was outselling Hoover and began capturing market share rapidly.

James Dyson with the DC01

Contrary to the opinion of the majority, people were fascinated with this innovative new technology, clear
and minimalistic design, and the fact that it allowed them to see how the junk buildup as the vacuum
cleaner sucks it.

To attract people towards its unique product and get people talking, Dyson ran an advertising campaign on
T.V. highlighting that Dyson’s vacuum cleaners did not require any bags, unlike its competitors. The
slogan “Say goodbye to the bag” worked its magic, and Dyson Dual Cyclone quickly became a hot-selling
product in the U.K. and even garnered attention worldwide.

In 1999, Hoover U.K launched its own version of a bagless vacuum cleaner. Dyson sued them for patent
infringement, forcing them to stop. However, various brands worldwide had by then began producing their
own versions of the bagless vacuum cleaner, and Dyson, who could have rightfully sued them, all choose
not to do. According to him, it would simply divert his focus and achieve little.

Expanding In New Markets & Launching A New Product

Whilst Dyson focused on the UK, he licensed the vacuum cleaner technology to Fantom technologies in
North America from 1996-2001. After that, he decided to handle the reins himself.

At the same time, Dyson decided that running the company consumed the majority of his time, and it
would be in the interest of both him and the company that he focuses primarily on design, innovation, and
engineering. Thus, he brought Martin McCourt as the CEO and resorted himself to what he was most
passionate about making things work better.

McCourt led the successful launch of Dyson in the US and established an efficient manufacturing arm of
the company to cater to the growing demand. He helped Dyson gain popularity in the US and managed to
strike deals with retailers to sell Dyson's vacuum cleaners.

Best Buy was the first local retailer that came on board, presumably because the manager there tried the
vacuum cleaner himself and, upon witnessing its superior functionality and usability, pushed to start
selling it. Within a year, Best Buy was selling the vacuum cleaner way ahead of its projects, and customers
began loving it. Hence, all the other top retailers, including Target and Home Depot, followed suit and
joined hands with Dyson.

Expanding The Product Line

Dyson, meanwhile, had gone back to the drawing board in order to enhance the quality of the vacuum
cleaner and work on new products. It was only a matter of time before Dyson ventured into other home
appliances, starting with the washing machine.

He wanted to develop a washing machine with superior cleaning power. It is said that the engineers at
Dyson found out that a traditional washing machine takes 2 hours to remove as much dirt as hand washing
can remove in just 15 minutes. That made them ponder that is the washing machine even facilitating
people.

It led to a new type of washing machine – the ContraRotator also referred to as the double-drum Dyson
washer. It had two drums rotating in opposite directions to simulate hand washing. Not only was the
machine more energy-efficient, but it was also more effective as it flexed the fabric of the clothes and
expelled the dirt, and could handle larger loads. Plus, the washing machine was adorned with unique and
bright colors, making it stand out from the other washing machines.
It was launched in 2000 and priced at $1,300 (£1,000) – double the cost of competitors' products. While it
did have positive reviews, it failed to capture the market and become the go-to washing appliance of
customers. The Contrarotator was followed up by "Flowcheck" and "Allergy" models.

The Dyson washing machine failed to become a commercial success and was eventually discontinued a
few years later.

Dyson considered it an "educative failure" and kept on encouraging his employees to be bold and take
risks. Inventing is the key, and that is why Dyson earmarks approximately 15 percent of the company's
annual revenue for R&D.

Off To Malaysia

Until 2002, Dyson products were manufactured in Malmesbury, Wiltshire. However, due to a number of
reasons, including high costs of production and the limited space in the UK, Dyson transferred production
to Malaysia.

The company faced a huge backlash as many people were made redundant in the UK, and labor unions and
the government were not happy, but it followed through with the plan.

Having re-located the manufacturing arm to Malaysia, Dyson kept the headquarters in Malmesbury, UK.
The cost savings enabled Dyson to invest more in research and development and continue to innovate with
new products.

In 2004, Dyson and Meiban Group Ltd formed a joint Meiban-Dyson Laundry Manufacturing Plant in
Malaysia. In 2007, Dyson partnered up with VS Industry Bhd (VSI) to boost its supply chain as VSI had
expertise in everything, from sourcing and manufacturing to distribution. This helped Dyson supply high-
quality finished products to its customers around the globe.

The company made a strategic decision to relocate the production to Malaysia due to lower costs and
unavailability of space. While Dyson received a huge backlash, the company stuck to its strategy and
yielded positive results in the form of cost savings.

Dyson: The Apple Of Consumer Discretionary Electronic Products

With an obsessive eye for precise engineering, aesthetic industrial design, and state-of-the-art technology,
Dyson has made its mark in a market of top-of-the-line household and business appliances. In the process,
it has proved that premium-quality consumer gadgets can make companies money if they do it well.

That's not all. Dyson is shrouded in secrecy. The company is not public, employees are tight-lipped,
several projects are undergoing at one time, and one look at Dyson's headquarters where prototypes are
shielded, access is extremely limited, and machinery is obscured from view will have you believing that
you are in a whole new world.

Dyson has, over the years, released an extensive range of products, including vacuum cleaners, washing
machines, fans, heaters, lights, hand dryers, and air purifiers, among others.

Let's now take a look at some of Dyson's products:

Cordless Vacuum Cleaner

In 2006, Dyson put on the market its first-ever cordless vacuum cleaner, the DC16. It had the same cyclone
technology and upright styling except that it did not have to be plugged in to use.
This was a bold move by the company as, according to analysts’ predictions, it was going to negatively
impact the sales of the company's main product – corded vacuum cleaner – which accounted for the
majority of the sales at the time.

Over the course of time, new models were launched, including DC30, DC44, and DC59, among others
with more power, better performance, enhanced features for various markets.

Such has been the success of Dyson's cordless vacuum cleaners that the company ended the production of
corded vacuum cleaners in 2018 to solely focus on the cordless ones.

Robotic Vacuum Cleaner

While Dyson continued to do well with its core offerings, it kept on innovating to develop new products.
One such product was Dyson's first robotic vacuum cleaner, the DC06, which was introduced in 2005.

This unique tech appliance had the ability to 'learn' the room according to Dyson and clean accordingly.
From differentiating between objects, such as furniture and walls, and living beings, such as humans and
pets, thanks to its sensors and software, the robot vacuum cleaner was set to revolutionize cleaning.

Unfortunately, that plan didn't come into motion as the robotic vacuum cleaner never really could make it
commercially and remained an in-house project.
In 2015, however, Dyson 360 Eye™ Robot was launched after years of experimentation. It could clean the
house without anyone having to steer it. Yes, that's right!

Airblade Hand Dryer

Dyson's Airblade Hand Dryer launched in 2006 was a success and helped Dyson gain a strong foothold in
the commercial appliance market. Gone were the days of traditional hand dryers doing a lackluster job as
soon as the sleek and elegant Dyson Airblade made its way in the market.

Built to be installed in workplaces and public washrooms, the Airblade used Dyson's digital motor to
power a stream of air at rapid speed to dry the hands within 10-14 seconds. Plus, it used a HEPA filter to
eliminate bacteria from the air, cleaning the hands hygienically. Moreover, it costs less to run and is eco-
friendly.

It was acknowledged and accredited as the first-ever hygienic hand dryer. Newer versions of the Airblade
have continued to roll in and perform exceedingly well in the marketplace.

Air Multiplier Bladeless Fans

In 2009, the Dyson Air Multiplier – an electric fan with no blades – was announced, and it soon garnered
attention worldwide. After all, people had had enough of the visible blades and grilles that accumulated
nothing but dust.

Not only was the Dyson Air Multiplier safe, stable, and sturdy, but also easy to clean, offering precise
control and smooth oscillation to provide uninterrupted airflow.

Ever since the original release of Air Multiplier, Dyson has kept on improving the product and added new
features. From cooling fans to the electrical heater and infrared control to Jet Focus offering different
streams of air, Dyson Air Multiplier has seen numerous upgrades.

Building on the same Air Multiplier technology and augmenting its offerings, Dyson announced Dyson
Hot fan heater in 2011, Air Multiplier Humidifier in 2015, and Dyson Pure Cool air purifier in 2016.

Lighting

Continuing to diversify its product line, Dyson launched LED lamps named "CSYS" in 2015 with heat
pipe technology. The goal was to end problems caused by poor lighting, such as eyestrain and headaches,
and decreased productivity, while enhancing the ambiance with optimal lighting.
In 2018, Dyson launched the "Lightcycle" with enhanced smart capabilities that enabled Bluetooth
connectivity and provided users with the freedom to adjust the lighting however they want.

In addition to the LED lamps, a.k.a task lights, suspended lights, Dyson Cu-beam, were also added to the
portfolio.

Haircare

Dyson entered the beauty and haircare market in 2016 as it released a high-end hair dryer, Dyson
Supersonic handheld hairdryer. Even though it was priced high, it managed to become the best-selling
hairdryer in the UK in 2017.

Other models, including the Airwrap styler, which can style wet hair, and Corrale a cordless hair
straightener, were also launched in 2018 and 2020, respectively.

Safe to say, Dyson is not standing still. It is ever-evolving and continuing to invest heavily in R&D and
looking into innovative new technologies such as battery technology, machine learning, and artificial
intelligence to keep on creating new products that can thrive in new markets.

The Dyson Business Model

Defying conventional wisdom and against all odds, the company has managed to carve out its own market
and established its brand by breathing new life into the home and office appliance market with cutting-
edge technological devices that are near perfect.

Invest In R&D

Dyson firmly believes that it takes real ingenuity to find a better way of doing things and solving real-
world problems. Hence, it puts its money where its mouth is by continuing to heavily invest in research. It
is estimated that Dyson invests around 15-20% of its annual revenue in R&D.

From establishing and running research and development labs to its extensive team of scientists, engineers,
and specialists across the UK, Singapore, and the US pioneering new technologies, Dyson goes the extra
mile to constantly find ways of making things work better and push boundaries.
The company is committed to refining and improving products, making them smarter, stronger, quieter,
long-lasting, and eco-friendly.

Patent Vigorously

Currently, Dyson has around 6000 granted and pending patents as well as registered designs. Let this sink
in for a moment.

Patenting aggressively is essential for Dyson’s success. After all, you can’t expect a company to invest
billions of dollars as well as time and energy in R&D only to later find out that its invention is copied by
someone else.

Dyson considers patenting to be crucial as it encouraging innovation and brings forward more genuinely
unique and creative ideas.

Following are a few of the many patent infringement lawsuits involving Dyson:

 Sued Amway in 1985 for copyright infringement of the Dyson dual cyclone technology, and the
lawsuit was settled with both companies becoming joint licensees.

 Sued Hoover UK for patent infringement in 1999 and won the case. Hoover was ordered to pay
$4.2 million to Dyson in 2002 as the court found that the Hoover vacuums were a blatant copy of
Dyson’s design.

 Sued Qualtex in 2006 for copyright and unregistered design right infringement for copying the
design of Dyson’s products spare parts and won the case.

 Took legal action against Vax, a brand that manufactures electrical goods and cleaning products,
in 2010 for infringement of its vacuum cleaner design. The court decided in favor of Vax.

 Sued Samsung Electronics in 2013 over copying Dyson’s steering technology. Dyson eventually
dropped the case and was then countersued by Samsung.

Differentiate With the Best Products

There’s one thing that Dyson never compromises upon the product quality. At Dyson, engineering leads
the design; functionality and usability are at the forefront. The company goes to extreme lengths to make
sure it offers unique products of the highest quality that add value to people’s daily lives.

From inventing new technologies such as Dyson Digital Motor and Root Cyclone Technology to deliver
the best end-product that’s not only sleek and elegant but also highly functional and user-friendly, Dyson
stands out and hooks customers.

Charge A Premium Price

Dyson’s products don’t come cheap. Everyone knows that and still buys them. Since the beginning, even
when Dyson’s competitors were engaged in price wars and selling cheap products in large volumes, Dyson
priced its products highly.

While the price point shocked many, it did work well for the company. Customers were willing to pay a
high amount because they felt Dyson’s products offered high value and justified the price point.

The Dyson of Today

The Dyson we know today has been a work in progress for the best part of 3 decades. It hasn't stayed still
and always seems to be on the go. Starting from the UK in the 1990s, Dyson expanded its business
operations to Malaysia at the turn of the century. In 2013, Dyson launched a production plant in Singapore
and invested heavily in it.

In 2017, Dyson expanded to Chicago and established the US headquarters there. In 2017, Dyson expanded
within the UK, and finally, in 2019, Dyson moved the company headquarters to Singapore as Asia was the
fastest-growing market and accounted for almost 50% of the company sales. Plus, Dyson wanted to be in
the heat of the battle and be proactive.

The Electric Car Project That Never Was

Being led by one of the world's leading entrepreneurs, Dyson never strays away from taking challenges
head-on and raising the bar. In 2017, the company announced that it has been working on a battery-
powered electric car, which will be launched in 2021.

Dyson set up a budget of around $3 billion for the project, but later on, in 2019, it scraped the project after
incurring heavy losses, saying that the electric cars were not commercially viable. However, it still
continued to work on the battery technology and was quite hopeful that it will play an integral part in
upcoming projects.

Tackling Tricky Waters In 2020

2020 was a year unlike another. Dyson had to let go of 600 people within the UK and 300 overseas as the
Covid-19 pandemic led to a restructuring of the company. With consumer habits rapidly changing and the
world going into lockdown, Dyson had to adapt to how it engaged with customers and catered to their
demands. It did just that. Dyson depicted exceptional operational agility, leadership, innovation, and
commitment to society when it joined forces with Cambridge-based science engineers TTP to produce
ventilators in order to support the healthcare system.

Dyson invested around $24 million of its own money, and around 450 of its employees worked tirelessly
around the clock to design and develop the ventilator – CoVent – in just 30 days as the UK government
had placed an urgent order of 10,000 ventilators from the company. Given the supply disruptions and
uncertainty during the height of the pandemic, Dyson's efforts were commendable.
Although the ventilators were later no longer required, it highlighted the company's willingness to go
above and beyond the call of duty to serve people. Dyson even looked into making the ventilators available
to other countries, but legal and regulatory hurdles meant that it could not do that.

At the same time, Dyson also launched the air purifier – Dyson Pure Humidify+Cool – in the US. It was
engineered to purify the air indoors and ensure health and hygiene.

Why is Dyson so Successful?

Growth By Numbers

Year 2021 2011

Revenue £5.2 billion $1.5 billion

Profit $1.5 billion $440 million

Workforce 14000+ 4000

Countries Operating In 65+ 34+

Following are the five key strategic takeaways from the 3 decade long journey of Dyson:

Figure out a problem and solve it

Be it the wheelbarrows that sunk in the ground and left marks or the vacuum with bags that got clogged
and failed to do the one purpose it was made for - suck and store debris - Dyson figured out the problems
first and then worked on a solution.

By addressing the pain points of people and coming with an effective solution that catered to the issues just
like the Dyson vacuum did, Dyson proved that if you provide value to customers, they'll pay you a
premium.

Persevere in the face of adversity

Whoever you are, whatever you do, and wherever you are located, you are bound to face challenges. From
being rejected by numerous companies who didn't agree to partner up with Dyson to competitors trying to
steal the technology and discredit him, Dyson faced an array of challenges. But he kept at it. Dyson
persevered and achieved success because it wasn't the end result that it was after, but the process it lay
emphasis on.

Innovate as your life depends on its

Dyson truly understands how essential it is to prepare for the future. Be it establishing research centers,
investing billions of dollars in R&D, hiring skilled people, or encouraging people to be creative, Dyson has
done it all in its quest to innovate.

The company realizes that without innovation, it cannot survive, let alone thrive. Hence, it goes the extra
mile to continuously develop new products and find better ways of doing things.
Diversifying the products portfolio, expanding to newer markets, and experimenting and exploring new
options to provide more value to customers are some of the things that Dyson continuously does.

Fail Forward

Dyson failed 5126 times to be exact, before finalizing a vacuum cleaner prototype. The washing machine
had to be discontinued. The robotic vacuum cleaner project didn't really pay off. The electric car project
had to be scrapped. The ventilators the company produced amounted to nothing.

These are just a few of the failures, but they could have easily dismantled any other company. Dyson
learns from failures and makes progress by deriving valuable lessons from them. It highlights the
importance of taking risks, being bold, and not afraid of failing. After all, it's just another opportunity to
make things better.

Formulate a business strategy and stick to it

Hire amazing people, invest, patent, produce quality products, charge a premium - repeat. Dyson works in
a specific way, and that's why it has remained consistent in delighting its customers. Regardless of the
distractions, Dyson remains focused on its mission of making things work better, and it has paid off for the
company handsomely.