A Case Study of New Product Development on Basis of

“Dyson, Hoover and bag less vacuum

cleaner ”

A Case Study of New Product Development on Basis of

“Dyson, Hoover and bag less vacuum cleaner ”

Prepared forMr. Sagib Kumar Ghosh

Course Instructor

Prepared byNeelima Kamrunnahar 1113280694

Nigar Sultana 1113280695

Program: MBA (1 yr)- Major in MarketingFaculty of Business Studies

Premier University

About the Company

At a Glance

Founder of the

Company

Sir James Dyson

Summary of the Case

All About Vacuum Cleaner.Problems of old model Vacuum Cleaner.Dyson took the initiative.Introduce Bag less Vacuum Cleaner.Offered the design to the int. marketers but turn him down.

Got the success on 1992 for some reasons:It is made of modern tools that are applied for manufacturing its suction pipes. As a result it goes to the core and cleans dust particles.Most eye catching and stylish design.There is no need of buying vacuum bags.The filters are washable and will never get destroyed by the effect of water.The dusts that are exhausted are anti-allergic.Its updated ball bearing activity helps to move the suction pipe more swiftly and in all direction.

Q: 1

• How can businesses try to ensure that heir senior managers (both buyers and new business development managers) do not dismiss exciting technology and with it potentially profitable business?

Ans: 1Senior managers of new business development have the ability to detect exciting technologies and always concern about the new business opportunities. Opportunity identification comes from different sources like existing products, individuals, brainstorming, customers, vendors, unexploited patent and technology.Managers can use competitive intelligence for their long and short term plans. Senior managers also collect information from media and patent office about new technology.They can take effective decision about the exciting technology by analyzing information through NPD process.

Q: 2

• How can governments try to assist inventors like Dyson and ensure that more innovations succeed in their country, thereby developing their economic base?

Ans: 2Dyson did not get any help from the government that is government refused his proposal for grant and did not lend him money. Dyson did not stop his effort but this type of attitude of government discourage potential inventors to innovate more and it is an obstacle in developing a country’s economic base as innovation is the key to success. Government can assists inventor like the following ways:

Firstly, by providing financial support that includes loans, tax exemption, subsidies and grants.Secondly, by providing necessary information related to invention from patent office.

Q: 3

•What is the role of patents? To what extent is it an effective system for protecting intellectual property?

Ans: 3Patent: Patent is an exclusive right that grant inventors ownership of their original ideas, give them temporary control over who can use those ideas.The role of patent: The major roles that a patent plays are:1. Patent grants inventors to have their ownership

over their invention.2. Patent gives inventors an opportunity to profit

from their creations.Patent is an effective system for protecting intellectual property.Patent gives the right to sue against those who infringed his/her patent.

Q: 4

• Explain the rational behind Electrolux and Hoover's decision not to purchase the license from Dyson. Given Hoover's recent development of the Triple Vortex vacuum cleaner how do you assess this decision? What level of royalty would have been reasonable for both parties, that is, Dyson and Hoover?

Ans: 4

Electrolux & Hoover was known brand.Consumers were satisfied with Electrolux & Hoover. Dyson was non-brand appliances.Manufacturers tried to avoid risk.As Dyson's volume of sales (33.5%) that is greater than Hoover's sales volume (12.3%). That's why it is rational to pay more royalty to Dyson than Hoover.

Q: 5

•Why is negotiating a license for a new so difficult?

Ans: 5Firstly, Amount of money that a licensee agreed to pay may not match with licensor's expectation.Secondly, Trust is another significant element that creates difficulties when inventors are in doubt about the licensing agreement.Companies do not agree to pay that amount of money for licensing and he was uncertain about licensing money received reflect the true sales figure or not. The required operational changes are too great.

Conclusion

Dyson is now a legendary company in vacuum cleaner industry. There were already a number of competitors in vacuum cleaner industry when Dyson came with his new product. This case shows though Dyson charged twice price than that of existing products but still his product was able to capture more than 50% of the U.S market in less than four years only because of new product development with introduction of centrifugal force technology.