Transcript Dyson/Hoover

Hoover’s Folly
Hoover History
• Founded in 1907 by former janitor Murray
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Spanglar, who invented the first “suction
sweeper”
Offers to let customers try the product for free
before purchase.
Used technology to aid war effort in 1942
Today’s product selection includes:
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Uprights
Deep cleaners
Hard floor cleaners
Commercial vacuums
Dyson
• Founded by James Dyson
• Vacuumed his home in 1978 and became
fascinated with the problem of suction
loss.
• After 5 years and over 5,000 prototypes,
he created the first bag less vacuum.
• Attempted to sell his technology; turned
down at every turn.
Dyson (cont.)
• Dyson manufactured his own vacuum
cleaner, the Dyson Cyclone, in 1993.
• Siemens and Electrolux (along with other
companies), tried to stop Dyson from
showing how their vacuums lost suction
(as shown in television commercials and
Dyson-sponsored literature)
Dyson’s Edge
According to this chart, the suction on the Dyson
Cyclone remains constant; whereas the suction
on other vacuums (regardless of bag use)
eventually falls off.
Hoover Rationale
Hoover’s Rationale
• Hoover rejected Dyson’s technology, asserting
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that bags were necessary for vacuums.
Bag less technology means that the filter must
be cleaned every few months; this process acted
as a deterrent to purchasing the technology.
Dyson nearly went bankrupt fighting Hoover
over patent infringement.
In 1999, Hoover created a product that imitated
Dyson. After 18 months, Dyson won against
Hoover UK for patent infringement.
Hoover Vortex
• Hoover introduced the “vortex” technology, so
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similar to Dyson that they returned to court for
patent infringement.
Hoover won the case in 2001. Dyson appealed
and won in 2003.
In 1997, ¼ of all vacuums sold in UK were made
by Hoover.
Now, Hoover has less than 10% of vacuum
cleaner market.
Hoover’s Mea Culpa
• Hoover now admits that they should have
bought the technology in order to keep it
off of the market.
• Dyson’s increased market share indicates
a future of bag less vacuums when the
patent expires.
Mea Culpa (cont.)
• According to Hoover Europe’s Vice-
President Mike Rutter: "I do regret that
Hoover as a company did not take the
product technology off Dyson; it would
have lain on the shelf and not been used".
Why Hoover Rejected Dyson
Technology
• Executives did not believe a bag less vacuum could gain
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significant market share and become a threat.
They believed that consumers would prefer the standard
bag to this complicated machinery:
www.dyson.com
• Hoover’s rejection of Dyson technology was short•
sighted.
Hoover should have purchased the technology and
either:
– Kept the technology out of the mainstream
– Used it to produce superior, bag less vacuums
Hoover’s Current Market Share:
http://www.nitibhan.com/perspective/2006/02/one_look_at_gen.html
Hoover’s Future
• To ensure its survival, Hoover must stay
on top of new technology.
• It must create a department dedicated to
seeking out this technology. This
department should include:
– Marketing experts
– Technology experts
– Executives with decision-making power
Hoover’s Future (cont.)
• The appointed experts should present
their findings to a board capable of
determining the potential threat of new
technology.
• Had this process been followed in regard
to Dyson, Hoover would have purchased
the technology and kept it “on the shelf”.
Works Cited
• (2001 Jan 12). Hoover wins court battle with Dyson.
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Retrieved February 8, 2007, from BBC News Web site:
http://news.bbc.co.uk/2/hi/business/1113990.stm
(2006, Sep 26). Dyson bag less vacuum review.
Retrieved February 8, 2007, from EOpinions.com Web
site: http://www.epinions.com/content_174097337988
(2007). Retrieved February 8, 2007, from The Hoover
Company Web site:
http://www.hoover.com/db/hvrHome.asp
(2005). Dyson Story. Retrieved February 8, 2007, from
Dyson Web site:
http://www.dyson.com/nav/InPageFrame.asp?id=DYSO
N/HIST/HIDE&sinavtype=inpage