Johnson, Whittington and Scholes, Exploring Strategy, 9th Edition, Instructor's Manual

• Avoid long lists. For example, the lists in Illustration 3.5 of main strengths and mainweaknesses would have been refined from a much longer list through a process of debateand some redefinition and grouping. This process of debate is valuable in itself.

• Explain the relationship between these main areas of strengths or weaknesses and the keyissues in the environment. There is a danger that these end up as two separate lists and thematrix shown in Illustration 3.5 fails to ensure that the connections are made.

• Recognise that individual factors may be either a strength or a weakness, depending on thechoice of strategies.

• State priorities and weightings given to individual factors - again through the process ofusing the matrix.

• Consider how they would use what emerges from the SWOT analysis for purposes ofstrategy evaluation and in particular the screening of options for suitability (see Section 1.2of Chapter I I).

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In summarising answers to the question, it can be useful to ask students to explain in two orthree sentences their overall assessment of the organisation's position. This is a good test as towhether or not the points above have been addressed properly.

Case Example

Dyson

General learning objectives for this case might include the following:

i) Applying the notion of strategic capabilities to a distinctive manufacturing company withglobal sales as well as design and manufacturing in a number of countries in order todiscern the reasons for its success.

ii) Considering which strategic capabilities are distinctive and sustainable.

,.,.",., iii) Debating and if possible distinguishing, between innovation, leadership and capabilities increating long-term sustainable success.

Question I: Analyse the strategic capabilities of Dyson

Typically a student would use the competencies framework, which when compiled might looksimilar to the example given below.

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Johnson, Whittington and Scholes, Exploring Strategy, s" Edition, Instructor's Manual

Threshold Resources Threshold Competencies

• engineering design equipment • general managerial skills including

• product suppliesdistribution and marketing

• engineering design skills• manufacturing space• cost control through manufacturing in• offices and facilities low-cost locations

• appropriate personnel quality assurance and control•• sufficient customers the ability to attract customers•

sufficiently inspired by design to paypremium prices across different markets

Distinctive Resources Distinctive Competencies

• James Dyson himself • inspirational leadership around the

• the Dyson brand and strategy of high-endvalue of engineering

products in an otherwise staid market • design engineering skills that transformsector ideas into viable products

• an HQ building and related laboratories • the competence to make engineeringdesigned to foster innovation aesthetically attractive

• product portfolio and associated patents • seamless value chain despite design

• high R&D budget possibly through beingand manufacturing being in different

privately ownedlocations

• being one step ahead of competitors• history of the company used extensively attracting early adopter customers andin PR and advertising subsequent followers including premium

• ownership of the manufacturing facilities pricingand hence control over the working • never being boring; always beingconditions of the employees versus other surprisingcompanies that contract out theirmanufacturing and can be accused ofsupporting poor labour conditions

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Critical reflection on the choice and subsequent use of these tools to produce insights should bepromoted. For example:

Activity mapping or value chain analysis might also be used for Question I. If usedimaginatively, both help explain where and how capabilities are developed, employed andmanaged. They can also help indicate why and how distinctiveness might arise.

• Why did students choose the particular framework they used over alternatives?

• Show them that analysis per se is not an end in itself; that analysis is done either to answerquestions such as the ones that follow or to create questions. Asking the students in whatsituation such an analysis might actually be used by managers relates the exercise to thepractise of the senior manager.

• Ask what actions managers might take as a result of undertaking such an analysis.

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Johnson, Whittington and Scholes, Exploring Strategy, s" Edition, Instructor's Manual

Question 2: Imitatability of capabilities

The temptation here is to list all capabilities rather than focus on those that are truly distinctiveand which therefore confer competitive advantage. Performing the analysis to differentiate corefrom threshold in Question I goes some way to avoid this pitfall. Performing an activity orvalue chain analysis of competitors, including a fictional new start-up and overlaying that ofDyson, might also help in this regard.

Students should be encouraged to use the VRfN criteria.

V: Clearly many of the capabilities Dyson has are valuable, including many that are thresholdcapabilities rather than being especially distinctive.

R: Arguably it is not the products themselves that are rare; competitors have been busy imitatingthem. Other capabilities are however arguably evident, especially their distinctive innovativeculture, in the day-to-day activities of managers, including Dyson himself ..,I: Inimitability is more likely to be the result of these linked activities within Dyson that aredifficult for competitors to make sense of. Students might also ask how easily a competitorcould imitate Dyson, given so much of what Dyson is now, is a function of choices it made inthe past including the story of James Dyson himself?

N: It is difficult to predict the threat of substitution; after all, Dyson's own innovativetechnology has substituted for the more conventional technology of some of its competitors. Nodoubt, Dyson management would argue that their innovative culture helps protect them fromthis: is that a reasonable belief?

Question 3: Threshold capabilities

Consideration also needs to be paid to the dynamic aspect of capabilities - that what might beunique today is unlikely to be so tomorrow. Interestingly, with Dyson, its capabilities seem tohave stood the test of time. For certain few, if any, companies have launched ahead of Dyson,most if all seem to copy Dyson. Instead competition does seem to be speeding up the rate atwhich it supplies products not dissimilar to Dyson's and perhaps cheaper or slightlyconventional looking versions appealing to more customers. Docs Dyson therefore have tospeed up the process by which new products arc launched because sales of previously launchedproducts are being eroded by copies?

(Note that Dyson does seem to have a strategy of being the first in the market as regards salesvalue rather than numbers sold. No other competitor seems to be able to imitate Dyson's pricepremium. Why might owning a Dyson be so attractive?)

However, might Dyson's ability to produce products that look attractive wane over time?

Question 4: How crucial is Sir James Dyson?

As of 2010, James Dyson is stepping down as Chairman, with the ex-head of British AirwaysBob Ayling, a board member of long-standing taking over. Later that year he confirmed that hewould, however, retain a role focused on innovation.

This question raises the issue of the extent to which this case is truly about innovation and/orabout leadership. Whilst these are both capabilities themselves, the question opens up the debate

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Johnson, Whittington and Scholes, Exploring Strategy, 9th Edition, Instructor's Manual 1as to whether the concept of inimitable bundles of capabilities, that therefore by definitioncannot easily be defined or accessed, is an overly complex false dawn.

Alternative answers to the company's success therefore might lie in the innovative culture of thecompany or might lie in James Dyson's leadership style which is hands-on and intrinsically partof an internal brand that will outlive his involvement. Dyson's children are currently involved inother sectors. Dyson himself is becoming ever more involved in (re)making engineering anational competence in the United Kingdom.

A personal note (from Jill Shepherd)

I started this case convinced that Dyson did have something very unique in terms of how itmerged hard 'grey' engineering with bright 'orange and yellow' funky design that made theproducts both highly functional and pleasing to the eye. Looking at the products of competitorsmade me less convinced that this was the case. Certainly, I do not like the way not-so-cleanwater collects in the bottom of the hand dryer, something that does not happen with thecompetitor's product! And there is the price of the fan - it does cost a lot more as internetreviews tell you, but then all Dyson products are high-end.

I moved to thinking it was more simple - the aura around the company and its products allow itto command a price premium, and that innovation in terms of being first to market was core toachieving that price premium. Who creates this aura - well Dyson himself through his well-timed appearances in the press? There might also be something around its niche status. All othercompanies do and sell many more products. Is buying a Dyson the equivalent of staying at aboutique hotel rather than a chain? Or is it akin to buying an 'exclusive' scarf from a local craftstall hand knitted locally versus one from a retail store that still looks hand made, when both areequally warm?

So my end point - Dyson's original and unchanged strategy of bringing exclusivity to a marketpreviously not subject to the vagaries of retail is what drives success. Some people will alwayspay more to be different and ahead of the crowd even when it involves as mundane an object asa vacuum cleaner.

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