The Meaning Of Dysons Intellectual Property Commerce Essay

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After providing key facts about the inventor and his early innovations, I will explain the type of innovation, how it arose, and what standards it set. The timing of entry and the meaning of Dysons intellectual property will be followed by concluding with the business model of the product.

Overview and historical background

James Dyson, born in 1947 in Cromer, England, is an industrial designer and the founder of the Dyson Company. While he was a student at London's Royal College of Art he co-invented the Sea Truck, a flat-hulled, high-speed watercraft which could land without a harbour, sales of which amounted to 500 million US$. Later, he launched a modified wheelbarrow with a ball replacing the wheel in order to stabilize and stop it sinking into soft ground, called the Ballbarrow. In the 1970s, Dyson, who "just wanted things to work properly", began to develop cyclonic separation in order to create a bagless vacuum cleaner that would not lose suction as it cleaned. Thanks to the adaption of the technology used in his factory's spray-finishing room, and after having built more than 5000 prototypes, his pink G-Force cleaner was ready to be introduced to the European market (Dyson, 2012). None of the established vacuum cleaner manufacturers were interested in the disruptive technology because they were afraid of losing the business of replacement cleaner bags.

Dyson finally managed to sell a license to Apex, a Japanese manufacturing company. Although technological products were springing up like mushrooms in this country, his invention was a complete success, and his product paid for itself; the Japanese were so impressed by his product that the G-Force became a status symbol with a retail price of US$ 2,000 per unit. After his success in Asia, he invested the earnings from the license to set up a company and began to manufacture and distribute his own products in Europe.

His success continued with the further development of his vacuum cleaner, the DC 01, which became the biggest selling vacuum cleaner in the UK in just 18 months. Up to the present day, Dyson has launched six more vacuum cleaner models and started to create other air powered devices, such as the Air Multiplier bladeless fan, the Dyson Hot, a bladeless fan heater, and the Airblade, a model of electric hand dryer [1] . In 2011, the company generated revenues of one billion British Pounds (Kamal, 2012).

The Dyson Airblade

While exploring ways to use the technology of the vacuum cleaners, the design team combined its technology with a so called air knife, the structure of which forces air through a very small space in order to reach high exit speeds. Dyson and his engineering team started to develop a hand-drying solution for public restrooms which had to both be more effective and energy efficient.

"You put your hands under other dryers, rub them a bit, then give up and wipe your hands on your trousers. It's something that's always annoyed me." (James Dyson)

The Dyson Airblade, launched in 2007 in Europe, is an electric hand dryer which differs from other conventional hand dryers through its drying technology. While common hand dryers use a wide jet of heated air to clean hands by evaporating humidity, the Airblade bundles a sheet of unheated air travelling at 400 miles per hour to scrape the remaining water from the hands. This technology enables a person to dry their hands in 10 seconds. Through its special digital motor, which spins at 81,000 times a minute, energy savings of 83% in comparison to conventional hand driers can be reached. In addition, the Dyson Airblade filters incoming air to remove 99.9% of bacteria before it reaches the hands of the user. The Dyson Airblade hand dryer is currently being used in hospitals, offices, schools and public buildings in 34 countries (Dwell, n.d.).

Innovation definition, types and patterns

The Dyson Airblade is a further development to an existing product. The common hand dryer, which was invented in 1948 by George Clemens, is widely available and seemed to be much more environmentally friendly than using paper towels. Both the production and the waste disposal of paper towels are cost intensive, and therefore the introduction of hand dryers seemed to be logical to a eco-friendly and sustainable use of recourses (Smithers, 2011). However, many people have reported poor experiences with hand dryers, followed by studies which indicate high consumption of electricity and dramatically increased bacteria counts (Snelling, 2012). For that reason, facilities provided paper towels in addition to existing hand dryers, which again resulted in higher energy use.

Dyson managed to create a product innovation which shows significant improvements in both technical specifications and functional characteristics. Regarding the internal dimension, his incremental innovation is built on the knowledge and experience within his own company, meaning it is competence-enhancing. The external dimension differentiates the Airblade based on the technological improvement and the impact upon market competitiveness. In this case, the existing products on the market, such as paper towels and hand dryers, remain competitive because the Airblade - even though it has more advantages than its substitutes - involves modest technological changes. It is not a completely new product which changes the way of drying hands. Another crucial reason for defining the innovation as incremental is Dyson´s approach to increased customer satisfaction, which seemed to be lacking when taking current products into consideration.

The Airblade can be further described as a modular innovation. It required new knowledge for many components, but both the core design concepts and the architectural knowledge remained unchanged. Customers do not have to adapt to the new technology and can go on using a hand dryer as they did before, making it reasonable to invest in Dysons sustaining technology. The inventor neatly evades the problem that companies do not invest in disruptive technologies and might be left behind. (Christensen, 2011).

The technology life-cycle for the Dyson Airblade is, in my opinion, enviable due its protracted maturity phase. Despite the long R&D phase, which was both cost and time consuming, out-of-pocket costs have been recovered in the ascent phase and the gain of the product is high and stable for a long time.

The reason for this argument is that as yet there is no other innovation which has the excessive advantages to the Airblade which might reduce the fortune and the utility of the technology (e.g. through lower noise pollution or better drying results).

Sources of innovation

James Dyson is an innovator who permanently seeks to improve the quality of life, and he invents and designs his products based on his own ideas and presents them to the public. There was no real demand for a new hand drying device, but as soon as people experienced Dysons innovation, they realized that even facile products can be distinctly improved. Indeed, this technology-push approach does not lead to a radical innovation breakthrough in my opinion; it is rather crucial for Dysons success.

Thomas Edison famously said, "I haven't failed, I've just found 10,000 ways that won't work." (Israel, 2000). This is also suitable for the Dyson Company, where engineers built more than 200 prototypes of the Airblade before reaching the final version. They benefit a lot from having a practically unlimited budget, as this reduces the impact of things such as the air nozzle parts for just one machine which cost US$13,050. It took a lot of failures to find the right balance between pressure and airflow in order to achieve a perfect result (Dwell, n.d.).

The number of failures might have been lowered by using external ideas or open innovation in order to advance their technology and profit from other innovations. Many companies share their Intellectual Property through licensing, joint ventures or spin-offs (Chesbrough, 2005). I believe that there were two major factors which were disabling Dyson from simplifying the innovation process of the Airblade. First, there was no existing technology which might have led to the same results (the Mitsubishi Air Towel will be discussed later), and second, there was simply no need for cooperating with other organizations, as Dyson has his own R&D department which already belongs to the best in this sector of business.

The Airblade is a product whose unique feature is its technology rather than its new appearance. Dyson might have also followed customer advice and feedback, but only to a certain point. The Airblade was not completely customer-led because he followed his own instinct rather than being misled by complaining customers. Through his product, he showed them what they were looking for and was vital in leading to the improvement of the hand drying experience.

Standards battles & design/technological dominance

The hand dryer industry did not face any relevant changes regarding technology till 1993, when Mitsubishi introduced the Jet Towel [2] , which also uses accelerated air to wipe water from the hands and is additionally equipped with an optional heating element [3] .Certainly more hand dryers have been developed since the launch of the Airblade, but they are not that popular and did not come out on top [4] .

I believe that Dysons Airblade not only sets a high standard for hand drying devices, it also became a status symbol of companies and other organizations (similar to the G-Force vacuum cleaner in Japan). For this reason, and by virtue of its sophisticated technology, Dyson locks other hand dryer manufactures out. Nevertheless, from my point of view there is still time and greater success needed in order to become dominant in this field as people still react by saying things like, "There is an Airblade in this lavatory," rather than saying "Why do they still have old hand dryers?". As there was no standard for vertical hand dryers, Dyson was entering an almost blue ocean which had previously been entered by Mitsubishi. He managed to persuade customers to invest in the Airblade despite the high switching costs in comparison to paper towels or common hand dryers. The Airblade AB03 device costs around 1000 Euros in Europe and 1300 USD in the United States of America, while a "normal" hand dryer is available from 170 Euros or 200 USD respectively [5] . Another major advantage for the customer is the fact of non-existent complementary goods (except operating and maintaining costs) which come with the purchase of an Airblade. There is no product which needs to be added to the hand drying device in order for it to be operated.

In terms of the network effect, I believe that it only plays a minor role in the case of this innovation. Although there is no effect on the total perceived value of the innovation itself generated by a strong network, it seems to be in coherence with the learning effect regarding maintenance and customer support. The more Airblade devices are used, the better the service quality can get due to increasing repetitions and routine.

Timing of entry

Due to the fact that James Dyson invented a new technology for drying hands to an existing product (common hand dryer/Mitsubishi Jet Towel), I consider the innovator to be a second mover. Through his advance to possible duplicators of his product, he had a big benefit regarding the experience curve. If we assume that competitors started to produce their models two years after Dyson, he could already decrease costs associated to the Airblade within this time as he had increased experience in the production process (increased productivity). Furthermore, reputation was already increased to a certain level, while the competitor's level of trust has still to be proven. Taking the resources which are needed to build an Airblade into consideration, he had the advantage of the pre-emption of scarce resources. For example, the material used for the HEPA filter which is used in every Airblade might increase significantly if a competitor would also need these materials to build a similar product. I consider several factors to be crucial for his optimal timing of entry:

The improvements provided by the Airblade compared to previous solutions were enormous and customer preferences were met.

Enabling technologies were all developed by the Dyson Company itself and were known to be mature enough.

Public buildings, company buildings, restaurants and many other establishments provide restrooms and lavatories which are all potential "complementary goods" to the innovation. Airblades will always be located close to a sink, which is the basic requirement for the technology. Therefore, there are a vast number of places where the innovation could be used.

As the Dyson Company is already generating profits through other products such as vacuum cleaners, they have another main pillar to rely on should the Airblade fail or not pay itself in the beginning. Early losses would not be a reason to fail, and instead they could be another opportunity to improve the technology or marketing strategies.

The firm has already proved that customers can rely on the high quality and useful innovation of their products, so it is likely that customers (as well as suppliers and distributors) would trust new innovations and would be ready to invest in it.

The only point which might not affect the timing of entry but is in many cases crucial to success or failure would be the threat of competitive entry. As there was already a similar product, it might be possible that another technology would be introduced right after the Airblade, bringing along more features or a more competitive purchase price.

Intellectual property

James Dyson, whose company holds more than a third of the United Kingdom marketplace in the field of vacuum cleaners, patented more than 1300 parts and products (Singapore, n.d.). He admits that his clear strategy is to protect all of the company inventions and he is willing to pay a considerable amount of money per year on patent renewals. Patents apply to inventions with business applications and are granted by the Government to an inventor. This means that the owner of the patent has the right to stop other organisations from producing, using or selling the invention without permission. Nevertheless, any company could use the technology Dyson invented when its patents expire. For this reason, Dyson protects his improvements as well as the fundamental technology, which means that competitors would have to resort to old technology in an attempt to imitate its products. A major disadvantage of the patent model is that products can be replicated in other territories legally. Therefore, patents need to be applied for in the patent offices in the relevant countries, which is cost intensive and needs professionals.

Dyson employs a team of in-house IP and patent experts who on average patent a new assembly part, design or even a finished product every day. His first major conflict arose due to a patent infringement by Hoover, a highly competitive company which developed an item that looked remarkably similar to his cyclone vacuum cleaner. After three years in court the product was removed from the market, and in addition Hoover had to pay four million British Pounds in compensation.

With regards the Airblade, Dyson listed 39 patents and design applications [6] . The name and its font "Airblade" are registered as a trademark, and this prevents competitors from using it for their products. Also, the heart of the innovation, the Dyson digital motor, is patented. Engineers spent seven years developing it, leading to a high performance part lasting four-times longer than ordinary motors. It is used in all Dyson cordless machines and is therefore highly valuable to the company. It is easy to understand why Dyson wants to stop others using the technology which he invested a lot of money and intellectual property to design.

Dyson considers IP to be the lifeblood of his company and crucial to them being competitive with low cost producers from China. In his opinion, customers are more likely to pay for his products if there is a distinct benefit over other, less developed technology from competitors. Consequently, he can only charge more if he can provide something which others cannot (Lohr, 2011). Dyson believes that with a Europe-wide patent, intellectual property would be safer and patents easier to file. In his opinion, there should be a system which solves the problem of language barriers and lack of knowledge about law in certain areas. At the moment, patents have to be translated and filed in each country. In the case of violation of patent rights, the process is held in the country of violation, which often causes a lot of difficulties for the initial inventor and can easily exceed the million Dollar line (CNN, 2011).

Business model & business model innovation

The Dyson company has efficient online retail stores which are responsible for distribution functions. The products can be purchased either online on the Dyson homepage or via retailers (both on- and offline). This bricks and clicks business model cannot be applied to the Airblade because the product is mainly designed to be sold to businesses, and this results in a solely online- and telephone distribution process. Due to the high price and the small number of hand dryers used at private homes, only three per cent of total sales are credited to households (Dyson, 2012).

An own department in charge of B2B sales claims that the Dyson Airblade hand dryer is the fastest hand dryer (Dyson, 2012) on the market. It will dry hands in around 10 seconds by blowing the remaining water off. In addition, it uses up to 80% less energy than warm air hand dryers. Its yearly operating costs are dramatically low (35 US$) in comparison with warm air dryers (181 US$) and paper towels (1460 US$), which in addition create much more waste than the Airblade. In terms of hygiene, a HEPA filter is used to eliminate 99.9% of bacteria that may be present in the air at the time while someone is drying their hands.

These benefits are crucial for creating value for the customers compared to conventional hand dryers or paper towels. Dysons distinct value architecture creates the excitement of customers in a productive way by using high quality material paired with new technology. As a matter of fact, customers are ready to pay higher prices for such products. I believe that the Airblade is a paragon for the optimum mixture of differentiation, trend and focus. While keeping pace with today's requirements (faster, better, cheaper), it differs from other products in terms of usability and productivity and strongly focuses on user benefits.

R&D is a key part of the business model: almost 50 per cent of the profits are reinvested in the research and development projects in order to help sustain growth. A microbiology lab approaches a new business model by focusing on the study of allergens in order to identify ways they can be eliminated from customers' homes using Dyson technology. The value chain is enhanced by locating the manufacturing base close to suppliers, which additionally reduces costs and increases the potential competitive advantages for the company.