Hoover’s Folly

Hoover History Founded in 1907 by former janitor Murray 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: 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 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 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 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 Current Market Share: 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. 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=DYSON/HIST/HIDE&sinavtype=inpage