Dyson

From a head-on perspective, it has a sleek, stunning stainless steel design. With wings that extend
downward at a 15-degree angle from its center, it appears ready for takeoff—the latest aeronautic design
from Boeing? No.It’s the most innovative sink faucet to hit the market in decades. Dyson Ltd.—the
company famous for vacuum cleaners, hand dryers, and fans unlike anything else on the market—is about
to revolutionize the traditional faucet. The Airblade Tap—a faucet that washes and dries hands with
completely touch-free operation—is the latest in a line of revolutionary Dyson products that have
reinvented their categories. In fact, Dyson was founded on a few very simple principles. First, every
Dyson product must provide real consumer benefits that make life easier. Second, each product must take
a totally unique approach to accomplishing common, everyday tasks. Finally, each Dyson product must
infuse excitement into products that are so mundane that most people never think much about them.

James Dyson was born and raised in the United Kingdom. After studying design at the Royal College of
Art, he had initially planned to design and build geodesic structures for use as commercial space. But with
no money to get his venture started, he took a job working for an acquaintance who handed him a blow
torch and challenged him to create a prototype for an amphibious landing craft. With no welding
experience, he figured things out on his own. Before long, the company was selling 200 boats a year
based on his design. That trial and- error approach came naturally to Dyson, who applied it to create
Dyson Inc.’s first product.

In 1979, he purchased what its maker claimed was the most powerful vacuum cleaner on the market. He
found it to be anything but. Instead, it seemed simply to move dirt around the room. This left Dyson
wondering why no one had yet invented a decent vacuum cleaner. At that point, he remembered
something he’d seen in an industrial sawmill—a cyclonic separator that removed dust from the air. Why
wouldn’t that approach work well in vacuum cleaners? “I thought no one was bothering to use technology
in vacuum cleaners,” said Dyson. Indeed, the core technology of vacuum motors at the time was more
than 150 years old. “I saw a great opportunity to improve.” Dyson then did something that very few
people would have the patience or the vision to do. He spent 15 years and made 5,127 vacuum prototypes
—all based on a bagless cyclonic separator— before he had the one that went to market. He said, “There
were 5,126 failures. But I learned from each one. That’s how I came up with a solution.”

Dyson’s all-new vacuum was far more than technogadgetry. Dyson had developed a completely new
motor that ran at 110,000 revolutions per minute—three times faster than any other vacuum on the
market. It provided tremendous suction that other brands simply couldn’t match. The bagless design was
very effective at removing dirt and particles from the air, and the machine was much easier to clean out
than vacuums requiring the messy process of changing bags. The vacuum also maneuvered more easily
and could reach places other vacuums could not. Dyson’s vacuum really worked. With a finished product
in hand, Dyson pitched it to all the appliance makers. None of them wanted it.

So Dyson borrowed $900,000 and began manufacturing the vacuum himself. He then convinced a mail-
order catalog to carry the Dyson instead of Hoover or Electrolux because, as he told them, “your catalog
is boring.” Dyson vacuums were soon picked up by other mail order catalogs, then by small appliance
chains, and then by large department stores. By the late 1990s, Dyson’s full line of vacuums was being
distributed in multiple global markets. At that point, Dyson, the company that had quickly become known
for vacuum cleaners, was already moving on to its next big thing.

During the development of Dyson’s vacuums, a development model began to take shape. Take everyday
products, focus on their shortcomings, and improve them to the point of reinvention. “I like going for
unglamorous products and making them a pleasure to use,” Dyson told Fortune magazine. By taking this
route, the company finds solutions to the problems it is trying to solve.
At the same time, it sometimes finds solutions for other problems. For example, the vacuum motor Dyson
developed sucked air with unprecedented strength. But the flipside of vacuum suction is exhaust. Why
couldn’t
such a motor blow air at wet hands so fast that the water would be pressed off in a squeegee-like manner,
rather than the slow, evaporative approach employed by commercial hand dryers? With that realization,
Dyson created and launched the Airblade, a hand dryer that blows air through a 0.2-millimeter slot at 420
miles per hour. It dries hands in 12 seconds, rather than the more typical 40 seconds required by other
hand dryers. It also uses cold air—a huge departure from the standard warm air approach of existing
commercial dryers. This not only reduced energy consumption by 75 percent—a major bonus for
commercial enterprises that pay the electric bills—but customers were much more likely to use a product
that worked fast and did the job right.

With very observable benefits, the Airblade was rapidly adopted by commercial customers. Today’s
Airblades have evolved, guided by Dyson’s customercentric approach to developing products. With the
first Airblade, it was apparent that all that high-powered air is noisy. So Dyson spent seven years and a
staggering $42 million to develop the V4 motor, one of the smallest and quietest commercial motors
available. The new Airblade is quieter and almost six pounds lighter than the original. But even more
advanced is Dyson’s new Blade V, a sleeker design that is 60 percent thinner than the Airblade,
protruding only four inches from the wall.

Although Dyson sees itself as a technology-driven company, it develops products with the end-user in
mind. But rather than using traditional market research methods, Dyson takes a different approach.
“Dyson avoids the kind of focus group techniques that are, frankly, completely averaging,” says Adam
Rostrom, group marketing director for Dyson. “Most companies start with the consumer and say, ‘Hey
Mr. or Mrs. X, what do you want from your toothbrush tomorrow or what do you want from your
shampoo tomorrow?’ The depressing reality is that you often won’t get many inspiring answers.” Rather,
Dyson uses an approach it calls “interrogating products” to develop new products that produce real
solutions to customer problems. After identifying the most obvious shortcomings for everyday products,
it finds ways to improve them. Dyson’s philosophy is so focused on solving customer problems, he even
developed the James Dyson Award—the top prize at an annual contest that challenges college students to
design something that solves a problem. Once a problem-centered design is in place, the company then
tests prototypes with real consumers under heavy nondisclosure agreements. In this manner, Dyson can
observe consumer reactions in the context of real people using products in their real lives. This approach
enables Dyson to develop revolutionary products like the Air Multiplier, a fan that moves large volumes
of air around a room with no blades. In fact, the Air Multiplier looks nothing like a fan. By using
technology similar to that found in turbochargers and jet engines, the Air Multiplie rdraws air in,
amplifies it 18 times, and spits it back out in an uninterrupted stream that eliminates the buffeting and
direct air pressure of conventional fans. Referring to the standard methods of assessing customer needs
and wants, Rostrom explains, “If you . . . asked people what they wanted from their fan tomorrow, they
wouldn’t say ‘get rid of the blades.’ Our approach is about product breakthroughs rather than the
approach of just running a focus group and testing a concept.

At Dyson Ltd., innovation never ends. On a daily basis, James Dyson collaborates on top secret projects
—many of them 5 to 10 years away from completion—with a sample of the company’s army of
designers and engineers. Its newest vacuum cleaner—the DC59 Animal—is yet another example of how
Dyson’s innovation cycle continues. It’s cordless, weighs less than five pounds, is designed to be
handheld, and boasts three times the suction of any other handheld vacuum on the market— cordless or
not. The company is not only continuing to demonstrate that it can come up with winning products again
and again, it is expanding throughout the world at a rapid pace. Dyson products are sold in over 50 global
markets, selling well in emerging economies as well as developed first-world nations. Dyson does well in
both economic good times and recessionary periods. From a single vacuum cleaner to what Dyson is
today in less than 20 years—that’s quite an evolution.

Sony
With all the hype these days about companies like Apple, Google, Amazon, and Samsung, it’s hard to remember
that companies like Sony once ruled. In fact, not all that long ago, Sony was a high-tech rock star, a veritable
merchant of cool. Not only was it the world’s largest consumer electronics company, its history of innovative
products—such as Trinitron TVs, Walkman portable music players, Handy cam video recorders, and PlayStation
video game consoles—had revolutionized entire industries. Sony’s innovations drove pop culture, earned the
adoration of the masses, and made money for the company. The Sony brand was revered as a symbol of innovation,
style, and high quality.
Today, however, Sony is more a relic than a rock star, lost in the shadows of today’s high-fliers. While Sony is still
an enormous company with extensive global reach, Samsung overtook the former market leader as the world’s
largest consumer electronics company a decade ago and has been pulling away ever since. Likewise, Apple has
pounded Sony with one new product after another. “When I was young, I had to have a Sony product,” summarizes
one analyst, “but for the younger generation today it’s Apple.” All of this has turned Sony’s “Make. Believe.” brand
promise into one that is more “make-believe.

Sony’s declining popularity among consumers is reflected in its financial situation. For the most recent year,
Samsung and Apple each tallied revenues exceeding $170 billion—more than double Sony’s top line. Samsung’s
profits have surged in recent years while Sony’s losses reached catastrophic levels. And whereas stock prices and
brand values have skyrocketed for competitors, Sony’s have reached new lows. Adding insult to injury, Moody’s
Investors Service recently cut Sony’s credit rating to “junk” status.

How did Sony fall so hard so fast? The answer is a complex one. Sony never lost the capabilities that made it great.
In fact, throughout the past decade, Sony was poised to sweep the markets for MP3 players, smartphones, online
digital stores, and many other hit products that other companies have marketed successfully. But Sony was caught in
the middle of a perfect storm of environmental forces that inhibited its growth and success. Some factors were
beyond Sony’s control. However, at the core of it all, Sony took its eye off the market, losing sight of the future by
failing to adapt to important changes occurring all around it.

Hit on all Sides

For starters, Sony fell behind in technology. Sony built its once mighty empire based on the innovative engineering
and design of standalone electronics—TVs, CD players, and video game consoles. However, as Internet and digital
technologies surged, creating a more connected and mobile world, standalone hardware was rapidly replaced by new
connecting technologies, media, and content. As the world of consumer entertainment gave way to digital
downloads and shared content accessed through PCs, iPods, smartphones, tablets, and Internet ready TVs, Sony was
late to adapt. Behaving as though its market leadership could never be challenged an arrogant Sony clung to
successful old technologies rather than embracing new ones. For example, prior to the launch of Apple’s first iPod
in 2001, Sony had for three years been selling devices that would download and play digital music files. Sony had
everything it needed to create an iPod/iTunes-type world, including its own recording company. But it passed up
that idea in favor of continued emphasis on its then highly successful CD business. “[Apple’s] Steve Jobs
figured it out, we figured it out, we didn’t execute,” said Sir Howard Stringer, former Sony CEO. “The music guys
didn’t want to see the CD go away.”
Similarly, as the world’s largest TV producer, Sony clung to its cherished Trinitron cathode-ray-tube technology.
Meanwhile, Samsung, LG, and other competitors were moving rapidly ahead with flat screens. Sony eventually
responded. But today, both Samsung and LG sell more TVs than Sony. Sony’s TV business, once its main profit
center, has lost nearly $8 billion over the last 10 years. Recently, in an effort to get back on its feet, Sony spun off its
TV division into a standalone unit. But it faces a daunting uphill battle in a competitive landscape that is far different
from the one in Sony’s heyday. Not only does Sony continue to lose market share to Samsung and
LG, but Chinese TV makers such as Haier, Hisense, and TCL are producing cutting edge flat panel offerings with
a cost advantage that significantly undercuts Sony.
It was a similar story for Sony’s PlayStation consoles, once the undisputed market leader and accounting for one
third of Sony’s profits. Sony yawned when Nintendo introduced its innovative motion-sensing Nintendo Wii,
dismissing it as a “niche game device.” Instead, Sony engineers loaded up the PS3 with pricey technology that
produced a loss of $300 per unit sold. Wii became a smash hit and the best-selling game console; the PS3 lost
billions for Sony, dropping it from first place to third.
Even as a money loser, the PlayStation system, with its elegant blending of hardware and software, had all the right
ingredients to make Sony a leader in the new world of digital entertainment distribution and social networking.
Executives inside Sony even recognized the PlayStation platform as the “epitome of convergence,” with the
potential to create “a fusion of computers and entertainment.” In other words, Sony could have had a strong
competitive response to Apple’s iTunes. But that vision never materialized, and Sony has lagged in the burgeoning
business of connecting people to digital entertainment.

There are plenty of other examples of Sony’s failure to capitalize on market trends despite the fact that it had the
products to do so. Consider the Sony MYLO (or MY Life Online), a clever device released a year before the first
iPhone that had the essence of everything that would eventually define the smartphone—a touch screen, Skype, a
built-in camera, even apps. Or how about the long line of Sony Reader devices, the first of which was released a
year before Amazon took the world by storm with its first Kindle.

As Sony awoke to the reality of flattening revenues and plummeting profits, efforts were made to turn things around.
In 2005, then- CEO Stringer moved in to put Sony back on track. To his credit, Stringer made
a credible effort to reignite the company, developing a turnaround plan aimed at changing the Sony mindset
and moving the company into the new connected and mobile digital age. Stringer’s efforts were slow
to take root, meeting resistance by Sony’s hardwareworshipping culture. “Whenever I mentioned content,”
he says, “people would roll their eyes because, ‘This is an electronics company, and content is secondary.’” But
even with its rigid structure and inflexible culture working against it, Sony’s strengths kept it in the game. In fact,
just a few years into Stringer’s tenure, the once great consumer electronics giant began to show signs of life, as
Sony’s profits jumped 200 percent to $3.3 billion on rising revenue.

But if Sony didn’t have enough challenges, this uptick occurred just as the Great Recession hit. A year later, Sony
was right back where it started with a billion dollar loss. Stringer was quick to point out that if not for the global
financial collapse and the yen trading near a postwar high, it would have been comfortably profitable. After a few
more years of negative profits, 2011 was to be Sony’s comeback year. Its best batch of new products in over a
decade was heading for store shelves, including a portable PlayStation player, a compact 24-megapixel camera, one
of the most advanced smartphones on the market, a personal three-dimensional video viewer, and the company’s
first tablets. Perhaps more important, the company was ready to launch the Sony Entertainment Network—an
iTunes-like global network that would finally combine Sony’s strengths in movies, music, and video games to all its
televisions, PCs, phones, and tablets. Analysts forecasted a profit of $2 billion.

But on March 11, 2011, Stringer received a text message at 4:30 a.m., after having just arrived in New York City.
Eastern Japan had been devastated by an earthquake and tsunami. Nobody at Sony was hurt. In fact, Sony’s
employees dove into rescue efforts, fashioning rescue boats from foam shipping containers to assist in saving
victims and ferrying supplies. But in the aftermath of the destruction, Sony shuttered 10 plants, disrupting the flow
of Blu-ray discs, batteries, and many other Sony items. In the wake of the extreme natural disasters, Sony’s miseries
had only just begun. A month later, a hacking attack invaded the company’s Internet entertainment
services. In what was determined to be the second largest online data breach in U.S. history, Sony was
forced to shut down the PlayStation Network. A short four months later, fires set by rioters in London destroyed
a Sony warehouse and an estimated 25 million CDs and DVDs, gutting the inventory of 150 independent
labels. And to round out the year, floods in Thailand shut down component plants, disrupting production and
distribution of Sony cameras. Sony’s 2011 comeback year turned out to be big all right, but for all the wrong
reasons. The projected $2 billion profit ended up as a $3.1 billion loss, marking a three-year losing streak. As
Stringer prepared to fade away into retirement, Kazuo Hirai, Sony’s emerging CEO, began speaking publicly of
Sony’s “sense of crisis.” Indeed, Sony entered the record books the following year with a net loss
in excess of $6 billion—its biggest ever.
So in the end, just what is it that has caused Sony’s fall from grace? Was it an addiction to hardware, an
uncompetitive cost structure, the global financial crisis, natural disasters, computer hacking, or riots?
In retrospect, all these elements of the marketing environment combined to deliver blow after blow. Sony’s
encounter with a perfect storm of environmental forces illustrates the havoc such forces can wreak—whether
unforeseeable natural and economic events or more predictable turns in technology. Throughout Sony’s turbulent
existence over the past decade, a few things remain clear. Sony is a company with a long history and strong legacy
that refuses to give up. Even now, Hirai and others at Sony are firmly resolved to save the company. And with
engineering and design at the core, they still have all the ingredients needed to become a total entertainment provider
in today’s market. Sony is a gaming console maker, a TV producer, a mobile company, a home device company, a
movie studio, and a major recorded-music label. With renewed efforts toward cost-cutting and breaking down
divisional walls, Sony’s portfolio of new state-of-the-art products and the unifying umbrella of the Sony
Entertainment Network show promise. Now, if Sony can just get the economy and Mother Nature to cooperate

Bank
The two elements that give a firm a head start over its competitors are understanding consumers and delivering
better service, which help improve customer satisfaction and loyalty. These characteristics also allow the firm to
maintain that competitive advantage. The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) is
a leading provider of financial services worldwide, with branches across 71 countries and territories in the Asia-
Pacific region, Europe, the Middle East, Africa, and the Americas. As a multinational corporation, HSBC competes
not only with local banks but also with foreign ones as well. While local banks have home-ground advantage with
more intimate knowledge of the market, foreign banks tend to have a strong capital base and an international
reputable name. Many Asian countries have also liberalized their banking industry, making competition
more intense. HSBC periodically conducts various local surveys to better understand consumer patterns. There are
questionnaires used by the corporation, some available offline and others accessible online. For the Asia-Pacific
region, there are at least two online surveys that are made available to consumers. The first, the Customer Service
Hotline Customer Satisfaction Survey, asks consumers questions like the reason why they called the bank, their
satisfaction with the bank’s responses to their queries, whether they were able to complete what they had
wanted to, and so on The second, HSBC Express Banking Channels Customer Satisfaction Questionnaire, asks
consumers to rate the services offered by the bank The questions the bank puts forward include how the consumer
would most likely describe their views about the bank’s customer service representatives. This
question is followed by different aspects of the bank’s customer services like time taken to answer calls, the
representative’s communication skills and whether or not it was a positive approach. Each element is accompanied
by a 3-point scale rating that the consumer must select—”1” implying that the customer was not satisfied, “2”
implying that they were satisfied, and “3” implying that they were very satisfied. This survey covers three broad
areas including telephone banking, Internet banking, and ATM banking. It also addresses consumers’ banking
preferences.

MC
McDonald’s opened its first restaurant in the Philippines in 1981, when George T. Yang, an entrepreneur of Chinese
descent and a Wharton graduate, launched the fast-food phenomenon in a joint venture with the U.S.-
based McDonald’s Corporation. The Philippines, with its four-decade history as an American-occupied territory, is a
huge fan of American culture. Several American restaurant franchises have been well-received here, and Yang was
confident that McDonald’s would do well too. Introducing the Big Mac experience to the Philippines was seen as
something of a revolution in the local dining industry. It offered consumers a taste of McDonald’s Quarter
Pounder™, the World Famous Fries™ and Coke McFloat®. Apart from the fast-food fiesta, McDonald’s also
provided
quick service, a clean environment, and a young-and up beat staff. In 2005, the business became a fully owned
Filipino enterprise. However, the McDonald’s journey hasn’t been all smooth sailing. A local company called
Jollibee, which turned its ice cream parlor into a burger joint has been stinging McDonald’s in the Philippines ever
since it was opened. Jollibee, which was founded by Filipino entrepreneur Tony Tan Caktiong in 1978, is often
referred to as Asia’s response to McDonald’s.

With more than 31,000 outlets in over 100 countries, of which 3,000 are in Asia, and their vast experience, one
would think McDonald’s would easily surpass its regional brands; however, Jollibee has surfaced as its biggest
competitor. Having heard that McDonald’s was coming to the Philippines, Tan traveled to the United States to get
a better understanding of Jollibee’s competitors. Just before McDonald’s was launched, Jollibee offered consumers a
menu similar to McDonald’s but adapted it to suit the Filipino palate and priced the items lower. Unlike the
Americans, Filipinos don’t like pure beef patties as they consider them to be bland. Catering to the local tastes and
preferences, Jollibee ensures that their patties have a stronger flavor, usually with more garlic, onion, and celery.
One of its popular dishes is Chickenjoy, which is a serving of fried chicken and rice with a generous helping of chili
powder. Its fries are dry on the inside and taste like they have been fried several times over, just the way the primary
consumers like it. Other items on their menu include Jolly Spaghetti, which is spaghetti served with sweet meat
sauce and hotdog slices, and its signature deep-fried mango pie, which is in a better position to take on McDonald’s
apple pie. Even its mascot, Jolly Bee, epitomizes the Filipino spirit of lighthearted, everyday happiness and is more
endearing to the Filipinos than Ronald McDonald.

Unlike Jollibee, McDonald’s remained largely faithful to its core menu. According to Yang, initial sales were
astounding. However, it became apparent that localization was necessary to win the Filipinos over and beat the
competition. Yang lobbied to integrate local flavors into the menu. As a result, in 1986 McDonald’s Philippines
introduced McSpaghetti, which was a take on the Filipinos’ distinct version of spaghetti. The following years saw
new items on the menu, including the Chicken McDo and the Burger McDo in 1993. Such localization has seen
some success. In the Philippines, McDonald’s has been affectionately given a nickname, McDo. Several of the
catchphrases in its commercials have found their way into local lexicon— “Kita-kits” from “Kita-kits sa McDo,” a
phrase in one of its early commercials, was adopted by locals as a short way for saying “See you there.”
Marketing to the smartphone-savvy Filipinos, McDonald’s has launched several apps. The McDo PH app, with its
“Never Miss a Craving” tagline, was built to make McDelivery more accessible. In 2014, McDonald’s collaborated
with Coca-Cola to launch the BFF Timeout App, a gaming app that challenges players to go on a “digital timeout”
with their best friends. The longer they can go through life without digital interruptions, such as checking their
mobile phones, the more points and badges the players get. Best friends can even win free trips through the app.
Innovation has also helped McDonald’s promote its sales. The Fry Holder, launched in 2014, can be placed in cars
to hold fries, allowing drivers to have a hassle-free, eat-on-the-go experience.
Despite these adaptations, innovations, investments, and the brand’s heritage, McDonald’s still lags behind Jollibee.
The latter has over 750 stores nationwide compared to McDonald’s 400, around twice in terms of store-count market
share. Other fast-food chains, such as Wendy’s and Burger King, have about 250 collectively. According to Forbes
Asia, Jollibee controls some 18 percent of the market in Metro Manila, beating McDonald’s 10 percent. Jollibee is
reportedly also ranked higher than McDonald’s when it comes to courtesy and service.
In light of the sting, Kenneth S. Yang, President and CEO, ponders on how he can remedy the situation.