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The Development of the UK Domestic Electrical Appliance Industry Over the Period 1963 to 1990

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The Development of the UK Domestic Electrical Appliance Industry Over the Period 1963 to 1990 Open Research Online The Open University’s repository of research publications and other research outputs The Development of the UK Domestic Electrical Appliance Industry over the period 1963 to 1990 Thesis How to cite: Wolfe, Brian Sinclair (1996). The Development of the UK Domestic Electrical Appliance Industry over the period 1963 to 1990. MPhil thesis The Open University. For guidance on citations see FAQs. c 1995 Brian Sinclair Wolfe https://creativecommons.org/licenses/by-nc-nd/4.0/ Version: Version of Record Link(s) to article on publisher’s website: http://dx.doi.org/doi:10.21954/ou.ro.0000f77b Copyright and Moral Rights for the articles on this site are retained by the individual authors and/or other copyright owners. For more information on Open Research Online’s data policy on reuse of materials please consult the policies page. oro.open.ac.uk THE OPEN UNIVERSITY TITLE: The Development of the UK DOMESTIC ELECTRICAL APPLIANCE INDUSTRY over the period 1963 to 1990 Author: Brian Sinclair Wolfe C.Eng. DMS. MIEE. MRAeS. Degree: M.Phil. Discipline: Management Date of Submission: 27th January 1996 ProQuest Number: 27701066 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a com plete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 27701066 Published by ProQuest LLO (2019). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLO. ProQuest LLO. 789 East Eisenhower Parkway P.Q. Box 1346 Ann Arbor, Ml 48106- 1346 The Development of the UK DOMESTIC ELECTRICAL APPLIANCE INDUSTRY (the DEAD over the period 1963 to 1990. The Thesis determined that the development of the DEAI was characterised by a contraction of the industry, a reduction in profitability, coupled with a massive growth in import penetration from 6% to almost 50% over the period. Much was self-induced by minimal investment in product development, coupled with a lack of understanding of the increasingly competitive UK market. In the distribution and retailing sectors there had been a rationalisation of wholesaler and retail chains. The prime tool used in analysing the manner in which companies compete within the DEAI was the PORTER Five Force Model. The method employed calibrated the strength of each force thereby determining a “metric" which could be used In comparing each force over the 27 year period. In-so-doing it was found that the industry was highly competitive and that consumers had become more discerning in their selection of appliances. Importer’s brands and their products had become more popular. The application of the Porter Model led to the conclusion that “Buyer Power” i.e. the power of the retailer’s buyers had significantly increased. Additionally industry data indicated that the industry’s profitability had also decreased, as predicted by the Porter theory. Extensive interviews were carried out with industry decision makers which provided a basis of an industry view , which was used to benchmark the results achieved through the analysis c_ using the Porter model. During the course of the study it was suggested that the management within the industry had conformed to a set way of thinking or industry wide paradigm or “recipe”. This assertion was confirmed during the analysis. It was also clear that UK governments over the period had enacted legislation which caused the further contraction and instability within the DEAI. Brian S.Wolfe. PREFACE The writer would like to thank and acknowledge the help and advice given by a large number of people during the six years it has taken to compile this thesis. All of them gave willingly of their time and would be embarrassed if an reference was made to them personally. However, I feel I must acknowledge the help, direction and support so thoughtfully and enthusiastically given by David Asch, Dean of the Open Business Schooi, who took on the job of supervising my efforts over this long period of time. It was somewhat of an experiment by the Open Business School to allow me to take on this task so late in my professional life, and In this connection, I also acknowledge the confidence shown in me by Professor Derek Pugh: I hope they feei it was worth H, since everyone’s efforts now have enabied me to add just a iittle to our understanding of the nature of competition in the U.K. Domestic Eiectrical Appliance industry. Finaliy, and most importantly, I would like to express my sincere thanks to my family, particularly my wife, Joy, who have had to endure my non-communication over numerous weekends and holidays for such a long time. Their support and forbearance was absolutely paramount - without it, I would have never completed the work. 27th January 1996 INDEX GLO SSA RY O F T E R M S --------------------------------------------------------------------------------------4 1. INTRODUCTION,.......................................................................................................................... 5 1.1 Review OF THE UK D omestic E lecirical Appliance In d u str y ..................................... 5 1.2. Introduction to the Porter fram ew ork ........................................................................10 1.3. T he Industry Paradigm ......................................................... 14 1.4. Summary ..................................................................................................................................... 15 2 .THE DEVELOPMENT OP THE UK DOMESTIC APPLIANCES INDUSTRY 16 2.1. T he Sixties AND E arly Seventies AND THE Lead Up TO C ommon M arket E ntry 16 2.2. T he L ate Sev en ties .................................................................................................................28 2.3. T he E ig h ties -T he Lead -Up TO 1992 ................................................................................31 2.4 Changes in D istribution ................................... 36 2.5. G overnment Influence ....................................................................................................... 39 2.6. C urrent G overnment P o u c Y ..............................................................................................41 3. LITERATURE REVIEW, _________________________________ 42 3.1. D iscussion OF the Porter framework ............................................................................. 43 3.1.1. Porter's Generic Strategies..............................................................................................46 3.1.2. Application of Porter’s Competitive Strategy to an.................................. Industry 50 3.13. Introduction to the Porter Five Force Framework..................................................... 54 3.2. T he M cNamee and McHugh W ork ..................................................................................55 3.3. O bservations on “Industry Recipes”........................... ........................................... ........59 4METHODOLOGY____________________________________________________________ 62 4.1. Introduction ..................................................................................................... 62 4.2. Analysis of DEAI using the Porter fram ew ork ........................................................ 64 4.3. D istribution ..............................................................................................................................68 4.4. M anagement Behaviour ...................................................................................................... 69 5. ANALYSIS OF RESULTS,,,,,,------------------ .... 72 5.1. Appucatton OF THE P orter fram ew ork ...........................................................................72 5.3. Industry Profitability ................................................... .................................................... 78 5.4. Results of Interview Programme ........................................................... 80 5.4.1 Industry Performance.................................................................................... 80 5.4.2. Effects o f Government Policy.........................................................................................82 5.43. Review of Interviews in Relation to the Porter Framework.....................................83 5.5 Summary OF R esu lts .........................................................................................;.....................94 6. MANAGEMENTy STRATEGY AND CULTURE WITHIN THE DEAI.---------------95 6.1. Introduction .............................................................................................................................95 6.2 APPLICATION TO THE D E A I....................................................... 96 6.3. T he Change in the DEAI Paradigm ........................................................... 97 6.4. Changes in O rganisation /D istribution ...........................................................................98 6.5. Changes IN Rituals AND Ro u tin es ......................................................................................98 6.6. Sto ries ........................................................................................................................................ 99 6.7. S ym bols ...................................................................................................................................
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