One day Hoover woke up
James Murray Spangler, an asthmatic janitor from Ohio, was plum tired of sweeping and dusting in the rug store where he worked. He attached a fan to a tin can, a broom handle to all that, and a satin pillowcase to the rear and in 1907, created the world's first vacuum cleaner.
A year later, Spangler sold the invention to a leather goods manufacturer named Hoover, who founded the world's best known manufacturer of vacuum cleaners.
Hoover is among the admired clique of companies whose pioneering spirit and market leadership made their names into nouns. The word Hoover has become synonymous with the vacuum cleaner, and it's become a verb too: to hoover the rug.
Next year, Hoover will be celebrating its centennial. But it will be a grim party. This week Maytag announced that it's seeking a buyer for the industry veteran, after having failed to rehabilitate its fortunes. It can't stand the bleed any more, Maytag said.
For decades Hoover controlled more than 50% of the world market for vacuum cleaners. But even being the strongest brand name in its sector didn't help the company. As it fought a war of attrition against cheap products from China, and watched its margins disappear, four years ago up popped a British inventor named James Dyson, who introduced an innovative bagless vaccum cleaner. It looked entirely different but was horrifyingly expensive, costing three to five times the usual products.
The people at Hoover figured that Dyson's device would be a flash in the pan. But the expensive curiosity won 2.8% of the market in 2003, a tenth of Hoover's market share. In 2004 the Hoover management started to realize their mistake as Dyson's market share climbed to 13.8% and they fell to 19.5%. Come 2005, it was a knockout: Dyson crossed the 20% point in market share and Hoover's crumbled to 13.5%.
Every household knew what a Hoover was, but Dyson brought innovation, and had a far more effective way to reach consumer awareness: its cool vacuum cleaner appeared several times on comic series Friends and Will & Grace. That did it. Dyson became cool, Hoover became history.
The worst mistake
Dyson, who had invented the bag-free vacuum cleaner, had never intended to set up a vacuum cleaners manufacturing company. He spent a decade trying to sell his idea to vacuum cleaner makers, but nobody bit, because they wanted to keep making their bags.
Hoover, as is the way with old, established companies with practically monopolistic status, made a lot of mistakes in its route to rock-bottom. But the worst mistake was an unwillingness to reinvent itself. Dyson's technology changed the market of vacuum cleaners and Hoover should have leaped forward, adopted the idea and presented innovative products. But because of its giant share of the market, its managers had no will or ability to go to war. They figured it was a blip and they could continue milking the market for years to come. They were wrong.
Now look around you. Who are the Hoovers? Which are established companies with names have become synonymous with the product they make or service they provide? Who are the Dysons who have changed the face of the market with some fresh approach? Do the Hoovers know they are such? Can they reinvent themselves and open new marketing fronts against their own selves? If not, the writing is on the wall. One day they'll find that somebody pulled the rug out from under their feet and hoovered up their market.