BLACK AND DECKER CORPORATION CASE STUDY

GOUTHAMI -24 NITIN-18 JAI SANTOSH- GANESH- CHANDRASEKAR-

HISTORY

Black & Decker Corporation was founded in 1910 b  S. Duncan Black and Alonzo G Decker  as a small machine shop in Baltimore Maryland In 1917, Black & Decker invented the familiar portable electric drill , obtaining a patent for a hand-held drill combining a pistol grip and trigger switch.

1917 - Received a patent for the pistol grip and trigger switch on its drill. The first factory was opened in Towson, Maryland.

1928 - Acquired Van Dorn Electric Tool Company of Cleveland, Ohio.

1936 - Common stock begins trading on the New York Stock Exchange.

1943 - Received the Army-Navy "E" Award for production, one of four World War II citations awarded to the company.

1949 - First Black & Decker U.S. trademark awarded four years after filing in 1945.1975 - Francis P. Lucier  succeeded Alonzo G. Decker, Jr. as chairman of the board, the first time a family member did not hold the post.1984 - Acquired small-appliance business from General Electric Company.

1986 - Nolan D. Archibald is named chief executive officer.

1989 - Acquired Emhart Corporation, which includes the brand names Kwikset, Price Pfister faucets, Molly wall anchors, POP rivets, True Temper golf club shafts and other consumer and commercial products. Inducted into the Space Foundation's Space Technology Hall of Fame for its cordless power tool achievements and contributions to NASA 's Gemini andApollo programs.

2010 - Black & Decker merges with Stanley Works to become Stanley Black & Decke

VISION

To establish itself as the preeminent global manufacturer and marketer of power tools and accessories, hardware and home improvement products, and technology based fastening system .

A.Strong brandsB.InnovationC.Global DistributionD.End-User FocusE.Six Sigma

BRANDS:

DeWaltPorter-CableDelta MachineryDeVilbiss Air PowerKwiksetBaldwinWeiser LockPrice PfisterEmhart TeknologiesOldham BladesBlack and Decker FirestormVector

SWOT ANALYSIS

STRENGTHS

A widely recognized market leader in power tools and power accessories.

Strong brand name and company reputation.

Ability to take advantage of economies of scale.

Good customer service reputation.

Well known for high quality products.

Strong financial position.

Strong distribution capabilities.

WEAKNESSPoor common stock performance and financial results.

Troubled acquisitions and failed acquisitions of other companies.

Trouble with transferring brand loyalty of acquisitioned companies products.

Gaining respect for products in professional tool segment.

Not clear on strategy direction.

Lacks in e-commerce

OPPORTUNITIES

Gain Market Shares from GE small appliance segment through acquisition.

Opening opportunities in Eastern Europe and other developing nations in household appliance segment.

Professional-Tradesmen market is fastest growing power tools segment at 98%.

Expand product lines to meet broader range of customer needs.

Acquisition of companies with attractive business opportunity.

Creating the Dewalt Brand name and line of products.

Expand in e-commerce.

THREATS

Mature Markets

Cyclic market

Poor market conditions: (i.e.) Recessions and just general poor performance in over all global market.

Strong Competition in power tools segment, like Bosch/Skil Power Tools ,Makita ,Hitachi,Atlas/Copco,Delta/Porter Cable,Hilti,Ryobi,Electrolux.

Growing bargaining power of retailers.

New product development, products innovations, and redesign from competitors.

Competition in small appliance segment.Rival,Hamilton Beach/Proctor SilexOster/Sunbeam,West Bend,CuisineHPA/Betty Crocker,Toastmaster.

Describe the buying behaviour in the three market segments - Tradesmen , Industrial /Commercial & Consumer.?

TRADESMEN : buyers such as carpenters, plumbers, farmers, bought tools for their use on a job site. They tend to patronize newly emerging retail distribution channels including home centers such as The Home Depot and Lowe’s, in addition to traditional hardware stores, such as Ace.

INDUSTRIAL– In Industrial, the professional buyer was generally a corporation purchasing tools for use by employees.In this segment, distributors(of which WW GRAINGER) played an important role in providing technical expertise and service.

Consumer – These non-professional buyers purchased commodities for “At Home” use.They bought tools at mass merchants such as Wal-Mart and Kmart.B&D brand recognition and image helped it attain #1 position in market in this segment.

Why is B&D in trouble with the first segment ? How might this trouble be avoided?

Despite of being in the top most position, B&D was not able to taste success in the Professional Tradesmen Segment.One of the reasons of this was because Black and Decker brand name was too closely affiliated to household products.

Some trades people viewed all B&D products as for use at home rather than on the job; and conversely, there had been instances of a B&D product designed for at home use being subjected to demands of the job site and failing.

The lack of differentiation in product classes within the B&D brand, these professional tradesmen are inclined not to purchase B&D tools, as they perceive them to be primarily for those seeking tools designed for Consumer segment.

The trade was asking for advertising allowances and rebate money on B&D’s Tradesmen products and profitability at this segment was near zero.

What could have motivated B&D purchasing the GE’s housewares division?

From its roots in power tools, B&D began a move “from the garage to the house” in 1979 with the introduction of the very successful Dustbuster hand-held vacuum.This “into the house” thrust led to the purchase of General Electric’s Housewares Divisions in 1984 for $212 million.However, as part of the sale agreement, B&D could use General Electric’s name on their products only until 1987.

Why might launching a new brand(DeWalt) have been the best solution? What other solutions could you suggest?

Launching DeWalt comes as a logical option, with 70% awareness rating and positive recognition by costumers.The new brand name should imply ruggedness, durability, and quality and “DeWalt” has this potential.Surprisingly, it had achieved an “Is One of the Best” agreement percent of 63% from tradesmen as compared to B&D’s 44%.Further research on the DeWalt brand showed that 51% of tradespeople would have some “Purchase Interest” score.Hence, it is the best solution that B&D seize the opportunity available to them by using the “DeWalt” brand.

Explore using the company’s own service centers as possible retail outlets for Black & Decker products, thus enhancing the distribution channel and providingopportunities for incremental sales.

Increase consumer advertising for the Kwikset brand, and possibly expand the line

into the commercial market.

OTHER SOLUTIONS

What other marketing positions will be required to make the launch of DeWalt long term success?

Any plan involving investing to build market share would have to provide for a minimal objective of doubling B&D’s Professional-Tradesmen Segment share from under 10% to nearly 20% within three years, with major share “take-away” from Makita.Operating income would be expected to improve steadily from under 10% to at least 12%.Relationships with home centers like Home Depot should be strengthened.

This will allow DeWalt to market Professional-Tradesmen segment and ultimately B&D will regain market share in this segment and the overall power tools market.

THANK YOU