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 .
[Link] brands
[Link]
[Link] Distribution
[Link]-User Focus
[Link] Sigma
BRANDS:
DeWalt
Porter-Cable
Delta Machinery
DeVilbiss Air Power
Kwikset
Baldwin
Weiser Lock
Price Pfister
Emhart Teknologies
Oldham Blades
Black and Decker Firestorm
Vector
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.
WEAKNESS
Poor 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 [Link],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
[Link], 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
[Link] new brand name should imply ruggedness,
durability, and quality and “DeWalt” has this
[Link], 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” [Link], it is the best
solution that B&D seize the opportunity available to them
by using the “DeWalt” brand.
OTHER SOLUTIONS
Explore using the company’s own service centers as
possible retail outlets for Black & Decker products, thus
enhancing the distribution channel and providing
opportunities for incremental sales.
Increase consumer advertising for the Kwikset brand,
and possibly expand the line into the commercial
market.
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
