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Black and Decker: Case Overview

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Submitted By singhalpriya
Words 475
Pages 2
Case overview:The pioneer of the power tools industry is facing the blues of very low market share compared to the leader in a particular product segment.
The case depicts a peculiar situation of a market leader in two product segments taking a backseat and suffering at the hands of strong competitors in another product segment.
The case also brings out importance of the consumer perception and behavior in selling the product. The reasons for different and often indecipherable consumer behavior patterns need to be found out. The case also brings out an interesting fact of the market leader not being able to translate a powerful brand name and quality in actual numbers showing profitability.
Situation analysisMakita electric of Japan had practically taken over the professional power tools for tradesman business since it entered the US market a decade ago.
The trade was asking for advertising allowances and rebate money on B&Ds Tradesman products and profitability in this segment was near zero.
Since its entry into the market in 1978, Makita had staked out leadership positions in virtually all products and distribution types within the professional tradesman segment.
Professional tradesman revenues of approximately $35 million in 1990 for B&D translated into about $3 million in operating income.
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 home use subjected to the demands of the job site and failing.Background
Black and Decker (B&D) is a pioneer in portable power tools. In 1991, it is a $5 billion in sales company with 29% of these sales coming from Power Tools and Accessories. B&D is the world's larges producer of power tools and the U.S. market overall leader.
Problem Statement
B&D has a strong market share in the consumer and industrial

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