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Black And Decker Essay

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Words 1009
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TABLE OF CONTENTS

Situational Analysis 3
Alternatives 7
Decision Criteria 11
Action Plan 12

In 1910, Black & Decker was founded by two 23 year olds S. Duncan Black, and Alonzo G. Decker in Baltimore. 73 years after receiving its first patent, Black & Decker was the world’s largest producer of power tools, power tool accessories, electric lawn and garden tools, and residential security hardware. The brand has also made its successful foray into households with products such as the DustBuster, and Spacemaker amongst other things. The franchise also holds nearly 30% of market share overall in the US power tools market. With strong segment shares in the professional industrial and consumer market at …show more content…
Makita are a very dominant brand in this segment, and B & D needs to decide whether or not this segment will prove to be profitable enough to pursue it. The tradesmen segment overall accounts for 28% of the power tool market comprising of 420M in revenue. With the disparity in segment share between B & D and Makita, there is a difference of 170M in revenue between the two. Makita also has a 5% premium over B & D, and have made use of the quickest growing distribution channel which is the retail distribution channel such as Home Depot and Lowe’s, and they are also the baseline option in all major categories. B & D on the other hand have the strongest brand awareness out of all its competitors, and with it many agree that they are “one of the best” (presented in table C of the case). Milwuakee on the other hand along with B & D is a market leader in the professional industry segment as well. They are more “high end” which they use to justify the 10% premium charged over B & D. They also have the best perception in that segment. The premium charged also doesn’t allow them to target the professional tradesmen segment as effectively yet they still have 10% share in the segment. Roughly the same as B & D but workers are still giving in to the higher price which implicates they would rather pay more than buy B & D products.
Context:
Though B & D uses different colors for their segments with the exception of Industrial and Tradesmen, it is not still easily differentiable since charcoal grey and black (which is the color scheme for the customer segment) are similar. This resemblance gives tradesmen the perception of it being a consumer tool in a negative light. Thought B&D produces tools customized to different customer segments, it uses the same colored tools in both consumer and professional

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