...------------------------------------------------- Caso: The Black & Decker Corporation: Power Tools Division 1. El menor market share conseguido por Black & Decker en el segmento de Tradesmen puede explicarse principalmente por no haber comprendido al consumidor de este segmento, no haber podido lograr una diferenciación con el segmento Consumer y por no haber aprovechado los canales de distribución para poder llegar al consumidor. El consumidor del segmento bajo análisis es el electricista, el plomero, el carpintero, etc. Son aquellos profesionales que se presentan al trabajo con sus propias herramientas. Una parte importante de su imagen viene dada por las herramientas que utilicen y la calidad percibida que tengan las mismas. Utilizar una marca asociada a los productos domésticos como B&D podía llegar a ser hasta motivo de burla para quien las utilizase. El segmento industrial elije sus productos en base a otros atributos, basándose en la calidad y en el excelente servicio postventa. Por esto, no haber logrado una diferenciación con respecto a los productos domésticos no influye en el share de este último segmento. Por otro lado, B&D no contaba con una buena estrategia de canales para este segmento. En cambio, Makita supo ubicarse fuertemente en los Home Centers (Ej.: Home Depot) de fuerte crecimiento, donde los tradesmen compraban sus herramientas, y de esta forma apalancar su dominio en el segmento. 2. Opción | Pros | Cons | 1 | Asegura la rentabilidad...
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...Cause of B&D’s 9% share in the Tradesman segment; In the 1990’s Black and Decker had a great position in the market for their products to appeal to the Professional Industrial segment and the Consumer segment but when it came to the Professional Tradesmen segment they were lacking. Their 9% market share vs. Makita’s 50% market share in the tradesmen segment was incomparable. Makita clearly had a better product in the eyes of the Professional Tradesmen. In the Professional Segment most of the people who buy the products are people who need these tools to make a living such as carpenters, electricians, plumbers, roofers, and general remodelers. Black and Decker were branded for tools to use at home. Therefore, tradesmen looked at the Black and Decker brand as tools for home use, and not for work. Since they were branded for home use it seemed as if they weren’t made for everyday use, and would not hold up for the wear and tear a carpenter or electrician would need them to. B&D clearly had a problem with brand association with its consumers. In exhibit 2 it shows that Black and Decker failed in capitalizing in the Membership Club distribution channel which was in the top five profitable distribution channels. Makita did distribute its tools to membership clubs and it turned out to be very successful channel for them having 85%. Black and Decker had such a lack of profitability in the tradesmen segment due to having the wrong brand perception and inadequate distribution...
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...Black and DECKER: power tools Case study Problem Statement Black and Decker has established its brand strength to be among the top ten firms in the United States. By creating the portable power tools business in the early 1990’s and being the world’s largest producer by the end of the decade, the firm has been vouched for offering high quality, differentiated products and excellent service in the Professional-Industrial segment. Powerful brand perception has helped Black and Decker attain the number one position in the Consumer segment. Although Black and Decker has been leading in two of the three segments of the $1.5 billion portable power tools market, it could not make a significant impact in the Professional-Tradesmen segment that was fast growing at 9%. Black and Decker has managed to occupy only 9% with no profitability of the total segment share against Makita and Milwaukee who stand at 50% and 10% respectively. Despite Black and Decker’s success in the Consumer and Professional-Industrial segment, according to surveys conducted of tradesmen, results showed poor quality perception and lack of proud ownership of the tools for the use of job specific applications and instead are perceived to be ideal for home tasks. The low favorability of Black and Decker’s power tools in the Professional-Industrial segment as compared to Makita’s and others may be attributed to (among other factors) the incompetence in product differentiation through the use of color schemes across...
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...BLACK & DECKER CASE Problem Statement: With Black & Decker being one among the most powerful brand names in the world and establishing its professional tools to be the highest quality in the industry, B&D failed to make an impact in the Professional-tradesmen segment. B&D was known for offering high quality, differentiated products and excellent service in the Professional-Industrial segment whereas its brand recognition, and image helped it attain the #1 position in the market place for Consumer segment. B&D occupied only 9% of the total share as against Makita who was leading the Professional-Tradesmen segment with 50% market share. Though B&D leads in the other two segments, it could not capture the tradesmen segment due to the following reasons. B&D was branded more as home tools; it lacked in capitalizing one of the most profitable distribution channels (membership clubs) whereas the same channel proved to be very successful for Makita (85%); the unremarkable grey color did not help B&D; and while B&D was focused in three segments, Makita was focused on only one segment of the market. Therefore, Joseph Galli, Vice president of sales and marketing for B&D, has to decide which one of the three marketing strategies must be implemented to take, the market share in the Professional-Tradesmen segment, away from the current leader Makita. Recommendation: I would recommend B&D to use the strategy of Re-branding i.e; using DeWalt name and the color yellow in order...
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...Black & Decker Case Memo If you think Galli should pursue a build share strategy, what actions do you recommend? Does DeWalt idea have any merit? How about using current name? Remember you have at least three audiences to please: a. The end consumer, i.e. the Tradesman b. Retailer c. Nolan Archibald and GarydiCamillio Actions that I recommend to Galli: * He should focus on leading distribution channels which are “Two-step” and “Home Centers”. Respectively 40% and 25% percent of Professional-Tradesmen Segment sales are done through these channels as shown in Exhibit 2. Especially emphasizing on sales through Home Centers is essential. Although sales through Two-Step channels are more frequent than Home Centers, Home Centers are growing in importance. They can provide superior customer services, lower prices and stock a huge amount of products. Two-step channels, that are sales through distributors to independent retailers can also provide technical expertise, service, stock a large number of products and deliver promptly as in the Professional-Industrial Segment. It will also enable to reach plenty of retailers. This action will also help to decrease SG+A costs. Therefore all parties will be pleased. * While focusing on Two-step and Home Center sales, I am not saying that he should stop sales through other channels. Sales through warehouse home centers, membership clubs and farm outlets should also be carried out. Consumers should be able to reach B&D...
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...Black & Decker Corporation Series Instruction: 1. Each student will read the case(s) ahead of time before attending to the class. 2. Your group will be assigned to one or several questions in class. 3. After a thorough group discussion, your group will outline/summarize your answers into a PPT file and drop it onto the Blackboard’s drop-box. 4. Your group will present and lead the discussion of the question(s) assigned to you. Although the group in charge will be the major discussants for the assigned question(s), it is highly recommended to have the rest of the class involved and participated in the discussion. Discussion Questions: 1. What is the cause of B&D’s 9% share vs. Makita’s 50%? 2. How does the buying behavior of the tradesman impact the situation? Since tools and performance were a constant topic of conversation at the work place for tradespeople, they have negative perception toward B&D products because they viewed B&D products as consumer products, not professional products. Even product color is never a key attribute in purchase decision for tradespeople, no differentiation between B&D consumer and professional products also give a negative impression while they are purchasing the products. Tradesmen bought most frequently in independently owned stores served by distributors such as the Two-Step. B&D own less than 10% market share in the biggest channel type (Two-Step). Moreover, B&D...
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...Black and Decker Study Case 1. What is the cause of B&D’s 9% share vs. Makita’s 50%? The brand perception associated with B&D was in the lower half in comparison Makita. People believed B&D provided good products for the consumer but not for the professional. This view of the consumer product translated into the professional segment. Coloration may even have an impact on this as people that used the colors associated with B&D were not taken seriously in the professional segment. Consumers believed that the service behind B&D was good, but felt the quality associated with the Makita brand was superior for the demands of the workplace. B&D was to be used at home, while professionals should only use Milwaukee and Makita brands. In comparison people viewed B&D below Makita as one of the best brands to use. Causes: Negative spillover effect. Price, color, and brand association. 2. How does the buying behavior of the tradesman impact the situation? The buying behavior of the tradesmen impacts the situation by the word of mouth. The poor perception of B&D in the professional segment resulted in B&D being viewed as having an inferior product. Also, if one tradesmen uses products of high quality and status others will want to do the same. If a tradesmen shows up to a job site with equipment that is less superior to what others are using, they may be looked at as unprofessional. Thus, having the best products by your side shows a level...
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...For the exclusive use of S. Kaya, 2015. Harvard Business School 9-595-057 Rev. March 30, 2001 The Black & Decker Corporation (A): Power Tools Division Joe, I like you guys. But, look, I give Makita 10 feet of space. I give you 10 feet of space. They outsell you 8 to 1. What are we going to do about that? In January 1991, statements like this no longer surprise Joseph Galli. Black & Decker’s (B&D) vice president of sales and marketing for power tools had heard similar sentiments expressed by many trade accounts. Makita Electric of Japan had practically taken over the professional power tools for tradesmen business since it entered the United States market a decade ago. “Tradesmen” was one of the three major segments of the power tools business—the others being “Consumer” and “Industrial.” “Consumer” represented “at home” use, while both “Tradesmen” and “Industrial” covered professional users. The distinguishing characteristic of the Tradesmen segment was that these buyers, such as a carpenter, bought tools for their own use on a job site. In Industrial, the buyer was generally a corporation purchasing tools for use by employees. By late 1990, Makita’s success in the Professional-Tradesmen segment was such that it held an 80% share in cordless drills, the single largest product category, and a 50% segment share overall. B&D had virtually created the portable power tools business in the United States beginning in the early 1900s. While it maintained the #1 ...
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...Joseph Galli, the vice president of sales and marketing for power tools in Black & Decker Corporation, is presented with options for the next steps to solve the company’s problem of having low sales in the Professional-Tradesman segment where profitability is practically zero. B&D only holds about 9% of the market share which is shockingly low considering its high quality and its success in its other two segments. Galli is now considering three options: I. Focus on its successful segments (Consumer and Professional-Industrial segments) while trying to harvest any profitability in the Professional- Tradesman segment II. Sub branding to rebuild the B&D name III. Drop the B&D name from the Professional-Tradesman segment, ultimately creating a new brand Before we look at which option(s) is most appropriate, we need to conduct a thorough analysis. Also, it is important to note that this is a decision case, since the company is facing a well-defined problem (which I will go into detail later) with multiple alternatives. The purpose of this paper is to evaluate which alternative(s) are most suitable for B&D SWOT ANALYSIS Strengths The company has an amazing brand strength as it is ranked #7 in the US and #19 in Europe. Among its competition, B&D has the highest awareness at 98%. Furthermore, the company sells quality products at competitive prices (it is 5%-10% lower than its competitors). B&D conducted 2 tests to determine the quality...
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...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 analysisMakita 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&Ds 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...
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...I. PARTIES TO THE CASE: Kenneth L. NORD, Plaintiff-Appellant, v. the BLACK & DECKER DISABILITY PLAN, Defendant-Appellee. II. FORUM: The district court ruled in favor of Black & Decker Corp. The 9th Circuit Court of Appeals reversed III. STATUTE(S) INVOLVED IN THE CASE: The court is being asked to interpret if Black and Decker denial of his disability benefits violated ERISA. The court must determine whether the claimant is entitled to social security disability benefits. IV. STATEMENT OF FACTS: Kenneth Nord is a former employee as a Material Planner for Kwikset Corporation, a subsidiary of the Black & Decker Corporation. The responsibilities that Nord had in his position include ordering goods, interacting with vendors, and maintaining inventory levels. For the most part, this position is sedentary, but it does require up to six hours of sitting and up to two hours of standing or walking per day. Throughout his employment, MR. Nord was enrolled in the Black & Decker Disability Plan, this plan grants complete discretion to the plan manager to make disabilities determinations. In addition, this plan also gives the plan manager the authority to distribute one or more responsibilities to a Claim Administrator....
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...Buying Behaviour: Black & Decker Case 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 markets, but is weak in the P-T market as it is currently experiencing decreased market share. In this segment, B&D is not generating profits and, at the same time, retailers want more advertising allowances and rebates. Analysis The U.S. power tools market is divided into three segments: Consumer (home use buyers), Professional-Tradesmen (P-T) (contractors who purchase their own tools), and Industrial (procuring professional buying in large quantities for industrial usage). The P-T segment is the one experiencing the largest growth potential. B&D is one of the most powerful brands in power tools. Its products are generally regarded to have high quality. B&D currently has 45% of the Consumer and 20% of the Industrial markets. However, in the P-T segment B&D holds only 9% of the market and is in near parity with Milwaukee Electric (10%) and trails Makita, which has captured 50% of the market. 1) What is the cause of B&D’s 9% share vs. Makita ‘s 50% in the Professional segment? Makita was able to grow rapidly in the P-T market as its...
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...Black and Decker Corporation Progress Report Finance Group Project Focus G.T. Link The corporate image of Black and Decker has gone through many corporate changes to keep a competitive advantage and ultimately see larger increases in the share price. Black and Decker is concentrated as a global manufacturer and marketer of power tools and accessories, hardware and home improvement products, and technology-based fastening systems. Due to the maturity of the market, it is essential for Black and Decker to remain a leader in product innovation and to get out of unprofitable business lines. The acquisition of Emhart resulted in many unprofitable business segments. If the acquisition was to work it was vital for Black and Decker to refocus on its core power tools, plumbing, and security hardware businesses. When Nolan Archibald was hired as CEO, an intense restructuring period set in. Inefficient plants were closed down and the development of new and existing products was developed in the new and existing plants. This also resulted in a large loss in overhead expense due to the loss of 3,000 jobs. Many shareholders were uncertain about the potential success of the Emhart transition due to the large debt/equity ratio. It took 2.7 billion in financing to acquire the company. Black and Decker sold off a total of $566 million in assets. This was a great step forward due to the $560 million dollars in goodwill added back to the balance sheet, which will hopefully...
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...Marketing y Distribución Caso: Black & Decker La fuerza de la marca Black & Decker entre los consumidores hogareños no era necesariamente beneficiosa en el segmento de los profesionales autónomos. Estos tenían la percepción de que Black & Decker era una marca para aficionados, o en el mejor de los casos maridos que intentaran dárselas de habilidosos en sus casas. Creían que si llegaban a su lugar de trabajo con una de estas máquinas, se reirían de ellos. Adicionalmente, algunos usos profesionales de los artículos pensados para uso doméstico habían colaborado con la fama negativa que la marca tenían entre los profesionales autónomos. De acuerdo a las pruebas realizadas no había razones objetivas vinculadas con la calidad de las herramientas que sustentaran la percepción que había aprovechado la japonesa Makita para liderar la franja cómodamente, seguida por Milwaukee y dejando en un inaudito tercer lugar al gigante del sector. Recomendaría ir adelante con el cambio de marca para este segmento, por más que ello hiera algunas sensibilidades en la compañía. La marca De Walt, bien posicionada en la mente de los consumidores, es la solución menos onerosa. La campaña publicitaria tendría que enfatizar que Black & Decker desembarca en el segmento de profesionales autónomos con su marca De Walt, lista para brindar todas las prestaciones que requiere el uso intensivo de estos profesionales. Así Black & Decker podría acompañar a la nueva marca, apadrinándola....
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...Transformation of Black & Decker Ishita Aditya 11BM60074 Black & Decker Corporation is a corporation based in Towson, Maryland, United States, that designs and imports power tools and accessories, hardware and home improvement products, and technology based fastening systems. In 1843, Frederick Stanley started a small shop in New Britain, Connecticut, to manufacture bolts, hinges, and other hardware from wrought iron. With superior quality, consistent innovation, and rigorous operational improvement, Stanley’s company defined excellence, and so did his products. In 1910, S. Duncan Black and Alonzo G. Decker started their shop, similar in size at first, in Baltimore, Maryland. Six years later they changed the world by obtaining the world’s first patent for a portable power tool, and the company they built has been changing the world ever since. Both companies grew in parallel over the ensuing decades, amassing an unparalleled family of brands and products and an even more impressive wealth of industry expertise. In 2010, the two companies combined to form Stanley Black & Decker, to deliver the tools and solutions that industrial companies, professionals, and consumers count on to be successful when it really matters. Just as it was in 1843, the company’s passion for excellence is seen around the world in disciplined operations, purposeful business growth, and loyal customer relationships. Transformations in Black & Decker During...
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