Black & Decker Case Study

Despite maintaining a very strong brand name and being #1 in the Consumer & Industrial segments of the power tools market, Black & Decker (B&D) was being significantly outsold by Making Electric of Japan, who had taken over the Tradesmen segment with 80% market share in cordless drills and 50% overall share in this segment. Tradesmen appeared to perceive the B&D brand as a household product unworthy of their usage given B&Ad’s success in the Consumer segment and Making’s dominance of the Two-step, Home Center, and

Membership Club distribution channels popular among tradesmen helped lead to B&Ad’s share erosion. While the market share differences between B;Ad’s Industrial & Tradesmen segments were initially surprising, a closer look revealed that the Industrial segment’s distributors were likely responsible for B;Ad’s #1 position in this market. W.

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W. Grainier, which was the largest distributor by far, provided technical expertise, service, and brand recommendations for contractor’s tool requirements.

Since these tools were purchased and owned by impasses, and since B;Ad’s product research had proven a leadership and/or competitive quality across various products, most companies would likely have asserted that B&Ad’s products would be sufficient for their tasks. Conversely, Tradesmen tended to purchase tools on their own. They would be more likely to frequent the membership clubs, two-step, and home center distribution networks, each of which showed superior sales of non-B;D products. Thus, they would likely be more highly recommended by those groups.

Of the options presented, Option 3 offers B;D the best chance of success In reviving Its Tradesmen segment. Option Xi’s strategy of ceding a $420 million revenue line and 9% market share to competitors would only strengthen the Making, Milwaukee, and other brands and could potentially endanger B&Ad’s foothold in the Professional – Industrial segment. Similarly, Option 2 did not offer enough product differentiation to truly make any difference. While the B;D brand name assured Consumer ; Industrial users of high product quality and success In the Consumer ;

Industrial segments, It would be Important for them to differentiate Its Tradesmen products to be viewed as a trade professionals Instrument. Given the existing positive awareness of the Dealt brand, this would likely offer the easiest entry point for a “new” and competitive product offering while Limiting Impact on the B;D brand In the other two segments. Furthermore, employing B;Ad’s existing distribution network and renewing Its focus on marketing to the fast-growing two- step and home centers would allow B&D to mount a strong challenge and potentially steal Making’s market share In the Tradesmen segment.

Option 3 offers B;D the best chance of success in reviving its Tradesmen Industrial users of high product quality and success in the Consumer ; Industrial segments, it would be important for them to differentiate its Tradesmen products to be viewed as a trade professionals instrument. Given the existing for a “new’ and competitive product offering while limiting impact on the B&D brand in the other two segments. Furthermore, employing B&Ad’s existing distribution network and renewing its focus on marketing to the fast-growing two- potentially steal Making’s market share in the Tradesmen segment.

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