black and decker corporation : power tool division

The Black & Decker Corporation: Power Tools Division

Synopsis• 90 yr old and reputed company• Strong brand-ranked 7th in US & 19th in Europe• Three product segments in power tool market– Comsumer tools – 45%– Professional Industrial tools – 20%– Professional Tradesmen tools – 9%

Market ShareMakita – 50%Milwaukee – 10%Black & Decker – 9%Ryobi – 9%Skill – 5%Craftsman – 5%Porter Cable – 3%Bosch – 3%

B&D’s 9% vs Makita’s 50%

• B&D positioning as a Consumer brand, not a professional Tradesmen brand

“……B&D makes a good popcorn popper, and my wife just loves her dust buster, but I’m out here to make a living…”

“…..on the job, what you are working with….if I came out here with one of those B&D grey things, I’d be laughed at.”

• B&D’s absence from membership clubs

B&D’s 9% vs Makita’s 50%• Tough competition by Makita-– Dominance in distribution channel patronized by

tradesmen– Provided a good baseline option in all major categories– Perceived as better reliable for professional use– Enhanced goodwill by discussion of good performance on

job sites– Trading down strategy (positioning as Father’s day giving)

B&D’s 9% vs Makita’s 50%• Color-No product differentiation between

consumer and professional tools Consumer Goods Professional Tradesmen tools

Buying Behavior Of Trademen• Perceive B&D as a consumer product, not a

professional tool• Repulsive from its color resembling domestic goods• Patronize distribution channel dominated by Makita• Descent purchasing capacity to afford Makita’s

product priced at a premium• Discuss tools and their performance discussed on

job sites

Makita’s Competitive Strategy• Dominance on distribution chain• Monopoly in membership club• Targeting tradesmen• Expanding competitive market by no channel

protection• Provide good baseline option in all major categories• Trading down strategy (positioning as Father’s day

giving)

Milwaukee’s role• Reducing the price contrast• A major competitor to B&D– Better brand awareness– Best brand as over per “Consumer Agreement Data”

Action Alternative• Recommended solution – Option 2• Not recommended to dilute existing brand• Exploit on high ranking and awareness level (98%)

of brand• Product differentiation and expansion of market

share by sub branding

The Change Current market share : 40% of the US power tool market

http://www.thestreet.com/comment/theturnaroundartist_up/10006480.html

THANK YOU

DeWALT

Phiranha