SKIL CORPORATION CASE ANALYSIS
ASSIGNMENT #: 3
INSTRUCTOR: ABDUL QADIR MOLVI
DATE: 12TH MARCH, 2013
Q1. What is your analysis of structure of possible Electric Power Tool Industry? According to the Porter’s Five Forces Analysis the industry is moderately attractive.
Q2. How the industry structure is changing? Are these changes for better or worse? The power tool industry consisted of portable and stationary tools with wide range of sizes prices and qualities. The industry was becoming increasingly segmented by price point, with each point representing a certain level of quality. The power tools were broadly divided into two categories; professional/industrial and consumer. The professional tools were superior in quality and therefore were sold at higher prices and greater gross margins than the consumer tools. However, as the consumer tools were becoming more sophisticated and of better quality the distinction between both the categories started to blur. As technology was improving the trends of usage of power tools changed (corded tools were replaced by cordless ones). The other improvement was the availability of lighter materials (aluminum, magnesium and plastic). This helped in lowering the costs of production. Also, energy efficient tools were developed and safety was emphasized as an area of development. All the occurring changes reflected growth potential in the power tool industry. Some of the changing factors which indicated the potential for development, betterment and growth of the industry include the increasing emphasis on quality, safety, more energy efficient products, advancements in technology and wide ranges of product with varying prices.
Q3. What was Skil’s competitive strategy in 1979? How would you evaluate its relative position? In 1979 Skil Corporation had 76 company owned service centers and 427 authorized service stations throughout United States. It...