Black and Decker

Topics: Strategic management, Supply chain, Strategy Pages: 4 (1201 words) Published: March 31, 2011


Black and Decker

In 2000 Black & Decker Corporation was still struggling to get out from under the array of financial and strategic problems stemming from the company’s $2.8 billion acquisition of Emhart Corp. in 1989. Black & Decker had long been the world’s leading producer and marketer of power tools and power tool accessories. But it had begun a program of diversification in the 1980s that had produced mixed results for shareholders. The company’s foray into small household appliances had been a success originally but the small appliance division acquired from General Electric in the early 1980s had recently been divested because of its drag on B&D’s growth. The company’s follow-on acquisition of Emhart, a conglomerate with very diverse business interests, had proved to be a significant impairment to the company’s earnings and cash flow as well as a management burden, and during the past eleven years Black & Decker had achieved success in only a few of the many different and largely unrelated businesses it obtained in the Emhart acquisition. In 2000 the Black & Decker Corporation considered itself to be a diversified global manufacturer and marketer of household, commercial, and industrial products. Black & Decker was the world’s largest producer of power tools, power tool accessories, security hardware, and electric lawn and garden products. The company’s Price Pfister kitchen and bathroom faucets business unit was the third largest manufacturer and marketer of plumbing fixtures in North America and had gained market share every year since the Emhart acquisition. Black & Decker was also the worldwide leader in certain types of mechanical fastening systems. Between 1910 and 1984 Black & Decker pursued a single-business strategy, establishing itself as the dominant name in power tools and accessories, first in the United States and then across a broad global front but particularly in Europe. Growth was achieved by adding to its lineup...
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