Stanley Black and Decker

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  • Topic: Power tool, Stanley Works, Garden tool
  • Pages : 48 (16076 words )
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  • Published : December 5, 2010
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NICHE CONSULTING GROUP
101 Madison Avenue New York, New York
April 24, 2010

John F. Lundgren
President & Chief Executive Officer
Stanley Black & Decker
1000 Stanley Drive
New Britain, CT 06053
Dear Mr. Lundgren,
In response to your request, an evaluation of your firm, Stanley Black & Decker, was conducted to determine the strategic issues and problems within and surrounding your firm. This consisted of a review of the external environment, a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis incorporating identification of factors which drive the business, a determination of the company’s financial condition and performance, and consideration of ethics and social responsibility. Please find attached for your consideration a copy of my Business Report containing discussion of the preceding, as well as numerous conclusions and recommendations with justification. The principal recommendations for your firm are as follows:

Short term recommendation
1. Shut down the power tool business
2. Expansion in security segment, especially health care product line 3. Decrease dividend-payout-ratio
Long term recommendation
1. Create a marketing team with CRM members which will interact and develop relationship with Home Depot and Lowes, so that better and more shelve space can be acquired in the stores. 2. The merged company can ask for higher discounts for procuring raw materials 3. Improve after sales customer support service

In the event you have any questions in this regard, please do not hesitate to contact me. Very truly yours,

Rana Nayak
Senior Business Analyst

Statement of Recommendations
Short-term         
1. Create a marketing team with CRM members which will interact and develop relationship with Home Depot and Lowes, so that better and more shelve space can be acquired in the stores. 2. To attract female customers, manufacture the consumer tools with appealing colors like green or pink. Also make these products lighter and ergonomic. 3. Form a division in the company to handle lawsuits filed against the company. The expenses have to be reduced as litigation expenses are substantial. 4. Employ Asian managers to carry out operations in Asia. 5. The merged company can ask for higher discounts for procuring raw materials 6. Design better packaging for attracting customers at retail stores like Home Depot and Lowes.  7. Advertise on TV Shows.

8. Improve customer service for after sales.
9. Do not shut down any plant in China.
10. Create a market research team to research about the tool industry in Asian Markets. 11. The company should design products for international market 12. Use the Black & Decker distribution system in the U.S markets to expand Stanley's product line in the retail segment. 13. Start Point-of Sale data collection

14. Set up a showcase office in New Delhi, India.

Long-term Recommendations
1. For the segments of Convergent Security Solutions, Health care Solutions and Mechanical Access Solutions the company should maximize their investment and also try to seek market dominance since the market is growing. 2. Shut down the power tool business.

3. Cost containment and the Security segment continue to be bright spots. 4. Moody's has downgraded of StanleyBlack&Decker ratings to Baa1. Pay off some debt by reducing dividend payout ratio. 5. Decrease the underfunded debt obligation of $412.1 million for Stanley Works 6. The cost of production can be decreased by adopting economies of scale. 7. Procurement units can be moved closer to manufacturing plants 8. Invest in R&D

9. Joint venture with “Future Group” in India to attain shelf places in the biggest retail chain stores. 10. The markets in India and China will be only targeted in the Industrial & Automotive and Security business segments. 11. Open new service centers where products can...
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