Black & Decker

Topics: Subsidiary, Parent company, Corporation Pages: 4 (1088 words) Published: April 26, 2010
Black & Decker p534
1. How would you characterize Black & Decker's international expansion during the 1950s and 1960s? What strategy was the company pursuing? What was the key feature of the international organization structure that Black & Decker operated with at this time? Did Black & Decker's strategy and structure make sense given the competitive environment at that time?

The company grew rapidly during the 1950s and 1960s due to its strong brand name and near monopoly share of the consumer and professional power tools markets. This monopoly was based on Black &. Decker's pioneering development of handheld power tools. It was during this period that Black & Decker expanded rapidly in international markets, typically by setting up wholly owned subsidiaries in a nation and giving them the right to develop, manufacture, and market the company's power tools. As a result, by the early 1980s, the company had 23 wholly owned subsidiaries in foreign nations and two joint ventures.

During its period of rapid international expansion, Black & Decker operated with a decentralized organization. In its 1979 annual report, the company described how, "In order to be effective in the market place, Black & Decker follows a decentralized organizational approach. All business functions (marketing, engineering, manufacturing, etc.) are kept as close as possible to the market to be served." In effect, each wholly owned subsidiary was granted considerable autonomy to run its own business.

2. How did the competitive environment confronting Black & Decker change during the 1980s and 1990s? What changes did Black & Decker make in its (a) strategy and (b) structure to compete more effectively in this new environment?

By the mid-1980s, however, this structure was starting to become untenable. New competitors had emerged in the power tool business, including Bosch, Makita, and Panasonic. As a result, Black & Decker's monopoly position had eroded. Throughout the 1980s, the...
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