Case Analysis: The Black & Decker Corporation
Black & Decker Corporation is a corporation based in Towson, Maryland, United States, that designs and imports power tools and accessories, hardware and home improvement products, and technology based fastening systems. Recent research studies showed that B&D is one of the powerful brand names in the world because of its professional tools that has high quality in the industry.
During the early 1980's; sales started to decline and it posted a restructuring cost; therefore in the period of 4 years the company lost money. Black & Decker went through a very hard time. In 1985, the company hired Nolan D. Archibald as president and chief operating officer (CEO). Under his leadership the Black & Decker started to turnaround their sells, although this has proved to be a very long journey.
Segmenting the US market into 3 segments helped B&D to focus more on the Professional tradesmen segment which had a bad standing against competitors products (Milwaukee, Makita). Also researches on products and brand awareness helped to improve the quality of products.
B&D knew they couldn’t copy their competitors; instead they suggested options for themselves and decided either to have a Sub-branding or to drop B&D name from professional tradesmen segment.
Makita Electric of Japan had practically taken over the professional power tools since it entered the US market a decade ago. •
Makita's success was such that it held 80% share
Market share for the Professional tradesmen segment dropped to 9% which is low compared to competitors (Makita=50% & Milwaukee=10%). •
The company lost money for a period of 5 years
Raised long term debt to $4.2 billion
B&D had no strength in the Professional Tradesmen segment •
Makita had staked out leadership positions in virtually all products •
Trades people viewed all B&D products as for home use only •
Both Milwaukee and Makita priced at premiums over B&D
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