Case Analysis

Black & Decker

Submitted by:

Group C Aji Lal Dev 2010PGP003 Deep Mehta 2010PGP014 Deepa Syal 2010PGP016 Jayant Kejriwal 2010PGP023 Kranti Rangineni 2010PGP030 Parminder Singh Saluja 2010PGP042

Problem Statement
Black & Decker is a one of the leading companies focusing on production of Power tools. In the industry there are three segments: Consumer, Professional Industrial and Professional Tradesmen. Black & Decker faced following issues: Black &Deckers professional tradesmen segment had the lowest market share. The leader in this segment was Makita Electric Company of Japan. There was a small growth rate in consumer segment and no growth in professional industrial segment. The consumer segment was the strength of B&D in spite of which the growth rate was small, which was a major issue. Even in professional industrial segment B&D was sharing its top position with Milwaukee Electric Company facing stiff competition. There was no growth rate in this segment. The tradesmen segment preferred the power tools offered by other companies and were not satisfied with B&D power tools.

Solutions for the problems

Black & Decker can solve its problems and position itself in all three segments by adopting the following measures: Focus on the segments it is doing well: They are consumer segments and professional industrial segments. Its strength is its product quality. It has achieved 7th rank worldwide. It can continue with tradesmen segment but aim to attain profitability and compromise on market share. Sub-branding: Currently B & D is doing sub-branding for consumer and industrial segments. Likewise, it can do the same approach for Tradesmen segment as well in order to woo the customers in this segment. Dropping the tools from Tradesmen segment or making them under some already established brand like Dewalt.

Strategies to be adopted
Black & Decker should concentrate on the growth of the sales in consumer and professional industrial segments. These would help it improve in its core competencies. It should do a market research on the reasons of dissatisfaction in the tradesmen segment. This will help them improve on the power tools supplied for this segment. Apart from drills, saws and sanders they should diversify their product depth. Changing the colour for product differentiation is also a good option to try out but should not be completely relied on. The negative associations related to the brand in

the tradesmen segment should be removed. Galli took the right decision of going with share option and changing the colour for differentiation. Taking away Makitas share would be difficult with membership clubs. The brand value should be kept high and the product quality should not be compromised on at this stage given the stiff competition in all the segments. It should aim at continue being #1 in the consumer segments.

Lessons learnt
Every product should be positioned well in the segment. The consumer segment products like choppers, mixers, coffee makers etc. worked well. The professional industrial segment products for construction and assembly lines also seemed to work well. But at the same time professional tradesmen segment products posed as negatives to the firm which should be worked on.