Black & Decker Case Study

Black & Decker Case

Questions

Address the following questions with regard to the Black & Decker case study in up to two pages (one-sided) or two sides of one page. Do not use a font smaller than 12 or margins less than 1 inch. Please consider the writing rubric as you begin (available on Angel). Also, do not hesitate to use bullet points when listing items.

Briefly, what is the nature and background of the company? Black & Decker Corporation is an organization located in Towson, Maryland

They blueprint and trade in power tools and accessories, hardware and home improvement products, and technology based fastening systems (Wikipedia, 2011). For a long time, B&D brands magnetize great strength from the consumers and the Professional Industrial segments while its Professional-Tradesmen segment has been sour. This case analyzes different alternatives on how to gain profitable market share in the Professional-Tradesmen segment.

SWOT Analysis for Black & Decker

Use bullet points and feel free to use boxes here and elsewhere:

Strengths

• High brand awareness
• High service rating and high quality tools done in field test
• Small market share for Professional Tradesmen which makes it easy in the event they want make changes in their products line in this market segment.

Weaknesses

• Small market share in the Professional Tradesmen market segment.
• B&D brands are more focused on household products
• Professional Tradesmen do not associate quality with B&D products. Opportunities
• Fast growth opportunity for professional-Tradesmen (9%)
• Yellow color unused by other brands. Yellow represents safety.
• Makita does not have retailers’ channels to distribute their products, and B&D develop businesses with retail stores. |

Threats

• Yellow color is subjective; it can be interpreted otherwise rather than safety.
• No retail channels where Makita dominates.
• Other segments can be impacted if the new strategy planning for Professional Tradesmen does not work. |

In a sentence or two, what is the issue being faced here?

The issue faced here is the decline of the market share of the Professional Tradesmen segment and how to overcome that decline and gain larger market share in this segment of the market.

Briefly present the plusses and minuses of each of the three proposed options

Option 1

The Professional Tradesmen segment focus is to be profitable at the expense of other segments market shares. This cannibalization method can only be successful for the short run. However, in the long run, competitors may take over the other two segments market shares.

Option 2

Sub-branding B&D name. This option can only work for products that are already sub-branded; however if this strategy fails, the parents brand may suffer. Moreover, Professional Tradesmen can lose loyalty to B&D brand if their sub-brand is too much differentiated. Option 3: Drop the Black & Decker name. The percentage of purchase interest, which reflects consumers behavior toward the new brand, is higher when DeWalt brand is included in the survey (63%) compared to B&D (44%).

On the same token, one should consider that DeWalt brand may be an interest to consumers, but in fact not be a product that consumers may actually buy.

Indicate which alternative you would choose and explain why

Knowing that brand awareness has a big influence on an organization success or failure, let’s first determine Professional Tradesman needs or want:

Quality and durability issues rose from the fact that Tradesmen were using consumer quality power tools in their job sites; making those house products unsustainable. Lack of differentiation in B;D products design did not give them a competitive advantage in the Tradesmen market segment. To resolve the aforementioned issues, I strongly recommend B;D to create a new brand without B;D name attached to it that specifically targets Professional Tradesmen. From that new brand, B;D can build up a new different portrait representing durability, quality and any other features that competitors do not offer or provide. Moreover, the product differentiation can easily be distinguished by Tradesmen at their work place, especially if they differentiate by color, size and shape. What further steps would you take to help assure that your chosen course of action succeeds?

•  Closely work with tradesman to insure their needs are being met.
• Do some marketing campaign and ads targeting Tradesmen market segment.
• Implement competitive pricing.
• Develop retail distribution channel with Lowes, Home Depot since these stores sell for most part heavy duties and superior quality tools made for heavy duty jobs.