Black & Decker Case
The Black & Decker Corporation Case
I. Problem Statement
While Black & Decker is one of the 10 most known brand in the US, the brand’s branch selling tools to the professional-tradesmen, which was the original heart of consumers since the creation of the company, is facing a branding problem. Indeed, the entire range offered to the professional-tradesmen segment is considered by those buyers as a bad brand compared to Makita’s brand. The market shares highlight this rejection of B&D’s brand : B&D has only 9% whereas Makita has 50% of the tradesman segment’s shares. The cause of this issue is not due of the quality of the products offered but only by the perception they have. The objective that the management has to reach is clear : increase market shares (from 9 to 20%) in this segment by giving to their products the credit in phase with the high quality they offer and emphasizing it with professional use.
II. Strategic Situation Facing B&D’s Management
A. Analysis of the Customers and the Market
The market of Professional-Tradesmen is a $420 millions sized, composed of professional users who work in residential constructions and with the highest growth in its category (9%). This is a interesting and competitive market with a level of renewal of $1000 per year by each customers, and an average expense of $300 per tools. These persons buy their tools by themself for their own use and they purchase it mainly in independently owned stores served by distributors (40%), Home centers (25%) and warehouse home centers (15%). Among this channel, the home centers is growing fastly. The characteristics demanded in this market are high performance, reliability and durability. To finish, they must appear professional and proud with the tools they use.
B. Analysis of the Competition
Within this market, we can focus on two main competitors : Makita and Milwaukee. About market shares Makita overwrites the market with 50% whereas Milwaukee is about 10%. In addition
I. Problem Statement
While Black & Decker is one of the 10 most known brand in the US, the brand’s branch selling tools to the professional-tradesmen, which was the original heart of consumers since the creation of the company, is facing a branding problem. Indeed, the entire range offered to the professional-tradesmen segment is considered by those buyers as a bad brand compared to Makita’s brand. The market shares highlight this rejection of B&D’s brand : B&D has only 9% whereas Makita has 50% of the tradesman segment’s shares. The cause of this issue is not due of the quality of the products offered but only by the perception they have. The objective that the management has to reach is clear : increase market shares (from 9 to 20%) in this segment by giving to their products the credit in phase with the high quality they offer and emphasizing it with professional use.
II. Strategic Situation Facing B&D’s Management
A. Analysis of the Customers and the Market
The market of Professional-Tradesmen is a $420 millions sized, composed of professional users who work in residential constructions and with the highest growth in its category (9%). This is a interesting and competitive market with a level of renewal of $1000 per year by each customers, and an average expense of $300 per tools. These persons buy their tools by themself for their own use and they purchase it mainly in independently owned stores served by distributors (40%), Home centers (25%) and warehouse home centers (15%). Among this channel, the home centers is growing fastly. The characteristics demanded in this market are high performance, reliability and durability. To finish, they must appear professional and proud with the tools they use.
B. Analysis of the Competition
Within this market, we can focus on two main competitors : Makita and Milwaukee. About market shares Makita overwrites the market with 50% whereas Milwaukee is about 10%. In addition