Black & Decker Power Tools Division - Case Study

Module | Session | Course/Theme | Case | Who | When | Where | Case Leads/Due Date | T1 | 8 | Winning Through Marketing Management | Black & Decker – Power Tools Division | Joseph Galli, VP of Sales and MarketingNoran Archibald, CEO | January 1991 | Towson, MarylandUnited States | November 28, 2012 | What – Situation/Issues/Risks/ Decision | 1. B&D lost its market share of professional-tradesmen tools segment against Makita Electric of Japan 2. Makita held an 80% share in cordless drills, the single largest product category and a 50% professional-tradesmen tools segment share overall compared to 9% share of B&D 3. B&D maintained #1 market position in the Consumer and Professional-Industrial segments; and only 9% market share in Professional-Tradesmen segment | Company Business Model | SWOT | Competitors | PEST (political, economic, social, technological) | * B&D was the world's largest producer of power tools, power tool accessories, electric lawn and garden tools, and residential security hardware. * Power tools market was categorized in three segments i.e. * Professional-Industrial Tools – commercial contractors working on large projects where corporation generally buy tools for their employees * Professional-Tradesmen Tools – individual contractors such as carpenters, electricians, plumbers, roofers, framers, etc. bought from Home Depot, Ace Hardware … etc. * Consumer Tools (35% market share) – consumers purchased tools for “at home” use from mass merchants e.g. Wal-mart, Kmart and hardware stores * Nolan became CEO in 1986 with 1st profitable year (~$50 million) after 5 consecutive years of losses, growth continued year after year reaching to an operating of income of ~$500 million in 1990 * 1981 – 1985 company lost money with a $158.4 million loss in 1985 * B&D $4.8 billion sales in 1990 (50% revenues from US and 50% from outside world) * Substantial brand equity i.e. #7 in US and