Black & Decker Power Tools Division

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

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What – Situation/Issues/Risks/ Decision

B&D lost its market share of professional-tradesmen tools segment against Makita Electric of Japan
Makita held an 80% share in cordless drills, the single largest product category, and a 50% professional-tradesmen tools segment share overall compared to a 9% share of B&D
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
Competitors

B&D was the world’s largest producer of power tools, power tool accessories, electric lawn and garden tools, and residential security hardware. The power tools market was categorized into 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 the US and 50% from the outside world)
Substantial brand equity i. e. 7 in the US and #19 in Europe out of 6000 brands
Acquired Emhart corporation in 1989 which doubled the revenue and also increased debt to $4. 2 billion i. e. 80% of the total capital

Makita electric, Milwaukee, Ryobi, Skil, Craftsman, Porter-Cable, Bosch

SWOT

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