Black and Decker
Problem Statement: In January of 1991, the senior management of Black & Decker - the world's largest producer of power tools headquartered in Towson, Maryland, had to decide the most efficient way to grow B&D's business in the Professional-Tradesmen Segment in which they only managed to capture 9% market share. Superior growth opportunities seemed to be emerging in this segment which was growing at 9% growth rate.
Power Tools Market: The Power Tools market in the U.S was a $1.5 billion market with three segments: Professional-Industrial Tools, Professional-Tradesmen Tools and Consumer Tools. In the Consumer Tools segment the targeted consumers were people who bought tools for their own home use. This segment represented the second largest segment in the power tools market with a growth rate of only 7%(exhibit 1). The largest of the three segments was the Professional-Industrial segment which targeted commercial contractors, however this segment has been showing no growth. Opportunity exists in the Professional-Tradesmen segment which has been growing at 9% growth rate. Therefore, B& D can increase its power tools business by taking advantage of this opportunity in the market. The threats of this segment comes from the competitors, especially Makita with its 50% market share.
Company: Black & Decker is a global marketer and manufacturer of quality power tools, hardware, and building products used in and around the home and for commercial applications. The objective of the company is to at least double its Professional-Tradesmen segment share from the existing 10% to 20% within three years by taking some shares away form its biggest competitor, Makita. Another objective of B&D is to increase its operating income from 10% to at least 12%.(ex ...