Tfc Case

Case Analysis:

The Black & Decker Corporation (A): Power Tool Division

Sid Mehta

1. What is the cause of Black & Decker’s 9% share vs. Makita’s 50%?

1. Brand misconception

The professional tradesmen considered B&D’s products much suited better for consumers. This conception bought B&D towards the lower end of the spectrum amongst the Professional Tradesmen Segment buyers. B&D’s consumer products don’t necessarily lack quality but rather are poorly differentiated. The product color makes it difficult for the professional segment buyers to determine the product class making it a psychological barrier to overall buying decision.

2. Inappropriate Professional Tradesmen Distribution channels

Exhibit 2 clearly shows that B&D lacks a comprehensive distribution channel especially where the major concentration of sales were by Professional tradesmen. Two-Step and Home Center Channels where the Professional Segment sales were 40% and 25% respectively Makita’s share was 55% and 45% where as B&D was less than 10%.

2. How does the buying behavior of Tradesmen impact the situation?

Buying behavior amongst the Professional Tradesmen is based on performance, quality, availability, functional benefits, brand perception and product services. While B&D provides high quality tools that provide all the functional benefits it lacks the brand perception which adversely affects its target consumers to choose other alternatives. In addition B&D is not heavily penetrated in the most common distribution channels associated with the professional tradesmen segment.

3. What is Makita’s competitive strategy and what roles does Milwaukee (the #2 brand in the segment) play? What are their vulnerabilities that Black & Decker might capitalize on?

|Makita |Milwaukee |

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