Black and Decker Case Analysis
Black and Decker Case Analysis
Black and Decker Case Study
Company Overview
In 1910, Duncan Black and Alonzo Decker Sr. , started a machine shop and in 1917 they had a patent for the first portable drill. In 73 years, they became the largest producer of power tools and related merchandise. From it’s beginnings of power tools, Black and Decker has moved from the garage to the home. That is why we currently see a domination of the “Consumers” segment. In the 1990s, we see that almost half of our revenue is coming from outside the U.S.A. Our brand strength in the markets that we play a part in are quite strong, where we rank in the top 10 in the U.S.A and top 20 in Europe. We have a strong brand presences and a good market share in the Consumer and Industrial segments of the market, but a pitiful 9 percent standing in the Tradesmen segment.

Industry Overview
In the 1990s, the power tool industry was a 15 billion dollar industry. We have nonprofessional users making up 35 percent of the market, where people buy from places like Walmart and K-Mart, for their own personal use. Then we have the Professional segment, which we can divide into Tradesman and Industrial. The Industrial segment is made up of primarily contractors that do commercial work where distributors play a large part in the purchasing decision. Usually the tools are owned by the company. The Tradesmen segment, are made of tradesmen in residential construction. This segment is the smallest one but it has the fastest growth rate in comparison to the other segments.

The many separate product lines and divisions in Black and Decker with the combination in how they are manage it is a strength. Each individual division can benefit from the resources, capabilities and etc of the other divisions. With the synergy between the divisions, we can distribute our products faster, develop them faster and do all the things needed to create, maintain and sell a product faster. This can be seen when B&D acquired Emhart Corporation, in terms of the Kwikset locks. Where this product had doubled Black and Deckers revenue when it was integrated in their company, because of the connections that B&D provides.

The R&D division of B&D is a strength of it also. They roll out with successful product lines to appeal to the consumers, where we are strongest. That is mainly in the consumer segment, where can see our products like the Dustbuster doing very well. B&D has excellent innovation in the Consumer market segment.

Brand recognition is a strong point of B&D. It has a large consumer presence in the U.S.A and even Europe, where its in the top 10 and top 20 brands respectively. They have a 98 percent awareness rating in the U.S.A. Professional Tradesmen segment. This large brand presence lends to itself when new products are being shipped out. They usually do well, especially in the segments B&D is strong in, because of the large brand presence of Black and Decker.

One large current weakness is the large amount of debt that B&D carries. They have a large amount of debt from the aquisitons that they have acquired. At the time of the Emhart Corporation acquisition, they at a long term debt of $4.2 billion dollars , which represented 84% of the total capital. The brands from the acquisition and the doubling of the revenues, helped out in the short term but in the long term, the debt is crippling to an extent.

The other weakness is one of branding. The segment that B&D is having the most trouble with is Profession Tradesmen segment. That is because of the disregard of B&D tools by tradespeople. They regard Black and Decker tools to strictly just be of use at the home, which is bolstered by the fact of the very strong market presence of B&D in the Consumer Market segment. Also, their has been times where people bought products for home use and used it professionally, and that product failed. The quality and performance of the tools to tradespeople is a large part of the buying decision. When tradespeople perceive B&D’s products fit for only consumer use, they won’t buy them because the perceived consumer grade products can’t stand up to professional ones from other brands.

Black and Decker already has an large presence in Europe and other places that are not the U.S.A., where they can benefit by expanding their market share. Countries that are in developing stage need tools to build their infrastructure, this is where B&D can provide for them. The places typically have lower market saturation

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B&D And Largest Producer Of Power Tools. (April 12, 2021). Retrieved from