The Black and Decker Corporation Case Study Essay

The Black and Decker Corporation Case Study - Essay Example Case Study Synopsis A. Company Overview; Dissecting the Case The Black & Decker Corporation is an American firm that manufactures and markets power tools, power accessories, fastening systems, products for home improvements, and hardware. It manufactures its products in eleven countries spread worldwide, and markets those in a hundred plus countries. Its biggest markets are the United States, which accounted for 55 percent of all revenues in 2008, and Europe, for 25 percent in the same year. 2008 revenues were US 6.086 billion dollars, while gross margins were 32.8 percent for that year. By product group contribution, power tools contributed 73 percent of all revenues in 2008, at US 4.3 billion dollars, followed by hardware and products for the improvement of the home, at US 900 million dollars, making up 15 percent of all revenues. The balance was made up for by revenues from fastening systems, which was the smallest product group by revenue for that year, accounting for 12 percent of all sales, valued at US 700 million dollars (Black and Decker, n.d., pp. 1-14). By way of a look forward, by 2012 the Black & Decker Corporation had ceased to be an independent firm, having been bought out by Stanley Works in 2010, so that the merged entity had come to be known as Stanley Black & Decker Inc.(Google Finance, 2012; Stanley Black & Decker Inc., 2012; Black and Decker, n.d.; Reuters, 2012 (b)). ... The hypothesis is that the traditional market strengths of the original Black & Decker Company had something to do with this share price appreciation(Reuters, 2012; Google Finance, 2012; Reuters, 2012 (b)): Image Source: Google Finance, 2012 B. Business Groups and Market Segments Three product groups serve as the organizing principle of the organization. These product groups are, as already mentioned earlier, power tools, product for home improvement and hardware, and fastening systems. Of the three, as has been noted earlier, power tools make up the bulk of the revenues (73 percent), followed by home improvement at 15 percent, and fastening systems at 12 percent of all revenues. Absolute profits rankings are the same, with power tools contributing the most to profits, followed in the same order by the two other product groups (Black & Decker, n.d., pp. 1-14). Three different market segments for the power tools product group, the largest product group, have differing characteristics, defined along customer type. As discussed earlier, these are industrial users, general consumers, and professionals. Of the three, the company has had success with industrial users and general consumers, while as noted earlier, prior to the launch of the DeWalt brand, the corporation had suffered anemic following among professionals, owing to the market perception that the company's products were inferior (Black & Decker, n.d., pp 3-5). Moreover, the three market segments also differ in some other profound ways. Industrial users are the most demanding, requiring that products show resistance to wear and resilience, even as the rewards include long-lasting relationships with buyers, and large and frequent orders. Professionals, using the products as essential trade tools,