external analysis
Table of Contents
Problem/Opportunity Statement 4
Company and Industry definition
The Black and Decker Corporation is the world’s largest producer of power tools, power tools accessories, electric lawn and garden tools, and residential security hardware. Black and Decker Corporations holds an overall market share of 30% in the U.S. B & D was successful in achieving a sale of $4.8 billion in all their segments. B&D has been in the market for more than 73 years after receiving their first patent, innovation in power tools have enabled B & D to become the largest producer of power tool in the world.
External analysis
Buyer Power: Mid; The buyers of B&D products are divided into two categories, professional consumers and non-professional consumers. The non-professional consumers are the consumers that buy a product for their personal use or for home use, whereas the professional consumers are like the contractors that work on different large plants. The buyer power of non-professional consumers is not that strong, but the buyer power of professional consumers is quite strong since they have the power to specify the tool requirements and recommend specific brands.
The Threat of Substitution: High; With the presence of strong competitors that produce similar products increases the threat of substitution for B&D. Makita is one of the competitors that holds the power to substitute the B&D products as it holds a much higher overall market share than B&D.
Internal Analysis
Problem/Opportunity Statement
Black and Decker Corporation can introduce their new product for the professional Tradesmen segment under the name of Piranha. This will promote product differentiation and it will also increase the market share (Etzel, Walker and Stanton, 2007).
The company can re-position their brand name with DeWalt which can be considered a separate different brand that the company has acquired a long time ago which will help them in tapping the opportunity in the professional Tradesmen segment. This will be considered as a new brand entry that is backed by the service, warranty, and handling of B&D. Since the brand is suffering due to the brand name image, therefore it would be wise to rebrand the segment
Criteria
Strategy Evaluation
Strategy# 1: To Grow
Market share improvement: this strategy will enhance the brand perception which will directly enhance the company's market share.
Strategy# 2: To Grow
Market share improvement: Re-branding will help in changing the perception, attitude, and perceived brand image, which will positively lead to an increase in the market share of the company.
Strategy# 3: To Grow
Market share improvement: this strategy will enhance the brand perception which will directly enhance the company's market share.
Strategy Recommendation
From my perspective the ideal strategy would be option 2, as based on the above Evaluation of the strategy, it would be right to say that strategy 2 will be one of the most effective and feasible options for the company as if the black and decker re-brand themselves in terms of dropping their name from the professional tradesmen segment and can utilize the DeWalt with their services and black and decker distribution channel (Thompson, Scott, and Martin, 2017). This will help them in regaining their Market share, the main reason behind this is highlighted below:
Strategy Implementation
Tactics
When re-branding for a particular segment it is important to use the means of advertisement such as social media platforms, radio, and emails to build broader awareness for the new brand.
It is important to build on brand identity which is differentiated from the black &Decker, as using the bold color such as Yellow represent safety which is not used by any power tool brands.
Major problem
Contingency Plan
If problem 1 occurs then in that case, the company can take the following steps:
Highlight the USP of the product, emphasize how the company products are better than the competitor.
Use promotional methods to educate the people about the products, brand which will make it easier for people to connect with the brand and product, which will again make it easier for the people to accept the product.
References
David, F. and David, F., 2016. Strategic Management. Harlow, United Kingdom: Pearson Education Limited.