Business Groups and Market Segments of The Black and Decker Corporation - Case Study Example

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The company that is the subject of this paper "Business Groups and Market Segments of The Black and Decker Corporation" is an American firm that manufactures and markets power tools, power accessories, fastening systems, products for home improvements, and hardware…
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Business Groups and Market Segments of The Black and Decker Corporation
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Download file to see previous pages 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)). Meanwhile, a cursory look at the share price performance of the combined firm from the time of the merger shows that in general the merger has had a positive impact, with shares appreciating from the time of the merger by about 20 percent, from about US 60 dollars a share to around US 80 dollars a share peak achieved in early 2012.
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 with 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, tend to be more stable customers than consumers and are less conditioned by season. Consumer sales trends are somewhat affected by the seasons, with sales skewed somewhat upwards towards the December holiday season (Black & Decker, n.d., p. 3). DeWalt was launched partly to offset the weak image of Black & Decker products among professionals, and to shore up market share and loyalty/brand equity among the industrial users. As noted earlier, the weak position of the corporation among professionals was due to them associating the corporation's products with its offerings for the common consumers.  ...Download file to see next pagesRead More
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