Black & Decker (SWOT analysis) - Research Paper Example

?SWOT Analysis Strengths Black & Decker is a global brand which is known as the best for its power tools and accessories. Black & Decker has a strongposition in the home appliances and domestic tools division. The brand is equally popular in Europe and U.S and is ranked among the top ten brands worldwide. Black & Decker has several sub brands which it can be used as strategic option for surviving in the competitive global environment. The brand has been divided into three segments namely domestic, tradesmen and professional industrial segments. Each segment is catered with products that satisfy the customers’ needs and requirements. The products offered by Black & Decker are diversified and this gives it much room and strength for growing. Black & Decker is capable of taking advantage from the economies of scale. Weaknesses Although Black & Decker is popular among the domestic consumers and delivers efficient results, the reputation of Black & Decker among the tradesmen is not satisfactory. They consider the Black & Decker products as unreliable, old fashioned and low quality. The professional segment is not satisfied with the color code of its products which is usually charcoal grey. They regard the color as monotonous and less professional. Black & Decker is not capable of acquiring as much market share as its competitor, Makita due to its low acceptance in the tradesmen category. Opportunities Since the market share of Black & Decker in the tradesmen category is only nine percent, the company can use its strategic options to make the most of this opportunity. As Black & Decker is popular among domestic consumers so it can offer more and improved products for this category to grab more market share and profits. Focusing more on marketing and advertising activities can help strengthen the brand image and reputation of Black & Decker. The distributors are not quite doubtful with Makita’s way of business so Black & Decker can stand out against it competitors by exploiting this opportunity. Changing the color of the Black & Decker tools from charcoal grey to yellow can appeal the tradesmen as yellow reflects safety and seems more professional. Black & Decker can make use of its sub brands to attract the professional tradesmen segment. Another idea could be to remove the Black & Decker label from all products in the mentioned category and market the products under the name of other Black & Decker brands which are absolutely free of any negative associations. Threats Competitors such as Makita and Milwaukee are a major threat for Black & Decker. They have a market share of more than fifty percent and have better brand awareness and reputation in the power tools market. The negative image of Black & Decker can also have negative impact on the consumer segment. If strategies aimed at the growth in the tradesmen segment fail, the company might face decline in revenues and reputation. 4 P’s Analysis Product Black & Decker is one of the world’s biggest manufacturers of power tools and accessories. The products range from the smallest of screwdrivers which are used rarely by domestic consumers to heaviest parts of machinery used at the industrial scale. The products are classified into two categories: home use and industrial use. The industrial segment is sub divided into tradesmen and industry level. The domestic consumers are a big fan of Black & Decker products and the company enjoys fifty percent market share from this segment. However, the share at industrial level is twenty percent and tradesmen account for nine percent only. Tradesmen are not quite satisfied with the Black & Decker products as they consider the tools less professional and less reliable. Although research and development is an ongoing process at Black & Decker and due to the company’s efforts, hundreds and thousands of products have become a part of the brand. Sub brands of Black & Decker are also popular at global level. Thus, the brand portfolio of Black & Decker is quite satisfactory and appeals the customers. Price A deep analysis of the market in which Black & Decker operates shows that the competitors such as Makita and Milwaukee are priced at premium as compared to our brand. Despite of being priced low than the competitors, Black & Decker has low sales volume because Makita has better brand perception and offer discounts to the distributors. Moreover, Makita’s products are available at low and better prices than in the home market, Japan. Placement Black & Decker products are made available to the end users through different distribution channels that target each of three market segments individually. W.W. Grainger of Illinois has played a major role in distributing the Black & Decker power tools to the industries. Professional tradesmen including electricians, carpenters, mechanics, gardeners etc prefer the ‘do it yourself’ type of tools and the distribution role played by Home Depot and Ace Hardware is worth mentioning. Home users purchase the Black & Decker tools from Kmart and Wal Mart which stock a lot of electric products for ready availability. Unlike its competitors such as Makita and Milwaukee, Black & Decker has not shown inclination towards discounted offers for distributors and Membership clubs. Also it has not taken any part in offering special products to customer on occasions such as father’s day. Promotion Black & Decker carries out extensive advertising campaigns for all three of its segments especially the consumer segment. This is because home consumers make fifty percent of the market share of the company and media advertising is one of the best ways to further entice and retain loyalty. Media advertising must also be carried in the professional tradesmen segment as this segment has a lot of potential and targeting it with the right marketing strategy can certainly bring in more market share as well as revenues. SWOT Matrix Strengths M I R Weaknesses M I R ?         Global brand ? ? ? ?         Poor reputation in the tradesmen segment 3 3 9 ?         Popular in US and Europe ? ? ? ?         Unable to reach the success level of its competitors 2 3 9 ?         Sub-brands which can always be used strategically to generate more revenues ? ? ? ?         Charcoal grey color is not appealing to the professional tradesmen 3 3 9 ?         Targets three segments individually ? ? ?         Opportunities M I R Threats M I R ?         Explore opportunities in the tradesmen segment ?? ?? ?? ?         Threat from competitors such as Makita and Milwaukee -3 -1 -6 ?         Focus deeply on the consumer segment ?? ?? ?? ?         Image will suffer if strategic options do not work out -2 -3 -5 ?         Change the color code of tradesmen tool to yellow ?? ?? ?? ?         Poor brand awareness -3 -2 -9 ?         Implement strategic options ?? ?? ??         Reference William M. Pride, O. C. Ferrell. Marketing Express.Boston: Houghton Mifflin Company, 2009. Print. Read More