The Black & Decker Corporation (a): Power Tools Division

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- Previous attempts to rebuild B&D name not successful

- The B&D name is too tarnished in this segment to continue use. Association with the name is only valuable in the service and warranty space.

Option 3:

Drop the tainted Black & Decker name from the Professional Segment: Yes

- New brand entry, backed by B&D service and warranty handling.

- Also needs to be differentiated from consumer segment products by colorization.

- Potential Barriers:

- Building a new brand from the ground up takes time. Three year expectations would not be deliverable as awareness needs to be built.

- Unexpected consequences in consumer segment of pulling Black & Decker from professional market

- Color options limited

- Potential Entry opportunities:

- Black & Decker owned DeWalt brand saws have a very high brand recognition and durability/best-of-class reputation in the Professional Segment.

- Customers surveyed in prior research indicated a 51% Purchase Interest in DeWalt brand tools, and an even higher purchase interest of 58% when DeWalt is being serviced and distributed by Black & Decker.

- Current tools durability, performance and reliability can compete in this market from day one

Recommendation: Go with option 3

- Utilize the DeWalt brand name on all professional segment tools with service and warranty handling endorsement by B&D

- Focus market entry under Dewalt name for the tools identified in research as having the highest quality, entry order determined by market share. (Exhibit 1)

- Strategically enter the Home Center and Two-Step distribution channels at the same price point as Makita brand tools.

- Utilize “Construction Yellow” as the brand color of DeWalt tools.

Financial Forecasts:

- Moving into this segment requires a 20% market share in 3 years by board.

- Estimated spending per customer per year is $1,000 on three new tools (1000/(3000/10)), giving us an approximate cost per unit of $333

- Total market is at $420M annually, giving us unit sales of 1,261,261

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