Black and Decker Case Solutions

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Then there was the distribution problem.

Most of big-distributors like Home Depot were selling the products of Makita in huge locations in such big quantity. This strategy helped out Makita to rise in terms of economic growth and profits.

Despite it emerged from Black and Decker surveys that the brand was seen as reliable and with a good performance, Makita was still pricing itself as a premium price product, with 10% price difference over Black and Decker.

QUESTION #3: What is Makita's competitive strategy and what role does Milwaukee play?

Makita as afore mentioned, set up a huge dominance on the distribution chain, especially with some huge distributors in the US.

Makita also focused itself in another segment of market, by trading in Membership Clubs, which weren’t touched by Black and Decker, due to company’ s decision of no putting their products there, afraid of a possible trading down strategy. This behavior gave Makita’s a kind of monopoly because it was a direct move to target tradesmen.

Then there was the good baseline option given by the company for all the 3 major categories cited before, in particular for product strengths, like Skil in Circular Saws.

Milwaukee was a better perceived brand, a price premium product, with a general better awareness than B&D , according also to “Consumer Agreement Data” for 5 different series of qualities.

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QUESTION #4: Which action alternative should Black and Decker pursue?

Black and Decker therefore, decided to refocus its strategy in three directions:

- Harvest professional-tradesmen channels;

- Sub-branding Black and Decker;

- Dropping Black and Decker from the Professional-Tradesmen Segment.

Among these possible choices, the management of B&D decided to pursue the second strategy, due to the possibility to exploit the high ranking and awareness index B&D had (98%) and the possibility to develop a better product differentiation and expanding at the same time.

To exploit and then obtain good results later, B&D management decided to exploit the “DeWalt” brand (included in the company’s portfolio of brand purchased) and to develop the the sub-brand “Piranha by Black and Decker”