Black and Decker is an American powertool manufacturer that is headquartered in Towson, Maryland. Black and Decker isknown for having a strong brand image, as well as having high quality products.The three major segments of the power tools business are the Consumer segment, Professional-Industrialsegment, and Professional-Tradesmen segment. “Consumer” is for nonprofessionalusers, while “Professional-Tradesmen” and “Professional-Industrial” are forpeople who use these tools for work purposes. In the Tradesmen segment, peoplepurchase tools for their own use on a job site; but in the Industrial segment, thetools are bought for employees in a corporation.
Black and Decker leads in theConsumer and Professional-Industrial segments; however, it only has a 9% sharein the Professional-Tradesmen segment. Because Black and Decker are lacking in theProfessional-Tradesmen segment, it dilutes their image. Currently, MakitaElectric (foreign competitor) and Milwaukee Electric (local competitor) areleading in the Professional-Tradesmen segment.
Makita has a 50% market share inthe Professional-Tradesmen segment. One particular problem is that Black andDecker does not have color differentiation in their power tools. Black andDecker’s power tools are charcoal grey, while professional tool brands such asMakita and Milwaukee use colors such as teal and red. The case discusses three potentialways that may help Black and Decker gain a competitive advantage in the powertools industry. The first option talks about focusing on just the Consumer andthe Professional-Industrial segments, the second option talks aboutsub-branding, and the last option discusses dropping the name from theProfessional-Tradesmen segment.