The Black & Decker Corporation Household Products Group: Brand Transition

1. How good or bad is the acquisition by Black and Decker? Evaluate the same.
The main objective of the acquisition was: * To gain access to house ware buyers * Resolve to develop a family of products that could address wide spectrum of house wares

Following were the reasons for Black & Decker acquiring GE House wares division:

1. Black and Decker (B & D) was having slower growth rate in the power tool marker worldwide and at the same time it was the increasing foreign competition. 2. Black and Decker (B & D) saw an opportunity in American housewares market, B&D had expertise in small motor production and cordless appliance technology to produce ‘Dustbbuster’, which was proved with the success of its first product in this market - the rechargeable hand-held vacuum cleaner. 3. B & D had almost 40% sales in the European market, whereas GE had major presence in US market, this would help B & D capture the global market. 4. B & D products were sold only in the hardware market and to penetrate the market B & D had to have presence in the housewares sections of retail chains. The acquisition gave B&D access to housewares buyers 5. GE’s housewares Division was the largest competitor in the US electric housewares market and its products ranked first or second in most of the categories of appliances. Together the firms could trap global markets as GE has a major presence in U.S market. 6. The acquisition of GE’s housewares division would launch B & D on a course to transform the company from a power tools manufacturer to a consumer goods company. The new B&D offered one of the broadest lines of any manufacturer, competing in 17 product groups.

From Exhibit 3 and 4:

GE sales revenue in 1983 was $500 million