...The Black & Decker Corporation (A): Power Tools Division Black & Decker, the creator of the power tools industry, caters to the three major segments of the power tools business namely, Industrial, Tradesmen, and Consumer. D&B’s market share is almost the same as Milwaukee and Makita in the Industrial and Consumer segment but with regards to the Tradesmen segment, B&D is behind. Despite its major presence in the industry, it faces a problem in the Tradesmen segment which only holds about a 9% share. This problem has been caused by a bad perception of the tradespeople regarding B&D due to its expansion into the Consumer segment shown by its successful Dustbuster® hand-held vacuum. D&B’s expansion to the Consumer segment has proved to be successful but it has also affected D&B’s image with the tradesmen who worked on residential construction. One tradesman stated, “. . . Black & Decker makes a good popcorn popper, and my wife just loves her Dustbuster, but I’m out here trying to make a living. . .” Tradesmen such as, electricians, plumbers, framers, roofers and etc are workers who are expected to show up to work with their own tools and this segment usually purchase their tools from home centers; and they regularly purchase tools for replacement basing their choices on conversations between co-workers at the job site. The fact that the households of these tradesmen use D&B as house appliances makes them think that D&B products won’t...
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...A report of Team D-1’s Analysis Of The Black & Decker Corporation in 2000 Executive Summary Black & Decker had always been a market leader in the power tools industry. Many changes took place that helped out in the company in the short run, but hurt in the long run. In 2000 Black and Decker Corporation was still reeling from the financial and strategic problems stemming from the company's acquisition of Emhart Corporation in 1989. In late 1998 Black & Decker management celebrated the completion of an almost decade-long effort to divest nonstrategic business gained through its 1989 acquisition of Emhart Corporation and expected the company to enter a long-awaited period of growth as its entire management refocused its attention on its core power tools, plumbing, and security hardware business. Archibald believed that "This portfolio restructuring will allow us to focus on core operations that can deliver dependable and superior operating and financial results." However the portfolio restructuring did little to improve the market performance of the company's securities. Yet Archibald and the management continued to express confidence that the company's streamline portfolio would allow Black & Decker to achieve revenue and earnings growth that the market would find impressive. So far the 1998 divestitures have not produced steady increases in the company's stock price, but look promising for the future due to the efforts to refocus efforts on the successful power tools...
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...Black and Decker Corporation Progress Report Finance Group Project Focus G.T. Link The corporate image of Black and Decker has gone through many corporate changes to keep a competitive advantage and ultimately see larger increases in the share price. Black and Decker is concentrated as a global manufacturer and marketer of power tools and accessories, hardware and home improvement products, and technology-based fastening systems. Due to the maturity of the market, it is essential for Black and Decker to remain a leader in product innovation and to get out of unprofitable business lines. The acquisition of Emhart resulted in many unprofitable business segments. If the acquisition was to work it was vital for Black and Decker to refocus on its core power tools, plumbing, and security hardware businesses. When Nolan Archibald was hired as CEO, an intense restructuring period set in. Inefficient plants were closed down and the development of new and existing products was developed in the new and existing plants. This also resulted in a large loss in overhead expense due to the loss of 3,000 jobs. Many shareholders were uncertain about the potential success of the Emhart transition due to the large debt/equity ratio. It took 2.7 billion in financing to acquire the company. Black and Decker sold off a total of $566 million in assets. This was a great step forward due to the $560 million dollars in goodwill added back to the balance sheet, which will hopefully...
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...The Black & Decker Corporation (A): Power Tools Division University of South Carolina MKTG 701 Spring II 2013 Jonathan Chandler Heidi DiFranco Pamela Hammond Telissa McElveen The Black & Decker Corporation (A): Power Tools Division SUMMARY Black & Decker franchise holds nearly 30% market-share overall of The U.S. Power Tools Market. B & D’s research on tradesmen’s perceptions of supplier’s quality has shown that they are ranked in the 3rd tier out of 4 tiers in the marketplace, which is due to the fact that B&D are viewed more as a consumer brand, and perception of tradesmen’s that B&D’s products are of inferior quality, less durable/rugged for the required work conditions. These coupled with the lack of color differentiation makes B & D’s products not product tradesmen are proud to own, reflected in the market-share. 1. Why is Makita outselling Black and Decker 8 to 1 in account which gives them equal space? Ever since Makita entered the professional tradesmen business in the United States, the company has been a major competitor for Black and Decker. In fact it is outselling Black and Decker in one location 8 to 1, mainly due to brand, durability, and quality perceptions. Black and Decker’s sales in the consumer segment are very strong, but unfortunately that does not have a good impact on the brand perception. Tradesmen view all Black and Decker products as for use at home rather than on the job. Products that are used at home (every...
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...For the exclusive use of S. Kaya, 2015. Harvard Business School 9-595-057 Rev. March 30, 2001 The Black & Decker Corporation (A): Power Tools Division Joe, I like you guys. But, look, I give Makita 10 feet of space. I give you 10 feet of space. They outsell you 8 to 1. What are we going to do about that? In January 1991, statements like this no longer surprise Joseph Galli. Black & Decker’s (B&D) vice president of sales and marketing for power tools had heard similar sentiments expressed by many trade accounts. Makita Electric of Japan had practically taken over the professional power tools for tradesmen business since it entered the United States market a decade ago. “Tradesmen” was one of the three major segments of the power tools business—the others being “Consumer” and “Industrial.” “Consumer” represented “at home” use, while both “Tradesmen” and “Industrial” covered professional users. The distinguishing characteristic of the Tradesmen segment was that these buyers, such as a carpenter, bought tools for their own use on a job site. In Industrial, the buyer was generally a corporation purchasing tools for use by employees. By late 1990, Makita’s success in the Professional-Tradesmen segment was such that it held an 80% share in cordless drills, the single largest product category, and a 50% segment share overall. B&D had virtually created the portable power tools business in the United States beginning in the early 1900s. While it maintained the #1 ...
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...Introduction Skil Corporation is a portable power tools manufacturer that was acquired by Emerson Electric Company in 1979. When Skil was first acquired, it had mediocre financial performance. Its main competitors in the portable power tool industry were Black & Decker, Sears, and some Japanese manufacturers. In 1979, the electric power tools were making up the majority of the portable power tool industry. Practical Applications The Competitive Environment - The main competitive force for Skil was rivalry among present competitors. Skil and Black & Decker were two competing companies that were the first in the industry to begin using high-strength plastic in their tools, which had lead to great reduction in cost. In 1979, the electric power tool market in the United States made up 37% of the worldwide market ($868 million out of $2,350 million). In the United States during 1979, mass merchandisers such as Montgomery Ward, and J.C. Penney were the primary sellers of Black & Decker and Skil portable electric power tools. Home centers were a steadily growing channel for professional and consumer power tools, and both professionals and consumers shopped at them. Home centers were growing competition for mass merchandisers, with sales of $83 million in 1979 and growing at 13% annually. In terms of global electric power tool market share, Black & Decker, Makita, Bosche, Hitachi, and Skil ranked the highest in order of share percentage. Black & Decker held approximately...
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...To: Professor John Swassy From: Rashid Vanoni Date: February 21 Black & Decker and Bosch The U.S Market for Power Tools The power tools industry in United States generates approximately $8.6 billion in boost growth and profit margin. The U.S. power tools industry is dominated by these major companies: Black & Decker that posses 9.3% market share., China’s TTI, Bosch., DeWalt and Craftsman . Thanks to all largest home centers these manufactures dominated the model of supply structure of this power tool market. Power tools as drills, saws, routers, and lathes with motor attachment that helps to reduce the work charge that are difficult to perform if you are using your hands. Black & Decker and Craftsman are the most popular brands among equipment owners, Black & Decker report 72% owning Sears Craftman brand. Far Away we can position Dewalt in the list owning 32%. Bosch increase in the year 2007 their global sales, but the company stated that the power tool sales fell in United States all of this due to the economic crisis. Bosch still the cordless strongest seller in this division. In the United States mostly 64 % of the people own some power tool equipment. These people share certain characteristics. The males are the ones that possess the mayor roll in the market of power tools corresponding to them the 68 % , by age between 35-64 posses 68% , race 70% corresponding white people and with a household income above $50K which is the 72% of the...
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...BLACK & DECKER Black & Decker Corporation (B&D) tried to run a diversification strategy. During the 1980’s Black and Decker had established themselves as a leader in the power tool industry. However, they had a feeling that that the market for such tools was maturing to the point where expansion within the industry would provide little or no additional revenues so they decided to diversify. Black and Decker began their expansion operation by acquiring General Electric’s housewares business for $300 million in 1984. The success of the GE deal, and the reorganization efforts of their new CEO Nolan Archibald, led Black and Decker to continue on this path of acquisitions and diversification in other areas. B&D then tried to acquire American Standard Inc. which had an impressive $127 million profit in 1987 and was in excess of the $70 million that was generated by B&D. But then, the acquisition was unsuccessful. Even after the failure, they did not hold back from their diversification strategy and acquired Emhart Corporation, a diversified manufacturer of industrial product, for a $2.8 billion in March 1988, a price that was over by 33% of the Emhart’s preannouncement value. The deal was considered unfavorable for B&D because its stock price dropped 15 points after the announcement of the acquisition. With this acquisition, B&D incurred a debt of &4 billion. So from 1993 – 1996, they started to sell the segments of Emhart that did not prove to be strategic...
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...I. PARTIES TO THE CASE: Kenneth L. NORD, Plaintiff-Appellant, v. the BLACK & DECKER DISABILITY PLAN, Defendant-Appellee. II. FORUM: The district court ruled in favor of Black & Decker Corp. The 9th Circuit Court of Appeals reversed III. STATUTE(S) INVOLVED IN THE CASE: The court is being asked to interpret if Black and Decker denial of his disability benefits violated ERISA. The court must determine whether the claimant is entitled to social security disability benefits. IV. STATEMENT OF FACTS: Kenneth Nord is a former employee as a Material Planner for Kwikset Corporation, a subsidiary of the Black & Decker Corporation. The responsibilities that Nord had in his position include ordering goods, interacting with vendors, and maintaining inventory levels. For the most part, this position is sedentary, but it does require up to six hours of sitting and up to two hours of standing or walking per day. Throughout his employment, MR. Nord was enrolled in the Black & Decker Disability Plan, this plan grants complete discretion to the plan manager to make disabilities determinations. In addition, this plan also gives the plan manager the authority to distribute one or more responsibilities to a Claim Administrator....
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...Harvard Business School 9-389-005 rP os t September 15, 1988 Skil Corporation op yo On March 23, 1979, Emerson Electric Company acquired Skil Corporation, a manufacturer of portable power tools, for $58 million. With sales of $2.6 billion in 1979, Emerson Electric produced a broad range of electrical and electronic products and systems. Emerson Electric Company Emerson Electric, originally a manufacturer of electric motors and fans, had gradually expanded into a broad range of consumer and industrial products. It classified its businesses into commercial and industrial components and systems; consumer goods (including portable electric tools); and government and defense products (see Table A). Table A Sales and Pretax Income of Emerson Electric by Business Segments ($ millions) Sales $1,380 698 176 (20) tC Commercial and industrial Consumer Government and defense Intercompany sales 1978 Pretax Income $201 123 21 1979 Sales Pretax Income $1,570 865 199 (20) $232 141 24 Source: Company annual reports No Emerson’s business units manufactured products principally in electrical and electronic fields, such as electric motors, controls, drives, and heating, ventilating, and air conditioning equipment. The company also manufactured power chain saws, gas cutting and welding equipment, vacuum cleaners, bench power tools (which it sold to Sears), and other consumer goods. Do With a stated goal...
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...Transformation of Black & Decker Ishita Aditya 11BM60074 Black & Decker Corporation is a corporation based in Towson, Maryland, United States, that designs and imports power tools and accessories, hardware and home improvement products, and technology based fastening systems. In 1843, Frederick Stanley started a small shop in New Britain, Connecticut, to manufacture bolts, hinges, and other hardware from wrought iron. With superior quality, consistent innovation, and rigorous operational improvement, Stanley’s company defined excellence, and so did his products. In 1910, S. Duncan Black and Alonzo G. Decker started their shop, similar in size at first, in Baltimore, Maryland. Six years later they changed the world by obtaining the world’s first patent for a portable power tool, and the company they built has been changing the world ever since. Both companies grew in parallel over the ensuing decades, amassing an unparalleled family of brands and products and an even more impressive wealth of industry expertise. In 2010, the two companies combined to form Stanley Black & Decker, to deliver the tools and solutions that industrial companies, professionals, and consumers count on to be successful when it really matters. Just as it was in 1843, the company’s passion for excellence is seen around the world in disciplined operations, purposeful business growth, and loyal customer relationships. Transformations in Black & Decker During...
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...Valuing Publicly Traded Equity Securities: The Black & Decker Corporation (BDK) [1] I. Introduction This teaching note describes the valuation of publicly traded equity securities using the Discounted Cash Flow (DCF) and Price/Characteristic (market comparison) approaches, with a specific spreadsheet example for The Black and Decker Corporation. Free cash flow valuation and comparables (comps) are key tools in fundamental analysis, the process of picking stocks with high expected return based on an analysis of the company. In theory, buying stocks of companies that are undervalued in the stock market will produce high returns as other investors slowly realize the company’s true value and quoted share prices increase to match that value. Three basic ideas underlie the application of discounted cash flow (DCF) analysis. First, the value of a company is ultimately derived from the cash that can be extracted from that company, and more cash is preferred to less. Second, cash received in the future is not as valuable as cash received today. Third, risky cash flows are valued less than cash flows known with relative certainty. The process of valuing publicly traded equity using DCF involves three steps. First, condensed financial statements, also called pro-forma statements, are forecasted several years into the future. Second, the forecasted statements are used to calculate free cash flows for the entire firm, which are then discounted by the...
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...Skil Corporation On March 23, 1979, Emerson Electric Company acquired Skil Corporation, a manufacturer of portable power tools, for $58 million. With sales of $2.6 billion in 1979, Emerson Electric produced a broad range of electrical and electronic products and systems. Emerson Electric Company Emerson Electric, originally a manufacturer of electric motors and fans, had gradually expanded into a broad range of consumer and industrial products. It classified its businesses into commercial and industrial components and systems; consumer goods (including portable electric tools); and government and defense products (see Table A). Emerson’s business units manufactured products principally in electrical and electronic fields, such as electric motors, controls, drives, and heating, ventilating, and air conditioning equipment. The company also manufactured power chain saws, gas cutting and welding equipment, vacuum cleaners, bench power tools (which it sold to Sears), and other consumer goods. With a stated goal of being the so-called best-cost producer in as many of its markets as possible, Emerson stressed cost reduction. Emerson defined best cost as Table A millions) Sales and Pretax Income of Emerson Electric by Business Segments ($ 1978 Sales Commercial and industrial Consumer Government and defense Intercompany sales $1,380 698 176 (20) Pretax Income $201 123 21 Sales $1,570 865 199 (20) 1979 Pretax Income $232 141 24 Source Company annual reports 2 the lowest-cost producer...
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...Black and DECKER: power tools Case study Problem Statement Black and Decker has established its brand strength to be among the top ten firms in the United States. By creating the portable power tools business in the early 1990’s and being the world’s largest producer by the end of the decade, the firm has been vouched for offering high quality, differentiated products and excellent service in the Professional-Industrial segment. Powerful brand perception has helped Black and Decker attain the number one position in the Consumer segment. Although Black and Decker has been leading in two of the three segments of the $1.5 billion portable power tools market, it could not make a significant impact in the Professional-Tradesmen segment that was fast growing at 9%. Black and Decker has managed to occupy only 9% with no profitability of the total segment share against Makita and Milwaukee who stand at 50% and 10% respectively. Despite Black and Decker’s success in the Consumer and Professional-Industrial segment, according to surveys conducted of tradesmen, results showed poor quality perception and lack of proud ownership of the tools for the use of job specific applications and instead are perceived to be ideal for home tasks. The low favorability of Black and Decker’s power tools in the Professional-Industrial segment as compared to Makita’s and others may be attributed to (among other factors) the incompetence in product differentiation through the use of color schemes across...
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...consumer markets, the circular saw being the strongest and best seller amongst those tools, which it also invented. Other power tools that Skil manufactured included mid-priced drills and roto hammers. Skil manufactured multiple different models for different countries, depending upon the local needs of the market. Majority of Skil's sales were to Hardware stores and Home centers, which served consumers and professionals alike, followed by Contractor supply and Mill supply. Skil Corporation was acquired by Emerson Electric company in 1979 as part of the latter's growth strategy which is now faced with the challenge of increasing market share in an industry where growth is saturated and market share dominated by players such as Black & Decker and Sears. The Portable Power Tool Industry: Attractive or not? Black & Decker was the leader in this industry with 75% of its sales coming from power tools. Overall, the industry is experiencing a growth rate of 2 - 3 % per year. In 1979, Black & Decker had close to 45% market share as compared to Skil with 12%. So purely from a growth perspective, the industry doesn't look very attractive. Moreover, the consumer segment demands low cost, high quality products and is brand-name sensitive, which seems to favor the industry leaders. Critical skills required Over the years, the traditional gap between professional buyers and do-it-yourself customers has narrowed down significantly. Both set of consumers demand high-quality...
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