DeWalt Industrial Tool Company
1. Executive Summary
Black & Decker's power tools division represents the largest product group,
accounting for 29% of the company’s US revenue.
The executive summary
in Section 1 offers a
succinct overview of the
key aspects of the
The power tools market comprises three segments: consumer, industrial, and
tradesmen. Although Black & Decker is the market leader in the consumer and
industrial segments, it has only 9% share of the tradesmen segment. Furthermore,
despite the strength of Black & Decker’s brand and the quality of its tools, the
company profitability in this segment was virtually zero.
This plan outlines our key marketing activities directed at establishing Black &
Decker’s market leadership in the tradesmen segment by launching a new set of
products and services under the DeWalt brand.
Section 2 follows the 5-C
framework and is
focused on the broad
2. Situation Overview
2.1. Market Overview
The power tools market comprises three types of customers: (1) consumers buyers who use power tools around the house, (2) tradesmen - small businesses
and independent contractors, such as carpenters, plumbers, and electricians
working in residential construction - using power tools on the job; and (3)
industrial buyers, such as companies that purchase power tools for employee use.
The key attributes that customers typically consider when making a choice are:
power, reliability, service, brand image, and price. The relative importance of
these factors for each of the three segments is shown below:
Key Customer Segments in the Power Tool Market
Power tools are distributed through a variety of channels that include industrial
supply companies (W. W. Grainger), wholesale distributors (serving smaller
retailers), large home improvement centers (The Home Depot, Lowe's), smaller
It identifies an unmet
customer need that the
company aims to fulfill
with its offering.
hardware chains (Ace Hardware, ServiStar), independently owned hardware
stores, and mass merchandisers (Walmart, Kmart).
The key competitors in the US power tool market include Black & Decker,
Makita, Milwaukee Tools, Ryobi, Skill, Craftsman (manufactured by Black &
Decker and sold as a private label by Sears), Porter-Cable, Bosch, Hitachi,
Panasonic, and Hilti.
Economic. GDP has increased over the past three years; home and business
construction has increased by 3%.
Business. Mobile phone penetration has allowed consumers to have greater
ability to compare prices; online sales of power tools have increased by 11%
over the last 3 years.
Technological. Battery technology has improved to allow more non-corded
Sociocultural. Not expected to be an important influence.
Regulatory. Not expected to be an important influence.
Physical. Not expected to be an important influence.
2.2. Company Overview
Black & Decker is the world's larger manufacturer of power tools, electric lawn
and garden tools, and residential security hardware. Black & Decker’s five largest
product groups are: power tools (29% of Black & Decker’s US sales), household
products (15%), information systems and services (11%), outdoor products (9%),
and security hardware (9%). Black & Decker is the market share leader in the
power tools segment, which is the largest contributor to Black & Decker’s growth.
The Black & Decker brand was frequently ranked among the top ten most
powerful brands in the United States.
Black & Decker targets all three customer segments: consumers, tradesmen, and
industrial buyers. Due to Black & Decker’s subpar performance in the tradesmen
segment, the focus of this plan is on the tradesmen.
Our ultimate goal is to improve the share of Black & Decker in the power tool
market from 9% to 20% in three years.
To achieve our ultimate goal, we have set the following objectives:
Customer objectives. Gain awareness, build preference, and foster adoption
of the DeWalt brand by tradesmen.
Collaborator objectives. Ensure product availability and promotional support
by the distribution channels catering to the tradesmen segment.
Competitive objectives. Focus marketing efforts on stealing share from
Makita, identified as the key competitor in the tradesmen segment.
Context objectives. None
Section 3 outlines the
company's ultimate goal,
as well as a series of subgoals (objectives)
focusing on customers,
competitors, and context.
Company objectives. Improve operating income from 10% to 12%.
4.1. Target Market
Description: Tradesmen - small businesses and independent contractors working
in residential construction and using power tools on the job.
Section 4.1 follows the 5C framework and is
focused exclusively on
the target market.
Section 4.1.1 identifies
the offering’s target
Value potential: Tradesmen represent 28% ($420M) of the US power tools market
and are the fastest growing (9%) segment of this market.
Value drivers: Performance (power, precision, and ergonomics), reliability,
service, and brand image.
Demographic profile: Small businesses and independent contractors (carpenters,
plumbers, and electricians) working in residential construction.
Behavioral profile: Use power tools on the job; read trade press (Builder and
Electrical Contractor); visit trade shows and home improvement stores, including
large home improvement centers, such as The Home Depot and Lowe's, and
smaller hardware chains, such as Ace Hardware and ServiStar; and independently
owned hardware stores.
A detailed description of DeWalt’s customers is given in Exhibit 1.
Distribution channel partners: Wholesale distributors (serving smaller retailers),
large home improvement centers (The Home Depot, Lowe's), smaller hardware
chains (Ace Hardware, ServiStar), and independently owned hardware stores. A
detailed description of DeWalt’s collaborators is given in Exhibit 3.
Section 4.1.3 identifies
the key collaborators that
will facilitate the success
of DeWalt offerings.
Section 4.1.4 identifies
the key competitors.
Makita Electric (50% market share), Milwaukee Tools (10%), Ryobi (9%), Skill
(5%), Craftsman (5 %), Porter-Cable (3%), and Bosch (3%). A detailed
description of DeWalt’s competitors is given in Exhibit 4.
Economic context: Recession, resulting in high unemployment, limited money
supply (credit), increased inﬂation, and slow GDP growth.
Business context: Rapid growth of new home construction and remodeling prior to
the recession; consolidation of home improvement retailers and rise of big box
home improvement centers, including The Home Depot and Lowe’s.
Regulatory context: Price dumping allegations against some of the Japanese
manufacturers, including Makita, raising the possibility of imposing import duties
on certain tools imported from Japan.
Section 4.1.5 outlines the
specifics of the context in
which Black & Decker
will launch the DeWalt
DeWalt Industrial Tool Company is a strategic business unit of Black & Decker.
A detailed description of DeWalt is given in Exhibit 2.
Section 4.2 follows the
4.2. Value Proposition
4.2.1. Customer Value
184.108.40.206. Value Proposition
Our value proposition to the tradesmen is offering high performance, reliable tools
backed by a national service and quality commitment unparalleled in the power
tool industry. Our offerings will deliver greater value to tradesmen than the
competition on each of the key attributes important to tradesmen as shown in the
following table (the first set of ratings reflect the importance of each attribute to
tradesmen and the remaining ratings reﬂect the performance of each competitor
on these attributes):
DeWalt’s Value Proposition
Section 220.127.116.11 outlines
the key benefits of
DeWalt products for
target customers. It
identifies the key drivers
of customer value and
18.104.22.168. Positioning Statement
For the tradesman who uses power tools to make a living, DeWalt offers
dependable professional tools that are engineered to be tough and are backed by a
guarantee of repair or replacement within 48 hours.
Section 22.214.171.124 identities
target customers and the
main benefit of the
DeWalt offering for these
4.2.2. Collaborator Value
126.96.36.199. Value Proposition
Monetary value: Potential to increase sales volume and proﬁt margins.
Section 188.8.131.52 outlines
the key benefits of the
DeWalt offering for
Strategic value: Increased customer traffic supported by a large promotional
budget, streamlining procurement process by having a single supplier for both
consumer and professional segments, price protection from discount retailers.
184.108.40.206. Positioning Statement
DeWalt power tools are a better choice for retailers than Makita because they
offer price protection from discount retailers.
4.2.3. Company Value
Section 220.127.116.11 outlines
18.104.22.168. Value Proposition
Monetary value: Potential to increase market share from 8% to 50% and increase
margins from 5% to 10%. Increase the valuation of the company by creating a
Strategic value: Ensures leadership positioning in the growing tradesmen
segment. Solidifies Black & Decker’s relationship with retailers by offering an
attractive product portfolio that enables retailers to have a single-source supplier
for both consumer and professional segments.
22.214.171.124. Positioning Statement
DeWalt power tools are a great choice because they enable Black & Decker to
achieve its profit goals.
Section 126.96.36.199 outlines
the value of the offering
for the company.
Because the key aspects
of company value are
reﬂected in the
company's goal, this
section restates the goal
outlined in Section 3.
Section 188.8.131.52 identifies
the internal positioning
of the DeWalt offering.
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