The International Competitive Power Tool Market

Economic indicators can affect our business as well as the business of our competitors. Understanding their techniques for survival in this market is as important as understanding our customers. If a competitor has a new product coming out, we want to know how and when they will introduce it so we can be prepared to brace the changes that come along with it. How do we stand up next to our competitors in comparison? To understand how the Able Corporation will have to compete within the business environment, we must look at the competition and how they are strategizing for success.

Black and Decker
Black and Decker is the largest of the three businesses we will take a look at. A Fortune 500 company with revenues of over 6,500 million (CNN Money, 2006), Black and Decker employs approximately 25,375 people around the globe (Credit Risk Monitor, 2008). The international manufacturer operates in 11 countries and is marketed in more than 100 countries. According to the Black & Decker website, they strive to maintain a reputation for product innovation, quality, end-user focus, design, and value (Black & Decker, 2008).

Founded in 1910 by two entrepreneurs in Maryland, Black & Deckers’ first patent was for a drill with a pistol grip and trigger switch. This revolutionary idea branded with the Black & Decker trademark was the turning point for what blossomed into todays’ power tool industry with portable tools. The reach of this massive company encompasses several smaller companies including Baldwin Hardware, Weiser-Lock, Porter Cable, and Delta Machinery. Their product line includes drills, cordless handheld vacuums, hardware, grass cutters and much more (Black & Decker, 2008).

Black & Decker implemented a Six Sigma process improvement methodology in 1997 (Black & Decker, 2008). Their 8 step process included training to overcome difficulties within departments. Management laid our processes and key points of what to do and what not to do to achieve their quality goals. Communications were sent to other members within the company to notify those that would be affected by these changes. Black & Decker began to celebrate short-term successes to encourage more consistent wins and long-term success. These factors were all a part of the Black & Decker Six Sigma quality improvement process (Manage Smarter, 2008).

Black & Deckers target market niche includes do-it-yourself power tools as well as corporate solutions. Garden tools, home appliances, cleaning tools and other essentials for maintaining properties both residential and business related. To further extend their reach, they’ve produced a line of books to help the consumer research and accomplish whatever home repairs they are looking to complete. An estimated guess after reviewing the Black & Decker website is that their primary focus is on domestic and family consumers looking to initiate and complete projects on their own (Black & Decker, 2008).

Now that we’ve identified their focus, what points urge the customer to purchase the Black & Decker product over the competitor? First, they’ve made the product available at a wide variety of locations such as Target, Lowes, specialty catering stores, and the Black & Decker website. Employees of their corporation are a diverse group of individuals who use their differences to draw creativity and dynamic product breakthroughs (Black & Decker, 2008). Finally, Black and Decker executives have analyzed the external macro and micro global market that shapes their business operations. They looked at macroeconomics, demographics, technological, and competitive shifts to understand where the company was defensive rather than reactive and changed their approach to create productivity. This ingenuity allowed the company to turn their business around by respecting regulatory requirements and turning them into products that redefined cost and performance in every category (Godward & Deck, 2008).

Makita
Makita Corporation is a Japanese business headquartered in Anjo, Japan with about 8,000 employees worldwide. It was first incorporated in 1938 after its beginnings as a repair shop more than 20 years prior. In 1980, the company made its’ first overseas venture into Canada. A decade later, they expanded again; this time into China. Today, Makita is estimated to make about 1.38 million in profits each year. They sell 350 different kinds of products including vacuums, brush cutters, chain saws, blowers and generators (Funding Universe, n.d.).

The management structure of Makita Corporation is one of the most intricate and detailed of the three we are discussing today. The Board of Directors is at the top of the management chain with a Board of Auditors. The President is next in the chain of command and he oversea each of the 7-9 departments beneath. International and Domestic sales are separate departments. The production headquarters contains the engineering, control and maintenance department. Accounting, personnel and human resources are held in the Administration department. Quality Management is headquartered by another separate department where quality assurance and management can be tracked (Makita, 2006).

Aimed towards the do-it-yourself market, Makita power tools come in their signature turquoise color. From 1990 to 1992, Makita tools were the number one producer in the power tools production segment. Black & Decker reclaimed the market with their DeWalt brand. Their focus shifted in the mid-90’s towards streamlining ergonomics for living conditions. They had more than 150 patents worldwide and hundreds more were pending for appliances such as automatic curtain openers and items for dust, sound, and vibration control. They also revolutionized battery-powered tools that were rechargeable such as electric lawnmowers and cordless vacuums (Funding Universe, n.d.).

Makita’s current focus in the U.S. is aimed towards industrial power tools. Their products are specific to heavy-duty power tools and hardware like saws, grinders, floor polishers, and sanders. Unlike Black & Decker, they do not sell household appliances and cannot be found in multifunctional stores like Target. The sale of Makita products is limited to specialty stores that specifically sell tools and home improvement supplies. Their slogan “For the Professional” is the exclamation point to this claim of supplying products that meet the needs of those taking on heavy-duty tasks (Makita, 2008).

Bosch
Bosch is a German originated business that is frequently associated with its automotive equipment and production. The company produces ABS, brakes, fuel and diesel injector systems as well as separate business departments that produce power tools, security systems, and household appliances. The company employs about 223,000 employees (Global Sources, 2008) and supports healthy revenue which continues to grow from 36.3 million in 2003 to 46.3 million in 2007. Bosch conducts 65% of its business in Europe, 18% in America, and 17% in the Asia-Pacific region. With over 290 production facilities, its reach stretches over 50 countries through subsidiaries (Bosch, 2008).

The Bosch history is prided on technological advances made by pioneers employed by their company. In 1932, Bosch produced the first electric rotary hammer. 1946 saw the first jig saw when a Bosch employee installed a blade on his wife’s sewing machine. The company continues to make these leaps and bounds within their power tool division. In 2006, Bosch introduced the smallest and most powerful compact tools. The research and development for all tools created by Bosch is centered around low vibration, minimum noise levels, precision, dust extraction/entrapment, and simple easy to change accessories. Their patented Airsweep design focuses on keeping the workplace as clean as possible with installed canisters, hoods, and dust ports for collection and easy clean up. (Bosch Tools, 2008).

Another focus for the German power tool producer is the study of ergonomic principles and their hand-help power tools. There are three main focal points to this study: grip, noise, and location of controls. The gripping surface is designed to be comfortable and to distribute the weight in the hand as easily as possible. Cooling fans and air discharge outlets minimize sound waves and keep the pitch of the tool down to a more tolerant level. Finally, Bosch creates tools so be used by right and left hand users. The knobs and controls are easily operable and within reach for any user (Bosch Tools, 2008). This added research shows that the Bosch Corporation is thinking outside the box when trying to reach their customers. They are listening to what the market is saying and responding by answering the need and being mindful of the client.

The business slogan “invented for life” demonstrates the companys’ dedication to innovative products and improvements for a professional and comfortable lifestyle. Automotive Technology seems to be the companys’ largest focus and moneymaker. While in the U.S. there are several hundred Bosch Service Centers, a heavy distribution of Bosch parts for maintenance and improvement. As far as distribution for power tools is concerned, Bosch operates under similar guidelines as Makita. Because they are internationally owned, the products are distributed through select specialty stores such as Lowes and Home Depot. Heavy duty tools designed for serious repairs (Bosch, 2008).

References:

Black & Decker. (2008) Welcome. Retrieved July 28, 2008, from http://www.bdk.com/

Bosch. (2008) Bosch in figures. Retrieved July 29, 2008, from http://www.bosch.com/content/language2/html/2226.htm

Bosch Tools. (2008) Bosch Innovations. Retrieved July 28, 2008, from http://www.boschtools.com/AboutBoschTools/BoschInnovations/Pages/default.aspx

CNN Money. (2006) Fortune 500 Annual Rankings. Retrieved July 28, 2008, from http://money.cnn.com/magazines/fortune/fortune500/snapshots/1343.html

Credit Risk Monitor. (2008) The Black and Decker Corporation. Retrieved July 28, 2008, from http://www.crmz.com/Report/ReportPreview.asp?BusinessId=2083

Funding Universe. (n.d.) Makita Corporation. Retrieved July 29, 2008, from http://www.fundinguniverse.com/company-histories/Makita-Corporation-Company-History.html

Global Sources. (2008) Bosch. Retrieved July 29, 2008, from http://www.globalsources.com/PEC/PROFILES/BOSCH.HTM

Godward, T. and Deck, M. (2008) Operational Strategy: Bold Moves, Breakout Performance. Retrieved July 30, 2008, from http://www.prtm.com/strategiccategory.aspx?id=77&langtype=1033

Makita. (2006) Management Structure. Retrieved July 29, 2008, from http://www.makita.co.jp/global/company/organization.html

Manage Smarter. (2008) Training. Retrieved July 29, 2008, from http://www.managesmarter.com/msg/content_display/training/e3id7384c515bcc8fbc19e4e88badd00932

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