Case Study Description of Black & Decker Corp.: Household Products Group, Brand Transition
This rewritten version differs from Black & Decker Corp.: Household Products Group (A1) in two ways: 1) It has an explicit decision focus. Homa must decide on a program to transfer the Black & Decker name to GE small appliances; and 2) The detailed information concerning advertising, promotion programs, purchase allowances, volume rebates, dating discounts, cooperative advertising, and consumer rebates has been condensed.
Authors :: John A. Quelch, Minette E. Drumwright, Cynthia A. Bates
Swot Analysis of "Black & Decker Corp.: Household Products Group, Brand Transition" written by John A. Quelch, Minette E. Drumwright, Cynthia A. Bates includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Decker Black facing as an external strategic factors. Some of the topics covered in Black & Decker Corp.: Household Products Group, Brand Transition case study are - Strategic Management Strategies, Mergers & acquisitions, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Black & Decker Corp.: Household Products Group, Brand Transition casestudy better are - – supply chains are disrupted by pandemic , wage bills are increasing, increasing household debt because of falling income levels, increasing energy prices, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Black & Decker Corp.: Household Products Group, Brand Transition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Black & Decker Corp.: Household Products Group, Brand Transition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Decker Black, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Decker Black operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Black & Decker Corp.: Household Products Group, Brand Transition can be done for the following purposes –
1. Strategic planning using facts provided in Black & Decker Corp.: Household Products Group, Brand Transition case study
2. Improving business portfolio management of Decker Black
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Decker Black
Strengths Black & Decker Corp.: Household Products Group, Brand Transition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Decker Black in Black & Decker Corp.: Household Products Group, Brand Transition Harvard Business Review case study are -
Organizational Resilience of Decker Black
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Decker Black does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Decker Black digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Decker Black has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Decker Black are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Decker Black has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Black & Decker Corp.: Household Products Group, Brand Transition HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Decker Black in the sector have low bargaining power. Black & Decker Corp.: Household Products Group, Brand Transition has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Decker Black to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Decker Black has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Black & Decker Corp.: Household Products Group, Brand Transition - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Black & Decker Corp.: Household Products Group, Brand Transition Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Sales & Marketing field
– Decker Black is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Decker Black in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Decker Black has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Decker Black has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Black & Decker Corp.: Household Products Group, Brand Transition Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– Black & Decker Corp.: Household Products Group, Brand Transition firm has clearly differentiated products in the market place. This has enabled Decker Black to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Decker Black to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Decker Black is present in almost all the verticals within the industry. This has provided firm in Black & Decker Corp.: Household Products Group, Brand Transition case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Black & Decker Corp.: Household Products Group, Brand Transition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Black & Decker Corp.: Household Products Group, Brand Transition are -
Workers concerns about automation
– As automation is fast increasing in the segment, Decker Black needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Decker Black is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Black & Decker Corp.: Household Products Group, Brand Transition can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Black & Decker Corp.: Household Products Group, Brand Transition has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Decker Black 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Black & Decker Corp.: Household Products Group, Brand Transition HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Decker Black has relatively successful track record of launching new products.
Need for greater diversity
– Decker Black has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Black & Decker Corp.: Household Products Group, Brand Transition, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Decker Black has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Black & Decker Corp.: Household Products Group, Brand Transition that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Black & Decker Corp.: Household Products Group, Brand Transition can leverage the sales team experience to cultivate customer relationships as Decker Black is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Decker Black, firm in the HBR case study Black & Decker Corp.: Household Products Group, Brand Transition needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Decker Black is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Decker Black needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Decker Black to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Decker Black products
– To increase the profitability and margins on the products, Decker Black needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Black & Decker Corp.: Household Products Group, Brand Transition | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Black & Decker Corp.: Household Products Group, Brand Transition are -
Using analytics as competitive advantage
– Decker Black has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Black & Decker Corp.: Household Products Group, Brand Transition - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Decker Black to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Decker Black to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Decker Black can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Decker Black can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Black & Decker Corp.: Household Products Group, Brand Transition suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Decker Black to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Decker Black to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Decker Black can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Decker Black can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Decker Black can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Black & Decker Corp.: Household Products Group, Brand Transition, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Decker Black in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Decker Black can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Decker Black is facing challenges because of the dominance of functional experts in the organization. Black & Decker Corp.: Household Products Group, Brand Transition case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Decker Black can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Decker Black can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Decker Black can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Black & Decker Corp.: Household Products Group, Brand Transition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Black & Decker Corp.: Household Products Group, Brand Transition are -
Increasing wage structure of Decker Black
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Decker Black.
Stagnating economy with rate increase
– Decker Black can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Black & Decker Corp.: Household Products Group, Brand Transition, Decker Black may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Decker Black needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Decker Black is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Decker Black high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Decker Black can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Black & Decker Corp.: Household Products Group, Brand Transition .
Environmental challenges
– Decker Black needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Decker Black can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Decker Black can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Decker Black needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology acceleration in Forth Industrial Revolution
– Decker Black has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Decker Black needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Decker Black business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Black & Decker Corp.: Household Products Group, Brand Transition Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Black & Decker Corp.: Household Products Group, Brand Transition needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Black & Decker Corp.: Household Products Group, Brand Transition is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Black & Decker Corp.: Household Products Group, Brand Transition is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Black & Decker Corp.: Household Products Group, Brand Transition is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Decker Black needs to make to build a sustainable competitive advantage.