Case study B&D

Decent Essays
Case: HBS Case 595-057

Q1. Why is Makita outselling B&D 8 to 1 in an account that gives them equal shelf space? (Opening paragraph)
Ans. Perception of Quality - Makita have positioned themselves as a premium product in the profession power tool segment. B&D, as a result of its market leadership with 50% market share in consumer market segment, is considered an inferior brand to Makita as tradesman believe that the brand is more geared towards amateur than professional. The consumer and professional market segment are differentiated by skillset of the users of the tool - consumer segment is considered an amature segment requiring low performance tools whereas professional segment requires highest performance tools.
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The current market size is $420. Of that 10% will be off limit. That leaves out $380. The target is 20% of the $420 i.e. $80M. So B&D would have to generate almost $45 million in additional sales from the (380 - 35) = $345 market size.
Given the continued execution of Makita it would be very hard. Tradesman swears by the quality of Makita product. Despite being available in all sales channels, the product continues to be sold in the professional segment as high quality product. That speaks about the strength of Makita brand. So generating that sale would be very very difficult if not impossible.
B&D has few opportunities that it would need to execute on meet or get near to its goal - Improve BD brand value, increase prices of its product to expand market share, work with retailers to promote its product.
Q5. If you think Galli should pursue a "build share" strategy, what actions do you recommend? Does the DeWalt idea have any merit? How about the sub-branding option?
Here are the recommendations
A. Ship the product in a color different from charcoal grey/black due to the reasons mentioned above.
B. Remove B&D brand. This brand has been marginalized in the tradesman category to some extent. Of the two available options of sub brands and a different brand, I lean towards a sub brand under B&D. A sub brand that is built around performance and is priced at premium. A sub brand would enable the company to use the brand equity (reliable, established) of B&D
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