Stanley Black & Decker Executive Summary

An oligopolistic market is one that has several dominant firms with the power to influence the market they are in; an example of this could be the supermarket industry which is dominated by several firms such as Tesco, Sainsbury’s, and Waitrose etc... Furthermore an oligopolistic market can be defined in terms of its structure and its conduct, which involve various different aspects of economics.

Monopolies and oligopolies often use anti-competitive practices, which can have a negative impact on the economy. This is why company mergers are often examined closely by government regulators to avoid reducing competition in an industry.

Two monopolies a majority of americans and the world know of, is Microsoft and AT&T. They are leaders in today's technological age. Both companies came from simply thoughts that innovators put to the test and made happen. Through hard work and dedication, these companies help people across the globe, whether it be a phone call to 911 or using work to write a paper that depends on one graduating from high school or any education. One of these companies was broken up into smaller little companies, which would grow to be very important, and one, even to this day, is still intact and still a leader in computer software.

Oligopolies have been around ever since there is trade. However, it has only recently gained grounds in this age of globalisation. Never before has oligopolistic competition been so fiercely contested across so many industries.

In the 1990’s Black and Decker had a great position in the market for their products to appeal to the Professional Industrial segment and the Consumer segment but when it came to the Professional Tradesmen segment they were lacking. Their 9% market share vs. Makita’s 50% market share in the tradesmen segment was incomparable. Makita clearly had a better product in the eyes of the Professional Tradesmen. In the Professional Segment most of the people who buy the products are people who need these tools to make a living such as carpenters, electricians, plumbers, roofers, and general remodelers. Black and

The Aerospace and Defense (A&D) is a highly concentrated industry (Global Edge, n. d.). The market is largely dominated by a small number of large companies in the industry, which is a characteristic of an oligopolistic competition. The major players in the industry include Boeing, Lockheed Martin, General Dynamics, Northrop Grumman, and Raytheon, (Choi, 2016). In oligopolistic market, companies make decisions based on their own actions as well as of others’ in mind (Johnson, 2014; Boundless, 2017). According Pettinger (2016), the key characteristics of oligopoly are

It is very interesting that the company controls the market price. Men’s Wearhouse are classified as price takers to meet consumers’ need and wants. According to Shmanske (2006), “Most textbook treatments suggest that the market structures worthy of consideration include price-taking competition and uniform-price monopoly; monopolistic competition and classic oligopoly receive less attention” (p. 338). In addition, they produce homogenous products that closely resemble competitors’ products with very few differences. The market that the Men’s Wearhouse competes in allow free enter and exit. This allows smaller companies to enter the market to enter the market without restrictions. In conclusion, the Men’s Wearhouse meets the characteristics

Nintendo appears to have implemented a market-penetration pricing strategy. The Wii at a cost of $250 is 50% less than the 20-gigabyte PS3 (smaller hard drive machine). At this lower price, it is easier for the product to penetrate the market due to affordability in most segments. This aligns with the assumed company’s aim of maximising market share in the current and new segments. To achieve this, Nintendo ensured that the Wii was less costly to manufacture. Moreover, a higher sales volume may lead to lower unit costs and higher long run profits. Conversely, Sony is believed to have a market-skimming pricing strategy. The company invested $2 billion in technology, so this strategy aims at recovering the maximum amount of revenue to cover the high costs incurred in the early stages of the product life cycle. Additionally, Sony has a strong brand due to the success of their previous machines (PS2 and playstation) and the high price assists in communicating the image of a superior product with quality.

* Product Differentiation: It is evident from the case that B&D products in the professional segment were of good quality with 10 out of the 14 products in leadership category (Figure E). Therefore, the problem faced by B&D products in this segment is more of differentiation than of product quality. The consumer level products in black in color are not substantially differentiated from professional level products which were charcoal grey in color (Figure D). This lack of differentiation has adverse influence on the buying decision made by professional tradesmen as they take pride in their work which is more rigorous than “do it yourself” low quality consumer segment. Therefore, the professional tradesmen segment has disassociated itself with Black and Decker brand name despite good quality professional tools manufactured by B&D.

The Black & Decker Corporation has three major segments which are Professional-Industrial tools, Professional-Tradesmen tools and Consumer tools. It is making good profit in Professional-Industrial and Consumer segments but has only 9% share in Professional-Tradesmen, compared to 50% share of Makita (Table A).

Robertson Tool Company is one of the largest domestic manufacturers of cutting and edge hand tools with wide distribution

Competitive pricing: because HN has a large share of the market they are “price leaders” and other businesses follow them

It is a global leading company in the design, manufacturing and also sale of home upgrading products, with sales in the year 2002 of US$1.2 B. Its major areas of business are power tools, solar powered lighting, electronic measuring tools and floor care appliances. The company manufactures and trade electrical and electronic appliance. This company has attained an average income growth of 33% yearly over the past 5 years. The company operate in two segments floor care and appliances and also power equipment.

During the early 1980's; sales started to decline and it posted a restructuring cost; therefore in the period of 4 years the company lost money. Black & Decker went through a very hard time.

“An observation made of oligopolistic business behaviour in which one company, usually the dominant competitor among