Black and Decker Corporation V Pre 1980

Black and Decker Corporation V Pre 1980

The Black and Decker Corporation ÐŽV Pre 1980

CompanyÐŽ¦s Background

In 1910, Duncan Black and Alonzo Decker invested $1,200 to start a company, which makes specialised machinery. Their product line included a milk bottle cap machine, a vest pocket-adding machine, a postage stamp splitting and coiling machine, machinery for the U.S. Mint, a candy-dipping machine and a cotton picker.

The Black and Decker hexagon was designed and became the company logo in 1912.

Two years later that is in 1914, Black & Decker filed its first application with the U.S. Patent Office for a drill with a pistol grip and trigger switch. This innovative tool design introduced portability to stationary tools. The new design would form the foundation for today's power tools industry.

In 1916, the company introduced its first power tool ÐŽV a portable half-inch electric drill that was eventually placed on display in the Smithsonian Institute. The company built its first plant in Towson, Maryland near Baltimore in 1917. A year later, in order to pursue international markets, an ad was placed in American Exporter announcing new locations for B&DÐŽ¦s representatives in England, Canada, Russia, Australia and Japan.

In 1921, full-page ads in the Saturday Evening Post signalled the beginning of B&D's mass media advertising campaigns. Over the next forty years, Duncan Black and Alonzo Decker undertook a number of actions that established the company as the dominant name in power tools and accessories.

In 1922, the first Black & Decker foreign subsidiary was formed in Canada and assembly operations, sales, service and warehouse facilities outside the U.S. were built for the first time. The electric screwdriver was added to a growing list of products during this year also.

By 1924, B&D built a two-story administration building, housing executive and sales offices in Towson. Now re-modelled, this building still serves as Black & Decker's world headquarters.

In 1925, Black & Decker, Ltd. was organised in London, England, as a wholly owned sales, service and warehouse subsidiary serving the United Kingdom. The company launched new marketing innovations featuring clinics which taught distributors how to use and demonstrate power tools.

In 1929, although Wall Street collapsed, B&D continued to expand by establishing a subsidiary in Sydney, Australia and adding 96,000 square feet to their Towson plant. The portable electric sander was added to the product line. The Company also acquired its first aeroplane, a six-passenger Travel Air Monoplane which was outfitted as a flying showroom for power tools used in reconditioning aircraft engines.

By 1930, B&D took its first step into the consumer housewares market with the Cinderella washing machine.

In 1933, new and varied products were added including a portable circular saw, adjustable-clutch electric screwdriver, an electric fender straightener for automotive repair and an electric heat gun.

During 1936, B&DÐŽ¦s shares began trading on the New York Stock Exchange.

In 1941, the company began to manufacture fuses, gun shells and other ordinances for the military and the following year, plastic was used for the first time in drill housings.

B&D introduced the Home Utility line in 1946 and offered popularly priced drills and accessories for the do-it-yourself market.

During 1950, the one-millionth 1/4" Home Utility drill came off the assembly line, a milestone in the Company's manufacturing history.

In 1951, S. Duncan Black, president of the company since 1910 died and Alonzo G. Decker became president.

During 1956, the company continued to expand internationally building plants in South Africa and in Victoria, Australia. Alonzo G. Decker died at the age of 72 and Robert D. Black, S. Duncan Black's brother, was named president and chairman of the board.

In 1961, B&D introduced the world's first cordless electric drill, an innovation powered by self-contained nickel-cadmium cells.

During 1968, NASA commissioned B&D to develop a unique power head for the Apollo Lunar Surface Drill to remove core samples from the moon.

With the introduction of the Dustbuster in 1978, a hand-held, cordless vacuum cleaner, a new concept in household appliance technology revolutionised the appliance industry.

In 1980, B&D introduced electronic power tools for consumers, including a drill press with built-in microcomputer and digital display panel.

The Black and Decker Corporation ÐŽV 1980 to 1989

Analysis of the Period 1980 to 1989

This first part of the case study concentrates on the period from 1980 till 1989 during which period, B&D experienced a change in strategic approach and a number of events which took place were determining factors in shaping B&DÐŽ¦s future.

Black & DeckerÐŽ¦s Corporate Strategic Approach prior 1980

Up till 1980 B&D had not engaged in any diversification process. As seen in the introduction, B&D has been a successful organisation, since inception in 1910, by maintaining a corporate growth strategy tied exclusively to product-line extensions and international expansion. This meant, increasing the companyÐŽ¦s line-up of power tools and accessories and increasing its penetration into more and more foreign markets.

In the 1980ÐŽ¦s, this approach had to change as B&D started experiencing difficulties to their adopted strategy resulting from growing maturity of its core power toolsÐŽ¦ business and from ever increasing market competition. The latter is illustrated in Exhibit [1] where an analysis of the U.S. market over the twelve years, 1979 to 1991, shows that B&DÐŽ¦s market shares went down by 4.8% and 24.2% for consumer and professional tools sectors respectively. B&D had also lost market leadership in the professional tools sector even though, they still held market leadership in the total tools market (which market share has also decreased by 13.5% over the same period).