Black & Decker

Black & Decker was recognized as the power tools international industry leader during the early1980’s. However, due to the maturity of its power tools business and competition from companies joining the global market, B&D shifted from a single business firm to a diversified company. Early success with acquisitions such as GE propelled the company to acquire Emhart, a highly diversified manufacturer of industrial products. The acquisition of Emhart is well documented and provides a roadmap for the internal and external challenges and opportunities companies face when attempting to gain market share, increase profits, and expand globally through diversification. Thus, the integration and globalization strategy B&D used after buying Emhart will be examined.

Globalization Strategy

1. What do you think of Grunewald’s plan for creating a “global lock business”?

Grunewald’s plan to gain market share by acquiring a company that will continue Black & Decker’s diversification strategy and provide inroads to other international markets had merit. It was, in fact, what he was hired to do- expand the business globally (Cummings & Worley, 2009). According to B&D CEO, Nolan Archibald, Emhart’s distribution channels and products such as Kwikset door locks, Price Pfister faucets, and Bostik adhesives, aligned with B&D’s product lines, in other words, it was a good fit (Deutsch, 1989). Moreover, both companies have international experience. B&D targets homeowners while Emhart’s target market is industrial (Deutsch, 1989). Also, the merger will increase B&D’s margin significantly. For example, Archibald estimates increased revenues of $50 million by moving products through integrated distribution channels (Deutsch, 1989). Finally,...

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...its global strategy and be competitive with existing international companies (Yips, 1996).

Conclusion

The ability to compete globally is a problem all companies face. It requires a departure from traditional methods of operation and an awareness of external and internal forces that can undermine a company’s success. Thus, a clear strategic plan engineered by experienced and committed managers is necessary. B&D assumed that its past success with diversification and acquisitions inoculated them from making a mis-step. This bravado, if you will, caused B&D to ignore the warning signs when acquiring Emhart; a venture that took approximately ten years to recover from. Consequently, B&D returned to its core strategy of product innovation, quality, and concentration on profitable company acquisitions in order to remain competitive in the global market.