How did the competitive environment confronting Black & Decker change during the sass and sass? What changes did Black & Decker make in its strategy and structure to compete more effectively in this new environment? 3 By the sass, what strategy was Black & Decker pursuing In the global market place? How would you characterize its structure? Did the structure fit the strategy and environment? Why do you think it took nearly two decades for Black & Decker to effect a change In strategy and structure? 4 [Source of questions: Hill (2009) International Business: Competing in the Global Marketplace, 7th Eden.
W: McGraw-Hill, 535- 36. ] Guidelines Your assignment should not exceed 4,000 words and should be typed or produced on a PC. 2 3 Your answer should be in essay form. Use complete sentences. You can provide any statistics, tables or graphs in an appendix for reference. Your answer should clearly show your understanding of the topics. We will look for clear and logical Ideas. The completed assignment should be received by your tutor by the due date. 5 8 890 International Management Strategy -?erratic and Organization Change at Black BE Decker By the mid-sass, however, this structure was staging to become untenable.
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New competitors had emerged in the power tool business, including Busch, Making, and Panasonic. As a result, Black & Decker’s monopoly position had eroded. Throughout the sass, the company pursued a strategy of rationalization. Factories were closed and the company consolidated production in fewer, more efficient production facilities. This process was particularly evident in Europe, where different national operating companies had traditionally had their own production facilities. As the company noted in its 1985 annual report, “Globalization remains a key strategic objective.
In 1985, sound progress was made in designing and marketing products for a worldwide market, rather than Just regional ones. Focused design centers will ensure a greater number of global products for the future .. Global purchasing programs have been established, and cost benefits are being realized. ” During this period, while the company maintained a number of design centers, it cut the number of basic R centers from eight to Just row. The autonomy of individual factories also started to decrease.
The factories that remained after the round of closures had to impute with each other for the right to produce a product for the world market. Major decisions about where to produce products to serve world markets Were now being made by managers at ;the corporate headquarters. Even so, national subsidiaries still maintained a fair degree of autonomy. For example, if a national subsidiary developed a new product, it was still likely that it would get the mandate to produce that product for the world market.
Also, if a national subsidiary performed well, Known primarily for its power tools, Black & Decker is one of the world’s older multinational corporations. The company was founded in Baltimore, Maryland, in 1910, and by the end of the sass had become a small multinational company with operations in Canada and Britain. Today the company has row well-known brands, Black & Decker consumer power tools and its Dealt brand of professional power tools. It sells its products in over 100 nations, and has revenues in excess of $5 billion, more than half of which are generated outside of the United States.
The company grew rapidly during the sass and sass due to its strong brand name and near monopoly share of the consumer and professional power tools markets. This monopoly was based on Black & Decker’s pioneering development offhandedly power tools. It was during this period that Black & Decker expanded rapidly in international them the tight to develop, manufacture, and market the company’s power tools. As a result, by the early sass, the company had 23 wholly owned subsidiaries in foreign nations and row Joint ventures.
During its period of rapid international expansion, Blade & Decker operated with a decentralized organization. In its 1979 annual report, the company described how “In order to be effective in the marketplace, Black & Decker follows a decentralized organizational approach. All business functions (marketing, engineering, manufacturing, etc. ) are kept as close as possible to the market to be served. ” In effect, each wholly owned subsidiary was granted considerable autonomy to run its own business. 39 corporate management was likely to leave it alone.
By the sass, however, it was clear that this change had not gone far enough. The rise of powerful retailers such as Home Depot and Low’s in the United States had further pressured prices in the power tools market, Blacker & Decker responded by looking for ways to gamer additional manufacturing efficiencies. During this period, Black & Decker shut down several more factories in its long-established subsidiaries and started to shift production to new facilities that it opened in Mexico and China As this process proceeded, any remaining autonomy the managers of local factories enjoyed was Virtually eliminated.