SKIL CASE DISCUSSION ON VIDEO (SOME POINTS THAT CAME UP)

1
SKIL CASE DISCUSSION ON VIDEO(SOME POINTS THAT
CAME UP)

• Too many models cannot achieve economies of
  scale
• Traditionally engineering oriented,
  product-driven innovator, not cost-oriented or
  market-oriented
• Traditional approach is PUSH (and not PULL
  required by mass merchandisers) Not much
  emphasis on the brand name, advertising, etc.
• Critical choice Mass Outlets vs. Traditional

2
WHAT COULD BE DONE?

• Trim product line, differentiate from Black
  Decker. Build on image of SKIL through
  advertising, professional image, target at the
  upscale sophisticated consumer
• Avoid channel conflict. Focus on a narrower range
  of channels may result in the loss of some
  business but likely to do better in the
  remaining
• Hardware stores have higher costs, more dependent
  on margins, weakness of BD. Take advantage of
  that.
• BD is committed to a wide line, more so than
  SKIL due to their PULL strategy. They have to
  take advantage of market economies. Why not take
  advantage of SKILs smallness and focus on some
  specific channels
• But should SKIL trim so sharply as to limit
  itself to circular saws? Trade-off
• General need to redesign standardize decrease
  number of products product families

3
SKILS NEW STRATEGY

• Decreased number of distribution channels
• -- streamlined sales force and production
• -- enlisted support of hardware stores, home
  centers, etc.
• Moved from stuck in the middle to FOCUS COST
• -- reduced product line
• -- redesigned/product families STANDARDIZATION
• -- decreased number of parts on each machine
• -- global models
• Decreased no. of plants increased volume per
  plant More vol. Per model, more automation,
  vertical integration
• Made automation flexible, more models/production
  line
• Just-in-Time philosophy reduced inventories

4
INTERVIEW WITH PRESIDENT OF SKIL BILL DAVIS

• Patience is important, you need time
• If you change strategy too frequently, you will
  not get there
• Be ready for culture shock
• Strategic health vs. Financial Health
• Keep track of customer needs, what channels are
  doing, etc. May need to change distribution
  positioning over time
• Be ready for the responses of competitors
• Know what you are and be the best in that

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SKIL CORPORATION LESSONS

• Dont imitate Choose new positioning
• Focus on target
• Make tough choices Dare to trade-off

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SKIL CORPORATION CONCLUSONS

• Create a formal process
• Use a multifunctional team
• Communicate strategy inside and outside your
  organization
• Be consistent over time
• Use proper measurement
• Test strategy continually no company actually
  masters strategy