6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
The sale of Milwaukee Electric Tool to Hong Kong-based Techtronic Industries Co. Ltd. (TTI) sets up interesting and important questions that reach beyond power tool markets. In similar ways there has been significant consolidation and repositioning in hand tool and other product sectors.
A big question surrounding the Milwaukee Electric Tool acquisition is how will TTI leverage the strong brand and expertise that Milwaukee has built out consistently? You have a strong premium brand that now slots into a global portfolio of the #3 player, behind Black & Decker (with Dewalt and now Porter-Cable and Delta lines that came in this summer's acquisition), and Bosch.
Most observers agree the consolidation in power tools is not over, and in fact we'll see some other deals in the not too distant future as the top three fight for smart add-ons and additional market share in an increasingly competitive global market.
The marketing plays in hand tools are shifting rapidly as well. Look at what Danaher has done with the Craftsman program and the other top players have done to build stronger market position. Throw in Snap-On's repeated efforts to build into traditional distribution channels. And for good measure consider the growing use of private label brand strategies. The lesson to date: the margin for error is smaller as markets tighten, but there is still room for innovative product programs marketed well through distribution channels. And we'll see more "non-traditional" alliances.
So how do these shifts change the value for the customer? While some of this can muddy waters and threaten margins, there are more options now than ever before to tailor a clear and strong value package for customers.