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    SWOT analysis on both Smith & White and Makatume

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    The research you conducted in Phase 2 of the fiercely competitive U.S. PEPT industry has revealed two major participants, Smith & White Corporation (S&W), a very large and aggressive domestic manufacturer, and Makatume, a Japanese powerhouse.

    Smith & White markets a full line of moderate quality professional and consumer tools. It also markets such products as lawn and garden, hobby tools, and kitchen appliances, all under the same brand name as its power tools. It is a multi-national conglomerate that has dominant shares in all the markets in which it operates. Its strength lies in a unified strategy across all its product lines, power tool and non-power tool, of building and maintaining brand equity through massive amounts of national media advertising. The leverage gained through strong brand equity compels retailers, particularly the Big Boxes, to stock many of the S&W's products because of high end-user demand.

    This demand-pull marketing strategy also has the synergistic effects of obtaining relatively higher prices, advanced placement, co-op advertising, high profile self space, and cross promotion.

    S&W does have some significant weaknesses. These include high costs due to old manufacturing plants located in high labor cost urban areas, market confusion between its professional and consumer tools, and negative feelings on the part of its distributors stemming from a perceived abuse of their dominant market position. It also doesn't have much of a presence in the fast growing cordless segment.

    In addition, a major hidden weakness is S&W's huge size, which makes it unwieldy in reacting to market phenomena during periods of rapid change.

    Makatume markets only professional tools, which are highly regarded by tradesmen for their quality, robustness, and durability. It controls over 50% of the Japanese market and has leveraged that position to become the second biggest player in the U.S. market. For the past several years their sales in the U.S. have been aided by favorable exchange rates, although many economists now forecast a reversal of this advantage over the next two years. Makatume has an extremely strong cost position due to its relatively new manufacturing plants in Japan.

    Makatume's greatest product strength is in the fast growing cordless segment. It controls a dominant 70% market share of the professional cordless market. Makatume's early entry into this segment, is both a blessing and a curse. By entering the market early, Makatume has been able to obtain its dominant market share, but it is now locked in to lower voltages due to wide acceptance of its interchangeable battery system. As the technology of battery efficiency progresses, Makatume is faced with a dilemma: Does it introduce its own higher voltages, thus legitimizing that market for others to enter, or does it wait until it has to respond to being outflanked by its competitors if and when they introduce their higher voltages?

    The rest of the market is made up of several domestic and foreign niche competitors, none of which has greater than a 5% share of the total market. A phenomenon to watch, however, is the growing strength of Far East imports from China, which are beginning to make their impact on consumer tools because of their low price and good value. The yuan is the relevant currency affecting Chinese imports.

    We can often better see ourselves when reflected through the perspectives of others. In this exercise you are to take the vantage point of the industry leaders, S&W and Makatume. This has the advantage of helping to anticipate competitive positioning that may effect the successful execution of Able's strategy. Based on the narrative above, please answer the following questions from the perspective of being their Director of Strategic Planning and Analysis. (For real world situations always keep in mind that the status and plans of competitors can almost never be known except through an analysis of their actions, and even then almost never with certainty. Dealing with imperfect information is one of the essential aspects of the economic problem.)

    * Perform a SWOT analysis on both Smith & White and Makatume. How would you, as a CEO minimize each company's weaknesses and threats?
    * How would you maximize each organization's strengths and opportunities?
    * If you were Makatume, what would you do about higher voltage batteries?

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    Solution Preview

    The response addresses the queries posted in 1080 words with references.

    //Before writing about the SWOT Analysis of Smith & White and Makatume, we have to understand the main objective of the research. Firstly, we will discuss about the SWOT analysis of Smith & White Corporation. With the assistance of SWOT Analysis of the Company, we will be able to understand the market position and the strategies of the Company.//


    This research depicts an illustrative knowledge regarding the SWOT analysis of Smith & White and Makatume. In addition to the SWOT analysis, this research discusses the various ways through which both of these companies can minimize their threats and weaknesses and can maximize their strengths and opportunities. In the end, this research exhibits the solutions to deal with the problems of high voltage batteries of Makatume. The most significant objective of this research is to think upon the strategies of Able Corporation's competitors, so that it can anticipate its next move and strategy.

    Smith & White Corporation

    Smith & White Corporation (S&W) is a very large and hostile domestic manufacturer of the power tools. With the help of company's SWOT analysis, we can access its position in the market:


    Smith & White is a large and aggressive domestic manufacturer as well as a multi-national corporation that influences all of the markets it is present.

    It serves full line of average quality specialized and consumer apparatus.

    Smith & White has a firm synergy with all of its product lines, power tool and non-power tool, by constructing and exerting brand equity through mass media advertising.

    Due to its brand name and large sales, Big Box stores its products (Graves, 2007).


    High costs due to the old manufacturing plants.

    The massive size of the organization leads to many complexities.


    With the help of its demand pull strategy, the company can achieve various benefits.

    Integrated strategy of company provides it an opportunity to position its product at higher prices. ...

    Solution Summary

    The response addresses the queries posted in 1080 words with references.