Stanley Black and Decker SWOT and PESTLE Analysis

Strength

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Weakness

1. Reliance on the US: Despite its interest in growing sales from emerging markets, Stanley Black & Decker Inc continues to be heavily reliant on North America, specifically the US, as a major market. Stanley Black & Decker Inc is hugely reliant on the US market, which accounts for more than 50% of the company’s revenue.

2. Targeting Millennial: The Company faces difficulty in appealing to millennial (who tend to exhibit low power tool and gardening equipment usage) in developed markets due to housing affordability issues. A key focus will be mid-price point brand propositions to attract consumers, as well as localisation strategies. However, the prevalence of “do-it-for-me” behaviour within these markets presents a potential obstacle as the company has typically performed well in DIY (Do-it-Yourself) markets.

3. Apartment living restricts lawn mower sales in emerging markets: There is limited scope for expansion in densely-populated emerging markets such as China, India or Indonesia, seeing as consumers are more likely to live in apartments where they don’t have access to gardens.

Opportunity

1. Emerging Markets:Emerging markets, particularly Asia Pacific, represent opportunities for expansion due to rising incomes. Tools & Storage demonstrated solid growth in the second quarter of 2017 in the emerging markets, with net sales surging by 17%. Investments in e-commerce, as well as mid-price-point launches in emerging markets represented major growth drivers for Stanley Black & Decker Inc. within the Tools & Storage segment in FY2016. Japan and Malaysia dominated Asia Pacific sales, accounting for more than 70% of the total sales.

2. CraftsMan Acquisition: Stanley Black & Decker Inc’s acquisition of the Craftsman brand from Sears Holdings is likely to boost the company’s ranking in the US in 2017 and future years. One of the key strategic objectives in the short term is likely to be to bring Craftsman production back to US shores, in order to align with its “make where we sell” strategy. There are both positive and negative implications of such a strategy. While the re-Americanising of the Craftsman brand is likely to resonate positively with consumers in terms of product quality, US manufacturing is also likely to drive up production costs.

3. Moving to Digitization: Stanley Black & Decker Inc has responded to growing digitalisation by forming a Digital Accelerator team and one of the first outputs of this team has been the DIYZ app, offering DIY video tutorials for consumers. The company has also previously launched smart products with its Black+Decker SMARTECH batteries range, designed to be used with its mobile app. Stanley Black & Decker Inc responded to growing digitalisation by forming a Digital Accelerator team in Atlanta (USA) in 2015, which will have expertise in advanced analytics, the Internet of Things, social media, mobile applications, search engine optimisation, cloud and digital products.

Threat

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Political

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Economic

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Social

1. Limited Scope of Expansion in Asia: Going forward, Stanley Black & Decker Inc’s acquisition of the Craftsman brand will expand the company’s range of lawn mowers, including walk power lawn mowers and riding lawn mowers in Asia. But, there is limited scope for expansion in densely-populated emerging markets such as China, India or Indonesia, seeing as consumers are more likely to live in apartments and apartments in these countries don’t have access to the garden.

2. Purchasing Power of youth is low: In USA and European countries, youth unemployment is relatively high when compared to the other demographics and households in Western Europe have not seen meaningful real gains in purchasing power since 2008 due to the global financial crisis.

Technological

1. Digitalisation disrupts home and garden globally home: Global home improvement online sales reached USD8.4 billion in 2016, accounting for 3% of total sales. Growing internet retailing penetration represents just one aspect of how digitalisation is disrupting the home improvement and gardening industry globally. Stanley Black & Decker Inc responded to growing digitalisation by forming a Digital Accelerator team in Atlanta (USA) in 2015, which will have expertise in advanced analytics, the Internet of Things, social media, mobile applications, search engine optimisation, cloud and digital products.

2. Launch of DIYZ.com and DIYZ mobile app: The DIYZ smartphone app helps DIY consumers to carry out home improvement projects and represents an example of the work carried out by the new Digital Accelerator team. The app offers step-by-step instructions, videos and tool suggestions and goes one step further by offering users the ability to discuss home improvement projects with professional advisers through video chat. The DIYZ app has been downloaded more than 450,000 times and was featured in the Apple Store’s “New Apps We Love” section. There is also a DIYZ website and a YouTube page linked to the website that has had more than two million views. Consumers may be unaware of the fact that the app is a Stanley Black & Decker Inc initiative because there is no overt marketing of company brands or products. Lastly, the DIYZ app is only available in limited geographies.

Legal

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Environmental

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