Skil Corporation

1523 words 7 pages

Emerson Electric Company produced a broad range of consumer and industrial products such as electric motors, controls, drives etc. It had a strategy of producing low cost and high quality products. It had embarked on a program of acquisitions to meets its aggressive goals of growing sales 15% annually. It had acquired only financially successful companies. But in 1979, it acquired Skil Corporation, a financially mediocre performing company for $58 million.
Skil was a leading manufacturer of portable power tools serving the professional and consumer markets, the circular saw being the strongest and best seller amongst those tools, which it also invented, and was amongst the top three in power tools market share holdings in
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Owing to its better quality, the prices of the professional market products are higher than the consumer markets and they also provide better margins to the companies manufacturing them. Professional tools were manufactured for use under more intense conditions and hence were designed with more horse power and better strength. Another distinction between types of tools was on the basis of the power on which they operate, there were both battery operated versions and direct power operated versions but the battery operated versions, which were cordless possessed less power than the direct power operated products.
Skil corporation served both professional and consumer market. The circular saw line of Skil Corporation was their single strongest single product area. Skil’s product designs were different for different countries depending upon the local needs of various countries.
Only Skil along with Black & Decker exported and manufactured their products abroad. Black and Decker was their strongest competitor, which offered 280 models designed for either professional or consumer market. Another competitor of them was Sears Roebuck & company, whose differentiating factor was a strong distribution network and is known for it’s after sales service offerings. Rockwell automation, another competitor for Skil Corporation was more into professional market. Other