On Strategy: How Techtronic Built Share Amid Fierce Competition
By Jack Mixner
If tech sales are slowing, what to do? Plan to grow share. That's what Techtronic is doing, and it seems to be working.
Techtronic's historical strategy is nothing new. They started with a tech product, rechargeable battery packs for cordless tools. They
- won the Sears account to make Craftsman tools. Then they
- bought control of brands including Ryobi, Royal, Homelite and Milwaukee,
- shifted manufacturing to closely held plants in China,
- cut costs,
- loaded on features and
- expanded the product line.
Who bought in? Home Depot sold 25 million Ryobi tools in three years.
Techtronic has a ways to go yet - Black & Decker still controls 30% of the market.
Strategic Implication
Techtronic changed the rules and competed against an entrenched competitor. It will be interesting to watch how it all plays out over time.
The possibilities for your firm? Techtronic started with one successful product line, expanded into contract manufacturing, then bought brands. It took them twenty years.
Think longer term. Focus on a sector until you begin to dominate it. Remember price.
Reference
Engardio, Pete. Techtronic Industries, Hong Kong. 'We Have the Vision To Be No. 1'. BusinessWeek. July 31, 2006. Page 46.