SKIL CASE DISCUSSION ON VIDEO
(SOME POINTS THAT CAME UP)
 Too many models: cannot achieve economies of scale
 Traditionally engineering oriented, product-driven innovator, not costoriented or market-oriented
 Traditional approach is PUSH (and not PULL required by mass
merchandisers): Not much emphasis on the brand name, advertising,
etc.
 Critical choice: Mass Outlets vs. Traditional
WHAT COULD BE DONE?
 Trim product line, differentiate from Black & Decker. Build on image
of SKIL through advertising, professional image, target at the upscale
sophisticated consumer
 Avoid channel conflict. Focus on a narrower range of channels; may
result in the loss of some business; but likely to do better in the
remaining
 Hardware stores have higher costs, more dependent on margins,
weakness of B&D. Take advantage of that.
 B&D is committed to a wide line, more so than SKIL due to their
PULL strategy. They have to take advantage of market economies.
Why not take advantage of SKIL’s smallness and focus on some
specific channels
 But should SKIL trim so sharply as to limit itself to circular saws?:
Trade-off
 General need to redesign & standardize; decrease number of products
& product families
SKIL’S NEW STRATEGY

Decreased number of distribution channels
-- streamlined sales force and production
-- enlisted support of hardware stores, home centers, etc.

Moved from stuck in the middle to FOCUS COST
-- reduced product line
-- redesigned/product families: STANDARDIZATION
-- decreased number of parts on each machine
-- global models

Decreased no. of plants; increased volume per plant More vol. Per model,
more automation, vertical integration

Made automation flexible, more models/production line

Just-in-Time philosophy; reduced inventories
INTERVIEW WITH PRESIDENT OF SKIL
BILL DAVIS
 Patience is important, you need time
 If you change strategy too frequently, you will not get there
 Be ready for culture shock
 Strategic health vs. Financial Health
 Keep track of customer needs, what channels are doing, etc. May
need to change distribution positioning over time
 Be ready for the responses of competitors
 Know what you are and be the best in that
SKIL CORPORATION
LESSONS
 Don’t imitate: Choose new positioning
 Focus on target
 Make tough choices: Dare to trade-off
SKIL CORPORATION
CONCLUSONS
 Create a formal process
 Use a multifunctional team
 Communicate strategy: inside and outside your organization
 Be consistent over time
 Use proper measurement
 Test strategy continually: no company actually masters strategy