The Little Black Book of Strategic Planning for Distributors

by Brent R. Grover

Stanley Black & Decker Shifts Resources to Meet Strategic Objectives

Stanley Black & Decker (NYSE: SWK) has agreed to sell its Hardware & Home Improvement Group to Spectrum Brands Holdings for $1.4 billion. With 90 percent of the H&HI Group’s revenues coming from North America, Stanley Black and Decker says the divestiture is a step toward continued diversification of its geographic footprint.

While some of the sale proceeds will go towards share repurchasing and debt reduction, the company will reinvest much of the profits from the divestment to help fund the acquisition of Infastech, a global manufacturer and distributor of fastening technologies headquartered in Hong Kong.

The strategic reallocation of resources as a way of targeting profitability “sweet spots” is something Brent Grover discusses in his latest book, The Little Black Book of Strategic Planning for Distributors. Brent says that although many distributors are tempted to “target” everything, targeting must be done carefully because all companies have limited resources.

Brent advises companies to analyze geographic markets, products and customer segments to determine whether each area should be grown, maintained or harvested. Grow and maintain categories continue to receive supporting resources, while harvest categories don’t receive any additional time or money.

Stanley Black & Decker’s decision to divest its Hardware & Home Improvement Group reflects a renewed focus on segments with high growth potential – not just those with currently high revenues. “While HHI is a healthy and profitable business,” says Stanley Black & Decker president and CEO John Lundgren, “its characteristics are inconsistent with Stanley Black & Decker’s strategic objectives of diversifying our revenue base through further expansion into targeted end-markets with higher growth and margin profiles, including emerging markets.”

Brent shows distributors how to find their own profitability sweet spots, both present and future, in his new book. He explains how to determine which geographic areas to grow, maintain, harvest or discard by using segment and growth-profitability matrices, which are included with the book.


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