Able Corporation – A Strategic Overview

Able Corp., as the case portrays, has put very little or no effort in developing its incompetent business lines whose expenses are mostly outgoing rather than incoming. In order to grow in all aspects, Able Corp. will have to make amendments that may incur costs in the initial stages.

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Tangentially ideally means within the same field, in the same sector, or similar to each other. To understand what would affect the power tools industry we have to consider a lot of factors like season, market conditions, sales, supplementary products, and their availability, and so on.

Some of the industries that will affect the power tool industry are:

  • Power: Nearly all of the power tools except the cordless ones require power in order to run effectively. The voltage setting in a particular region or country will affect its direct consumption.
  • Batteries: For all the cordless tools, batteries are used as a part of their functioning. If there is an improvement of the batteries that are available in the market then the power tools can be modified accordingly. (Taylor, 2009).
  • Construction: It is the construction industry that uses a huge percentage of the power tools that are manufactured. The rise and fall of this industry will affect the power tool industry as well.
  • Interior decorating: Most consumers either do their own interior changes or hire a professional to do the same. If people cannot afford to keep changing homes, then there will be a trend of constantly changing the existing environments of their homes. An increase in this trend will also lead to an increase in sales of power tools.
  • Metal industry: Since the tools are made of various metals according to their usage, the rise and fall of the metal industry will proportionately affect the performance of the power tool industry.
  • Automobile industry: Power tools are used for cars that are being manufactured, new cars, and used cars. Most parts are being turned into a car with the help of power tools.

The market for power tools within the USA is worth $8.6 billion and this includes the sales worth of all types of power tools including battery-operated, cordless, electric, and accessories. The markets for imported products are growing constantly with a market share of 57% in the year 2005. (The U.S market for power tools, 2005). In order to forecast the sales of a power tools unit, there are several economic factors that are at play:

  • Housing: The rise and fall of the housing industry will determine the sales revenue for the power tools sector. If the interest rates are lower, then there will be a hike in housing, hence leading to the increase in the usage of power tools.
  • Commercial construction: When there is a rise in the corporate occupancy within the region then there will be a hike in construction which will eventually lead to a rise in power tools sales.
  • Home improvement: If property prices are on a rise then it is possible that people will stick to improving their current residence than changing it. This will again lead to a rise in power tools sales. (Examine the US power and hand tools market, 2009).

It is predicted that within the US the demand for power tools would ideally increase by three percent every year by 2012. It is expected that the US construction field will be fully recovered by then. There will also be increased interest among consumers towards Do-It-Yourself packages that will help in remodeling homes. (Examine the US power and hand tools market, 2009).

Improved cordless tools will create advancements and gains in all existing markets. What has affected the US power tools markets is the huge imports of cheaper and better substitutes from the Asian markets making them the leaders in the field of power tools. Most of the business for power tools within the US has been outsourced to China which is where most of America’s imports come from.

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References

  1. Examine the US power and hand tools market. (2009). All Business: A D&B Company: Simple solutions, Powerful advice.
  2. Taylor, S. (2009). Power tools, tangentially related industries and its effects on the PEPT. Associated Content: Business and finance.
  3. The U.S market for power tools. (2005). Mind Branch. Web.

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