Market Analysis of Leatherman Tool - Essay Example

Strengths:
- Each tool has a 25-year guarantee.
- Only manufacturer in the US of foldable, all-in-one multi-tools.
- Cheap labor available from Portland.
- Toyota Production System implementation.
- Only provider of tool solutions as compared to competitors.

Weaknesses:
- Competitor selling for 20 bucks whereas LT sells for $.
- Labor-intensive manufacturing.
- Only tools solutions whereas competitors provide solutions to other personal and home requirements.
- Set-designed tool kit does not facilitate a customized solution kit.

Opportunities:
- Robotic manufacturing to cut costs.
- Outsourcing like competitors to reduce cost.
- Customized solution of the toolkit on customer requirements.
- Introducing other travel solutions such as travel gear, etc.
- Developing strategic alliances with airlines that allow taking up LT tool kits on commercial airlines.

Threats:
- Cheaper versions from competitors can take up the market even with quality compromised (Knox).
- Competitors may take upmarket by facilitating their tools with other home and personal solutions; e.g. pocket knife tool kit with outdoor gear (Hoovers (a); Hoovers (b)).

Victorinox Swiss Army, Inc, commonly known as Swiss Army Brands, is the only provider of iconic Victorinox Swiss Army Knife. Apart from the knives, it provides a wide range of products from apparel, fragrance, and other accessories in a flagship store (Hoovers (a)).

Buck Knives Inc. involves four generations of expertise in a variety of knives from the pocket, home-usable, fish, and sportsmen to army knives requirement, etc. Buck Knives Inc, like most US businesses, has outsourced its manufacturing unit to the Asian market for cost efficiency; however, knife experts are making efforts to get back to the USA and regain the “made in the USA” label for their product.

Wenger North America is another American company providing a wide variety of accessories from watches, footwear, and cases for cameras and knives toolkits to U.S. and Caribbean consumers. Products of Wenger North America are available only in specialty stores (Hoovers (b)).

The market for Leatherman Tool Group is much wider than that served by its close competitors. Three competitors discussed above provide solutions to single tool requirements of the customers such as a variety of knives etc. On contrary to this, Leatherman Tool provides a complete range of solutions to a variety of tools, such as pliers, screwdrivers, files, blades, pruners, etc., and other needs usually combined in a single tool kit, making it easy to carry and handle. Hence, competitors’ products are just one area of expertise for Leatherman Tool Group. Despite the stark price contrast where many other competitors sell products at a small price, expensive Leatherman Tool products retained their market with high prices. Leatherman Tool with its expertise in tools has also in the recent past introduced the tool kit at a relatively much lesser price. The market faced intense competition with the production of tools outsourced to Asian countries taking cost benefit; however, competitors are now making efforts to regain their “made in the US” mark back; a label that Leatherman Tool maintained and benefitted from. Leatherman Tool retains the competitive advantage of only manufacturer of toolkits with a manufacturing facility in the US; hence, wins the priority for customers’ preference (Knox). Moreover, the company is facing competition over price in the market; however, competition over quality cannot put Leatherman Tool back. The evidence for the fact remains that customers often contact Leatherman Tool to get the sheath of their tool kit replaced for the kit being used for years. Hence, the quality race is still won by Leatherman Tool as customers prefer to get sheath for their already-in-use Leatherman Tool, rather than buying a new “few bucks solution” made available from competitors.

Leatherman tools are the only provider of the foldable all-in-one multi-tool kit of more than 30 products in a dozen of ways, providing solutions to a wide variety of expected and unexpected cases. The tool kit has a quality solution for the young to luxury market making it the choice of all; hence, making it a superior facilitator as compared with the competitors with a “made in the USA” label.

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