Their size has left them vulnerable to more flexible competition that can produce at a lower cost.
Opportunities: They have an ideal opportunity to substantially expand their market share in the cordless market. Though the distributor network is currently a weak spot, Smith and White has an opportunity to restructure their distribution to their benefit. Their large size and brand recognition would give them the opportunity to form channel partnerships or enter direct marketing outlets such as through a web site.
Threats: Their largest competitor, Makatume, can compete on price. Makatume has older battery technology, but has the cost structure to develop new technology, enter that market, and pre-empt Smith and White. Smith and White would be forced into a follower position on technology and price. Also, Able is on the horizon with a strong cordless product. They have been seeking a buyout or merger, which could reinvigorate them as a major threat. There are also several smaller companies that have no barriers to expanding and innovating.
Smith and White needs to take 3 aggressive actions: Reduce costs, enter the battery market, and differentiate the professional line. This would be accomplished by making the professional and consumer lines separate business units. ...