Q1. Black & Decker management seems to be emphasizing the development of “new products”. Why do you think a profitable firm would be so interested in new products? Discuss. Must it ?? Pls Answer the Question from the Below Context:

Black and Decker, a noted marketer of products for the do-it-yourself market, acquired the General Electric Company’s small home appliance
business in 1985 for $300 million. B&D had enjoyed a 50 percent market share in the worldwide market for power tools, but the recession of the early 1980s and competition, especially from the Japanese, forced changes in manufacturing and marketing at B&D and led to the GE acquisition. Makita of Japan, for instance, which offered competitive power tools at a lower price, and in a very short time its market share was nearly equal to B&D’s. Alongside emerged a host of other emerging brands

B&D executives realized that the company could not stand still, and ride on past successes. It had done fine in past, but the present scenario was a different conversation. Consumers were changing and international brands were making aggressive inroads into the US, and North American markets at different price points and addressing different segments of the population.
The company began losing money In 1982 B&D lost $77 million, primarily due to the sale and write-off of McCullough chain saws. Losses had increased to $158.4 million in 1985 with plant shutdowns and other cost-saving measures, but then swung back to a 1987 profit of $55.6 million. The profits came about in part due to the closing of six plants and the elimination of 2,000 jobs, and the simultaneous turnaround in power tool sales. Much has happened since then.

The GE acquisition allowed B&D to combine its technical and manufacturing abilities – mainly in motor design and cordless appliances – design and cordless appliances – with GE’s sales and distribution know- how. One hundred household appliances from GE were added to B&D’s 500 products to make up the B&D product mix. Executives believe the B&D brand name is strong enough to support almost any consumer gadget, but retailers are not so sure. The channel arrangements are not as confident. The GE name has been an asset in selling at the retail level, but will a woman buy a B&D mixer? The Dust buster Cordless vacuum sweeper, however, has been very successful for B&D. Still, B&D is known in the hardware, not in the houseware, sections of most stores. B&D has designed a hair dryer for men – men are somewhat aware of the brand and know the B&D name.

However, research indicates that there is also high name recognition among women. Four models of the hair dryer called Black Tie have been test- marketed. More new products – in both the power tool and small appliance divisions – are to be developed and backed by extensive advertising. The GE acquisition helped accelerate B&D’s new product development. In the past, the marketing of household appliances a short life cycle: designed to do a specific job, produced in large volume, promoted extensively but briefly, and then ignored. B&D is out to break this mold. The company is eyeing international markets and possible collaborations & potentials.