Page - 1 - of 25 Pages Joe Blow XYZ Tool Company-ABC brand 1.LMN Tool Company (LMN) manufactures, sells, and services tools. LMN has been part of the XYZ Tool and Storage Division for the past 25 years. The roots of LMN are found in plumbing related tools, but over the years have extended out into various other hand tools and hand tool accessories. Some examples of the tools LMN manufactures and sells are; tubing and pipe cutters, pipe threading and fabrication tools, drain cleaning tools and machines, diagnostic equipment (line locators, cameras, etc.), and the ABC brand staple, pipe wrenches. In the early 1990’s LMN and XYZ reached an agreement with BBB to become the proprietary brand of one of the world’s largest home improvement warehouse. The agreement stipulates that BBB is the only retailer that can purchase ABC branded product. However, the vast majority of LMN’s business is still done with traditional wholesale customers and supply houses. The goal for BBB was to have an in-house brand with a strong professional reputation, ala PPP at QQQ. By bringing in a strong in-house brand BBB hoped to generate foot traffic in the store and at the same time increase margins. The benefit to XYZ and LMN Tool was increased revenues via licensing agreements, a strong partnership with the growing BBB business, and increased brand awareness outside of the traditional plumbing supply houses where ABC had been sold. It can be an interesting relationship because the goals of ABC do not necessarily align with the goals of BBB. BBB’s desire is to build brand volume, not build brand equity. Currently there are nine companies (four in XYZ and five outside of the XYZ family) that have licensing agreements with LMN. Although these nine companies are run autonomously from LMN, we have the final say-so in what products will don the ABC name brand. The following brand analysis will report only the ABC brand as it relates the parent company, LMN. 2. Porters “Five Forces” Model as it relates to the plumbing equipment industry (see figure below)
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