A Chinese manufacturer pursues innovative products to build a global brand.
June 3 -- Tom Duncan and Don Gao grew up worlds apart but they shared a common goal -- build a branded power tool company. Gao was an entrepreneurial Chinese manufacturer who in 1998 started Positec, a contract tool manufacturer, and built his own factory. Duncan had worked in the power tool industry for 20 years. After leaving Robert Bosch Tool Group, he gained the rights to the Rockwell tool brand and was intent on starting his own company.
During the mid-90s, Positec was growing at a double-digit rate annually. Gao shipped 700,000 angle grinders one year to Black & Decker. But the tool giant decided to make the grinders itself. Gao came to the conclusion that he wanted to control his own destiny. He would remake the company from a contract manufacturer to a producer of branded products. He met Duncan and hired him as president and CEO of Positec USA to run his North American operations.
Despite their track record in the industry, Duncan notes, they had a tough time selling the idea of their transition to a brand company to large chains such as Home Depot and Lowe's. But they soon landed on another approach. Positec developed high-quality infomercials to sell its line of WORX lawn trimmers directly to consumers. The infomercials proved a success and enabled Positec to gain access to the big box retailers. Today, nearly 60% of Positec's sales are through retail stores.
Different by Design
As Duncan notes, it is one thing to gain access to retail stores, but you need to have products that stand out from the established brands. Gao understood the importance of visual appeal and hired Paolo Andriolo, based in Vicenza, Italy, to design products that were ergonomic, easy to use and visually attractive.
Perhaps most importantly, Positec focused on cordless electric trimmers rather than following the industry's traditional concentration on gas-powered machines for men. The company was able to produce light tools with lithium ion batteries and no pull-cord starters. The battery technology not only reduced weight but held its charge without fading, allowing the machines to run at full power until they were fully discharged. Company leaders decided they would target women buyers with these machines. The strategy worked. "The market for cordless trimmers the year before we launched was in the neighborhood of 400,000 pieces," Duncan recalls. Positec sold 400,000 cordless trimmers in its first year, doubling the market. Positec now sells 60% of its trimmers to women.
While Chinese companies have not been viewed as innovators for the most part, Positec has emphasized innovative product development in its culture. The company has registered more than 2,000 design and product patents in its 12-year history. In keeping with their mission of producing products that make people's lives easier, a number of these developments improve user safety and health. Product features include VibraFree, a vibration-cancelling technology, and Cyclonix, a system for sanders that separates air from the dust and is designed to reduce the risk of wood dust-related respiratory conditions.
"We are just launching a product called the JawSaw, which is basically a safe chain saw," says Duncan. The electric-powered chain saw is contained in the jaws and only exposed when cutting. Noting that thousands of chain saw injuries occur each year, Duncan says the idea for the JawSaw originated with the company's Australian design office. It was then sent to China for engineering design and to Italy for its exterior design. The U.S. team conducted end user research that resulted in the development of a pole mechanism to reach up into tree limbs, rather than have users climbing on ladders.
That global approach to the business has led the company to pursue talent wherever it can find it and to skillfully blend these talents in its pursuit of innovation, a trait Lowe's recognized when it named Positec its "2010 Innovator of the Year."
Last year, Positec reached $350 million in revenue, with 60% of sales coming from North America. And despite a late start this year to the outdoor season in the Midwest because of heavy rains, Duncan expects Positec's continued launching of new products to keep propelling sales upward.
www.industryweek.com
