Case Detail

Case Summary

Stihl Incorporated: Go-to-Market Strategy for Next-Generation Consumers

Case Number: 5-308-501, Year Published: 2008

HBS Number: KEL398

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Key Concepts

Innovation, Marketing Channels, Distribution, Segmentation, Routes-to-Market, Service Outputs

Abstract

Andreas Stihl AG is the world’s leading manufacturer of chain saws and other outdoor handheld power equipment. Based on marketing challenges in its high-volume retail channel—mass merchants such as The Home Depot and Lowe’s—Stihl’s U.S. unit has narrowed its distribution system to a single channel: independent retail dealers specializing in yard maintenance equipment. This risky and highly publicized decision has proved extremely successful, raising profits, attracting more dealers into exclusive relationships with Stihl, and strengthening the brand’s top-quality positioning. But Stihl management are concerned that this channel system may not fit tomorrow’s demographics, dominated by homeowners from the so-called Generation X and Generation Y. The case outlines Stihl’s business and channel systems and customer needs, then poses a series of questions that management believes must be answered to determine whether to maintain or move away from reliance on its specialty retailers and how to adapt its system.

Learning Objectives

Understand issues related to retail channel strategy development in fast-changing consumer markets, as well as the challenges of adapting legacy routes-to-market systems to changing consumer service output demands.

Number of Pages: 32

Extended Case Information

Teaching Areas: Management, Marketing, Strategy

Teaching Note Available: Yes

Geographic: Global

Industry: Consumer Product Manufacturing

Organization Name: Stihl, Inc.

Organization Department: Marketing

Organization Size: Medium

Decision Maker Position: SVP, Marketing and Strategy (USA)

Decision Maker Gender: Male

Year of Case: 2008