Joseph johnson snap on tools

C a s e 33

Snap-on ToolS’ hiSTory began in 1920, when JoSeph JohnSon and william Seidemann used their idea of interchangeable sockets and wrench handles to form

the Snap-on Wrench Company. The concept of ten sockets that “snapped on” to five interchangeable handles revolutionized the tool industry. Through the years since then, Snap-on continued to innovate and create new tools and products. To sell their products, the company’s founders turned to Stanton Palmer, who

demonstrated the benefits of bringing tools directly to customers at their places of business. This became the cornerstone of the company’s marketing success.

Snap-on’s founders expanded on the concept of bringing products to customers through fully stocked walk-in vans, thus pioneering the familiar franchisee van chan-

nel. This strong connection and one-on-one relationship with customers allowed the company to thrive. The franchises introduced and demonstrated to customers all new products—top quality, modern design, hand tools; power tools built for demanding situations; attractive and neat tool storage; and intelligent and powerful diagnostics products. In addition to the canny design of basic mechanics’ tools such as inter- changeable sockets or the Flank Drive® wrenching system, Snap-on’s line card grew until it offered nearly 14,000 products featuring innovative designs and precision manufacturing.1

The author would like to thank Barbara Gottfried and Pamela Miller and Bentley University MBA students Gintaras Lenkutis, Konstantin Mikhailov, Mary-Helen Nsangou, Jonathan Safran, and Safiya Samms for their research and contributions to this case. Please address all correspondence to: Dr. Alan N. Hoffman, Dept. of Management, Bentley University, 175 Forest Street, Waltham, MA 02452-4705, ahoffman@bentley.edu, (781) 891-2287. Printed by permission of Dr. Alan N. Hoffman.

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33-2 Case 33 Snap-on Tools: A Victim of Its Own Success

Snap-on’s innovation led to manufacturing tools for industries including aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation and technical education.2 Over the past decade, education also became an important focus for Snap-On: it was the company’s belief that it was in its best inter- est to train up-and-coming auto mechanics who would become its future customers, and that developing a skilled labor force was an issue of national concern. Though Snap-on was never a mainstream company, it always felt that its greatest means of promotion was word-of-mouth testimonials. Its visible association with motor sports, and its professional relationship with auto racing for more than 70 years served it very well.

As of 2013, Snap-on was a $2.9 billion, S&P 500 company headquartered in Kenosha, Wisconsin, which offered products and services around the world. The com- pany was divided into four business groups: (1) the Commercial & Industrial Group; (2) the Snap-on Tools Group; (3) the Repair Systems & Information Group; and (4) Financial Services.

Strategic Direction Snap-on’s mission was to manufacture and distribute premium hand and power tools, serving the global vehicle services industry with productivity solutions including tools, equipment, diagnostics, repair information, and systems solutions. Its vision was to be seen as the first choice of employers, franchisees, business partners, and investors and to support serious professionals in the automotive industry, while at the same time inno- vating and expanding its product lines to engineering industries including aerospace, aviation, and oil and gas.

Snap-on had three major strategic objectives:

1. Enhancing its franchise network—Snap-on worked closely with franchisees to improve their profitability and increase their sales. To strengthen its outreach to this customer segment, the company created the “Snap-on Masters of Metal Tour.” Each event showcased a customized truck dubbed the “Rock ‘n Roll Cab Express” which highlighted a variety of tool storage units and accessories that offered automotive technicians the opportunity to try Snap-on’s tools and meet Snap-on factory associates.

2. Expansion in the garage—Snap-on sought to expand its presence with owners and managers of vehicle service and repair facilities by providing them with better, more efficient performance solutions. To do so, Snap-on came up with the “Integrity Test Drive by John Bean,” a system which quickly performed a detailed vehicle inspection. Winner of the 2012 MOTOR Magazine Top 20 Tools award, the system integrated several products that together enabled the shop to quickly diagnose problems, fix vehicles on the first visit, and increase revenue.

3. Building in Emerging Markets—As repair industries developed in emerging mar- kets, Snap-on sought to expand to these rapidly growing economies and participate in the building of repair infrastructure. In 2012, it opened its fourth manufacturing facility in Kunshan, China, where it manufactured undercar equipment, an impor- tant, high-value product line for the local market. Kunshun joined existing Snap-On facilities for power tools, cutting tools, and tool storage manufacturing plants, as well as a modern engineering and research and development center.

When the Snap-on Wrench Company was formed in 1920, it was built on innova- tion. The original Snap-on wrench set revolutionized the tool market by creating a new product in an old industry. By 2013, Snap-on had 600 patents either confirmed or pend- ing in the United States, and held 1,500 globally. Even its website encouraged would-be