Hilti Vs Makita

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1 Description of Market Offerings

HILTI

Being one of the world’s leading manufacturers of professional power tools, HILTI AG, based in Liechtenstein, comprises a large scope of product lines including anchor systems, construction chemicals, cordless systems, tools for cutting, sawing, grinding, diamond coring, drilling, screwing, measuring and fastening. One of its core technologies, tracing back to the beginnings of the company, is direct fastening, which is defined as “the technology of driving a fastener by a tool using a propellant into a base material to attach a fastened material” (HILTI, 2016). In other words, direct fastening means to drive a nail, pin or brad into a material without having to drill a hole and maybe use an anchor for fixing it in that hole. HILTI offers three actuation types for direct fastening: powder actuated, gas actuated and battery actuated (HILTI, 2016). For this case, the focus was set on the battery actuated tools, and more specifically on HILTI’s recently introduced BX3 tool.

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Figure 1. HILTI BX3 Direct Fastening tool

According to HILTI’s product management of the direct fastening tools, the main customers of direct fastening are electricians and interior finishing. To those professionals, direct fastening provides a high value, since it increases the speed of the work while simultaneously decreasing the number of labor force needed. Additionally, and hereby also reflecting on the chosen tool BX3, which is battery actuated, such cordless fastening systems are independent on power outlets, the weather and time-consuming pre-work and due to their relatively light weight are easy to use, even with overhead work.

Makita

Similar to HILTI, Makita is also a major international manufacturer of “industrial quality power tools and outdoor power equipment,” and simultaneously offers a “wide range of industrial accessories” (Makita, 2016). Different from HILTI, Makita specialized on light-weight, compact and cordless lithium-ion tools, among them the 18v LXT® Lithium-Ion Cordless Pin Nailer and the 18v LXT® Lithium-Ion Cordless 2” Brad Nailer, the latter, which we are going to focus on for means of comparison.

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Figure 2. Makita 18v LXT® Lithium-Ion Cordless 2” Brad Nailer

In the following, value and price elements of both market offerings are going to be identified and listed before being categorized according to points of parity, difference and contention. Then, the six most relevant points of difference and quantifiable points of contention are going to be used to build word equations for both market offerings, which are finally used to build a customer value model.

2 Identified Value Elements

3 Points of Parity, Difference and Contention

In the following a description points of parity, difference and contention can be found. First we need to understand what these are in order to be able to discuss them between the two market offerings. Points of parity are those price or value elements which are roughly the same for the focused company as its next best alternative. Points of difference as in its name refers to the elements which are exceeding the competition and last but not least points of contention are those which cannot demonstrate its validity due to lack of evidence but claim to be superior than the competition.

When talking about points of difference there are many between the two market offerings but probably to most important are the customer engagement and the warranty the two company offer. HILTI is focusing heavily on customer support with offering on site demo, allocating heavy resources on personal selling and offering after sales support while following a policy of loyalty through warranty to their customers. This means that HILTI is more committed to their customers than MAKITA.

4 Word Equation

For the word equations we focused on the selected points of difference and points of contention, that are the value elements such as customer engagement, customer relationship, warranties, applicability to materials, cost savings minus the price elements, the price itself.

For calculating the value and price elements in a numerical dimension, we rated the different parts of the value elements on a scale from 1 to 6 and then weighted them. The value element customer engagement was divided into the parts onsite demo, personnel selling and after sales such as repair and replacement. As Makita does not offer onsite demos, 0 points were given to Makita and 5 points to Hilti. As Hilti is more engaged in personnel selling than Makita, 4 points were given to Hilti and 2 points to Makita. Also regarding after sales, Hilti has a better service because of its 1-day policy. That is why Hilti received 4 points and Makita 2 points. In summary, Hilti has 13 points and Makita has 4 points in customer engagement. The value element customer relationship was divided into complaint management, service centres and touch points. Because of the short weekly survey and a fast reaction to it, Hilti receives one point more (4) than Makita (3). As Hilti has only own and high qualified service centres and does not rely on authorized service centres, we evaluate this as a better opportunity to strengthen customer relationship. Thus, Hilti receives 4 points and Makita 2 points. As Hilti offers his customers various more direct touch points, we awared Hilti 4 points and Makita 2 points, in the end resulting in 12points for Hilti and 7 points for Makita. Regarding warranties Hilti was given 6 points because of its outstanding and exceptional 20 years warranty on materials and workmanship whereas Makita only offers 3 year warranty and thus, received 1 point. In case of the 3 years warranty on wear and tear Hilti received 3 points and Makita 0 points as Makita does not offer any warranty in this field. Regarding the applicability to materials, Hilti’s BX-3 ME can be used for steel and concrete which is very special and thus worth 3 points. Makita’s direct fastener can be used for wood, which not the same kind of revolution, thus Makita receives only 2 points. In summary, Hilti has two points more (4) than Makita (2). Finally, we calculated the cost savings as 36% of the normal cost plus the advantage of the certified tool^[a]. As both companies can offer cost savings up to 36% they both received 5 points. Finally, the price was rated the following: 4 points for Hilti as the product is much more expensive and 1.5 points for Makita. Afterwards all the results were weighted according to the summed score in each category. Thus, for instance the summed score for customer engagement is 17. Thus, the weighted score for Hilti is 13 divided by 17 (=0.76) and the weighted score for Makita is 4 divided by 17 (=0.24).

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