to "The Ultimate Professor" only

MICROECONOMICS OF SNAP-ON

This paper examines the microeconomics of Snap-On Company and its consequences to the firm’s operations. Analysis will focus on the demand and supply conditions within the industry. The determinants of demand and supply for the tools industry ass well as Snap-on are also investigated. Additionally, these papers will presents price elasticity of demands and how it affects the company’s pricing strategies. The cost of production as well as an overall market analysis will be conducted to put the matters into perspective. To help continue such success and improve upon Snap-on’s marketing strategies and activities; a complete business analysis will be provided. This will allow Snap-on to understand its strengths and weakness, as well as discover the best way to take advantage of opportunities. As technology becomes more advance, it is important for Snap-on to continue to be innovative and stay current with what their consumers need. Even more importantly, the findings would provide Snap-on solutions to cut costs; so in turn Snap-on would be able to provide more affordable products and stay on top of competitors. Finally, recommendations pertaining to how Snap-On can improve on its operations in relation to the microeconomics factors will be presented.

Company History

Snap-On, Incorporated is one of the largest and most successful manufacturers and marketers of hand tools, power tools, shop equipment, diagnostic equipment, collision repair equipment, and emissions/safety equipment in the United States. The company makes hand tools such as wrenches, sockets, pliers, ratchets, screwdrivers; power tools such as pneumatic (air) and corded (electric) drills, sanders, and polishers; and a host of other items like wheel balancing and alignment equipment for cars, tool chests and cabinets for industrial, automotive, and aerospace storage applications, and engine and emission analyzing equipment. Snap-On markets its entire range of products through an extensive international network of subsidiaries, dealers, and representatives. The company considers itself the originator of the mobile van method of marketing hand tools.

Early History

Joe Johnson and William A. Seidemann founded Snap-On in 1920. Prior to Johnson's idea for "interchangeable sockets," the socket wrenches used by mechanics were one-piece units. Professional auto mechanics quickly recognized the efficiency and flexibility that resulted from pairing many sockets with few handles. From the beginning, sales were generated by demonstrating the benefits of the novel tool sets directly to the customers. New tools were added to the line, and a catalog was published in 1923. By 1925, 165 salesmen were demonstrating and distributing Snap-On tools.

Stanton Palmer, a former factory sales representative, served as president of the corporation from 1921 until his death ten years later. At that time, Snap-On sought financial help from one of its principal creditors, Forged Steel Products Company, whose owner, William E. Myers, became Snap-On's new president. When Myers died in 1939, Joe Johnson, the corporation's conceptual founder, became the president of both Snap-On and Forged Steel.

Under Johnson's leadership the sales force continued to grow. During World War II, when supplying the military's needs caused tool shortages in the civilian market, Snap-On began releasing available stock to its sales force, in an attempt to maintain goodwill with the civilian customer base. By 1945 all salesmen were carrying stock and making immediate deliveries to their customers. Shortly thereafter, Snap-On made each seller an independent businessperson in an assigned territory.

From humble beginnings, today Snap-on is a 3.3 billion, S&P 500 Company based in the USA providing service all over the world. It has become a leader in the industry and well recognized by all mechanics. Snap-on is known for providing the best service and quality tools to their customers. For a very long time, Snap-on has been known as a mobile tool company selling to vehicle repair mechanics. However, with continued innovation, Snap-on has defined their value proposition more broadly, reaching beyond the garage.  Snap-on today supports serious professionals in critical industries — inside and outside vehicle repair — by delivering a broad array of productivity solutions that make work easier, including tools, equipment, diagnostics, repair information and systems solutions (Company History, n.d).

References

Snap-On, Incorporated History, from www.fundinguniverse.com

Company History. (n.d) Retrieved from http://www.1.snapon.com/corporate/companyhistory.nw