Black & Decker 2011 Annual Report Download - page 20

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Low demand for new products and the inability to develop and introduce new products at favorable margins could adversely
impact the Company’s performance and prospects for future growth.
The Company’s competitive advantage is due in part to its ability to develop and introduce new products in a timely manner at
favorable margins. The uncertainties associated with developing and introducing new products, such as market demand and costs of
development and production may impede the successful development and introduction of new products on a consistent basis.
Introduction of new technology may result in higher costs to the Company than that of the technology replaced. That increase in costs,
which may continue indefinitely or until and if increased demand and greater availability in the sources of the new technology drive
down its cost could adversely affect the Company’s results of operations. Market acceptance of the new products introduced in recent
years and scheduled for introduction in 2012 may not meet sales expectations due to various factors, such as the failure to accurately
predict market demand, end-user preferences, and evolving industry standards. Moreover, the ultimate success and profitability of the
new products may depend on the Company’s ability to resolve technical and technological challenges in a timely and cost-effective
manner, and to achieve manufacturing efficiencies. The Company’s investments in productive capacity and commitments to fund
advertising and product promotions in connection with these new products could erode profits if those expectations are not met.
The Company’s brands are important assets of its businesses and violation of its trademark rights by imitators, or the failure of its
licensees or vendors to comply with the Company’s product quality, manufacturing requirements, marketing standards, and other
requirements could negatively impact revenues and brand reputation.
The Company’s trademarks enjoy a reputation for quality and value and are important to its success and competitive position.
Unauthorized use of the Company’s trademark rights may not only erode sales of the Company’s products, but may also cause
significant damage to its brand name and reputation, interfere with its ability to effectively represent the Company to its customers,
contractors, suppliers, and/or licensees, and increase litigation costs. Similarly, failure by licensees or vendors to adhere to the
Company’s standards of quality and other contractual requirements could result in loss of revenue, increased litigation, and/or damage
to the Company’s reputation and business. There can be no assurance that the Company’s on-going effort to protect its brand and
trademark rights and ensure compliance with its licensing and vendor agreements will prevent all violations.
Successful sales and marketing efforts depend on the Company’s ability to recruit and retain qualified employees.
The success of the Company’s efforts to grow its business depends on the contributions and abilities of key executives, its sales force
and other personnel, including the ability of its sales force to adapt to any changes made in the sales organization and achieve
adequate customer coverage. The Company must therefore continue to recruit, retain and motivate management, sales and other
personnel sufficiently to maintain its current business and support its projected growth. A shortage of these key employees might
jeopardize the Company’s ability to implement its growth strategy.
We have significant operations outside of the United States, which are subject to political, economic and other risks inherent in
operating outside of the United States.
We generate revenue outside of the United States and expect it to continue to represent a significant portion of our total revenue.
Business operations outside of the United States are subject to political, economic and other risks inherent in operating in certain
countries, such as:
• the difficulty of enforcing agreements and protecting assets through legal systems outside the U.S.;
• managing widespread operations and enforcing internal policies and procedures such as compliance with U.S. and foreign
anti-bribery and anti-corruption regulations;
• trade protection measures and import or export licensing requirements;
• the application of certain labor regulations outside of the United States;
• compliance with a wide variety of non-U.S. laws and regulations;
• changes in the general political and economic conditions in the countries where we operate, particularly in emerging
markets;
• the threat of nationalization and expropriation;
• increased costs and risks of doing business in a wide variety of jurisdictions; and
• limitations on repatriation of earnings;
Changes in the political or economic environments in the countries in which we operate could have a material adverse effect on our
financial condition, results of operations or cash flows.