Online growth fuelled by independence for iconic tools maker

HiKOKI is the new brand identity for Hitachi Power Tools. Launched in October 2018, it represents a huge change for the seventy year-old business, which has worldwide operations and a reputation for high quality engineering excellence.

Losing the Hitachi name may appear risky, but Nordic Managing Director Thomas Kristensen tells Nigel Wright the company is confident HiKOKI will become an established and leading brand in its own right.

A former Orkla and Jordan executive, Thomas joined Hitachi Power Tools in 2014. The Oslo headquartered Nordic division has since enjoyed strong top-line growth, with FMCG brand strategy critical to its success. And following Hitachi Power Tools’ acquisition by global private equity firm KKR in 2017, heightened investment in innovation, communication and customer service has further strengthened its position across the region, as he explained:

“The Nordics is unlike HiKOKI’s other European markets. While power tools still contribute most of our revenue, we also have a significant presence in other categories like fasteners and nailers. By applying FMCG brand strategy to our MFT fasteners range, for example, we’ve been able to supplement our core product base and provide a good foundation for future growth. Though, there is still lots of untapped potential to exploit these more stable and profitable categories in territories outside of Norway.”

Establishing this multiple product category business model and identifying short and long term growth opportunities have been Thomas’s main activities since joining as Managing Director. This involved implementing a comprehensive innovation program, including both product, packaging and after sales services.

HiKOKI wants to become a “global top three player,” he says, displacing at least one of its main competitors: Stanley Black & Decker, Bosch, and Makita. More and better innovation and brand communications are priorities. And investment is now possible, where previously it was difficult getting the necessary attention amidst competing interests within the Hitachi conglomerate. The business will, however, still leverage its Japanese heritage, namely a “collective culture” and association with high quality engineering and process efficiency, as it seeks rapid growth over the next few years:

“The manufacturing facilities haven’t changed and therefore product quality is retained. In fact, the only difference is cosmetic – i.e. updating the logo. Further investment in end-user communication and innovation will lead to more service and product improvements moving forward. KKR is determined to establish a new brand. Yes, losing the Hitachi name may hurt us in the short term, but it definitely has long term benefits. HiKOKI will  become synonymous with power tools, and nothing else.”

Thomas admitted some nervousness from dealers that product knowledge would decline following the Hitachi sale, but communicating the above, as well as announcing its new MULTI VOLT 36V power tool range to coincide with the brand change, helped alleviate concerns.

As he highlighted, end-users are more interested in a light-weight high-power battery-driven tool, than a logo change. And the initial success of the MULTI VOLT launch confirmed that innovation and quality give the business a strong proposition, even without the Hitachi name.

Unlike other European markets which have individual sales organisations, Thomas notes how he’s responsible for five territories covering Norway, Sweden, Denmark, Finland and the Baltics. With 140 employees, it’s a relatively small operation, but despite its size, HiKOKI Nordics is shaping the future of the wider company, as he explained:

“The Nordic building and construction industry is ahead of the rest of continental Europe when it comes to digital transformation. There’s a higher penetration of professional end-users here that shop via ecommerce sites, including using mobile and tablet platforms to  make purchases, without first visiting stores. It’s a trend that will shape the future of the industry and the Nordics division is a front-leader in utilising this opportunity to further develop services and interfaces for both dealers and end-users.”

In addition to communicating its new brand, HiKOKI is formulating a digital strategy based on insights into Scandinavian purchasing journeys. Efforts will focus on assisting dealers to optimise ecommerce channels so that products are promoted in the best possible way. Improving the diagnostic capabilities of own and dealer websites is another area the strategy will address, to ensure transactions are easy and people are making the right buying decisions. The business is benefitting from a joined-up approach, says Thomas, which helps HiKOKI position itself consistently across the region: 

“Everything from communication, customer service, assortment and how we prioritise and execute campaigns are all coordinated across the Nordics. Silos were an issue when I joined. Each country operated on its own terms and there was little collaboration across borders. Now, we look for collaborative opportunities wherever possible. That means we’re establishing our positioning and embedding a European voice, relevant to our markets.

Setting challenging targets is important, and Thomas revealed he plans to double the size of the Nordic division of HiKOKI over the next few years. By 2020, he hopes the HiKOKI brand will be embedded and that visible improvements across the whole value chain are contributing to European growth. Furthermore, he wants all employees energised and committed to delivering these ambitious goals:

“Everyone here should realise their potential and make a difference. That's why my role is bringing the strategy to life so that employees understand the scale of transformation and how they’re each delivering success. We’re a group of individually strong, team-focused people. We have deep knowledge of local markets, a non-hierarchical structure and a pragmatic Scandinavian approach that enables quick decision making.”

He added: “Success leads to success in my experience. And if our employees are inspired by cooperation and willing to go the extra mile, then we’ll maintain consistent growth and achieve our targets.”