Sunbeam and "Chainsaw Al"
Steps Three and Four
The third step was to focus on Sunbeam’s core business, which first needed to be defined. Dunlap and his "Dream Team for Sunbeam" defined the core business as electric appliances and appliance-related businesses. Five categories surrounding the core business were identified as vital to Sunbeam’s success: kitchen appliances, health and home, outdoor cooking, personal care and comfort, and professional products. All products that did not fit into one of these five categories were sold. The criteria Dunlap used to decide whether to keep or sell a product line was simple and straightforward. He firmly believed that the Sunbeam name was one that consumers fondly recall. His criterion then was the answer to the simple question: does the Sunbeam name relate to the product or does the product relate to Sunbeam? Only those products that clearly related to Sunbeam were kept. Identifying and paring down to Sunbeam’s core business was the goal of the third step.
The final of Dunlap’s four simple rules of business is to get a real strategy. Dunlap and his team defined Sunbeam’s strategy as driving growth of the company through core business expansion by further differentiating products, moving into new geographical areas, and introducing new products that tied directly to emerging customer trends as lifestyles evolve around the world. The first step in implementing the strategy was done by reengineering the electrical appliances to 220 volts so they could be used and sold internationally. Reclaiming the differentiation between the Oster and Sunbeam lines was also one of the strategies. Each was designed, packaged, and advertised to target different markets. Oster products were positioned as upscale, higher-end brands and sold in completely different retailers than the Sunbeam lines. The Sunbeam line of products was positioned as an affordable, middle-class brand. In the beginning of 1997, ten Sunbeam factory outlet stores were opened to help increase brand awareness, sales, and ultimately shareholder wealth. Each of Dunlap’s four rules had been reviewed and changes had been made within seven months of his taking the position to complete the turnaround of Sunbeam. The stock had risen to over $48 per share, a 284 percent increase since July 1996.