Businessweek

Briggs & Stratton Corporation engages in producing air cooled gasoline engines for outdoor power equipment. The company designs, manufactures, markets, and services these products for original equipment manufacturers worldwide. It also markets and sells related service parts and accessories for its engines. The company, through its wholly owned subsidiary, Briggs & Stratton Power Products Group, LLC, designs, manufactures, and markets generators, pressure washers, snow throwers, lawn and garden powered equipment, and related service parts and accessories. Segments The company operates through two segments, Engines and Products. Engines This segment manufactures 4-cycle aluminum alloy gasoline engines with displacements ranging from 125 to 993 cubic centimeters. The company’s engines are used primarily by the lawn and garden equipment industry. Major lawn and garden equipment applications include walk-behind lawn mowers, riding lawn mowers, garden tillers, and snow throwers. The engine are also sold for use on products for industrial, construction, agricultural, and other consumer applications, which include generators, pumps, and pressure washers. The company serves its primary international markets through its European regional office in Switzerland; its distribution center in the Netherlands; and sales and service subsidiaries, and offices in Australia, Austria, Brazil, Canada, China, the Czech Republic, England, France, Germany, India, Italy, Japan, Mexico, New Zealand, Poland, Russia, South Africa, Sweden, and the United Arab Emirates. The company also supplies gasoline engines in developed countries where there is a lawn and garden equipment market. It also exports engines to developing nations where its engines are used in agricultural, marine, construction, and other applications. Its export sales are principally to customers in European countries. The company's engines are sold primarily by its worldwide sales force through direct interaction with customers. This segment also manufactures replacement engines and service parts, and sells them to sales and service distributors. The company owns its principal international distributors. In the United States, the distributors are independently owned and operated. These distributors supply service parts and replacement engines directly to independently owned, authorized service dealers worldwide. Customers The company’s customers include Husqvarna Outdoor Products Group (HOP); MTD Products Inc. (MTD); and Deere & Company. Its lawn and garden powered equipment sold in the United States is sold through mass merchandisers, such as The Home Depot, Inc. (The Home Depot); Lowe’s Companies, Inc. (Lowe’s); Sears Holdings Corporation (Sears); and Wal-Mart Stores, Inc. (Wal-Mart). Joint Ventures The company has joint ventures with Daihatsu Motor Company for the manufacture of engines in Japan; and with Starting Industrial of Japan for the production of rewind starters and punch press components in the United States. The company has a strategic relationship with Mitsubishi Heavy Industries (MHI) for the global distribution of air cooled gasoline engines manufactured by MHI in Japan under Briggs & Stratton’s Vanguard brand. Seasonality The majority of lawn and garden equipment is sold during the spring and summer months when majority lawn care and gardening activities are performed. Competition The company’s major competitors include Honda Motor Co., Ltd. (Honda); Kawasaki Heavy Industries, Ltd.; and Kohler Co. Products This segment’s principal product lines include portable and standby generators, pressure washers, snow throwers, and lawn and garden power equipment. This segment sells its products through multiple channels of retail distribution, including consumer home centers, warehouse clubs, mass merchants, and independent dealers. This segment’s product lines are marketed under its own brands, such as Briggs & Stratton, Snapper, Simplicity, Ferris, Snapper Pro, Murray, and Victa, as well as other brands, such as Craftsman, John Deere, GE, and Troy-Bilt. This segment has a network of independent dealers worldwide for the sale and service of snow throwers, standby generators, and lawn and garden powered equipment. Customers The company’s customers include Lowe’s; Sears; Deere & Company; Wal-Mart; The Home Depot; Tractor Supply Inc.; and a network of independent dealers. Seasonality This segment’s sales are subject to seasonal patterns. Due to seasonal and regional weather factors, sales of pressure washers, and lawn and garden powered equipment are typically higher during the third and fourth fiscal quarters (year ending July 2012) than at other times of the year. Sales of portable generators and snow throwers are typically higher during the first and second fiscal quarters, and could spike during weather related power outage events. Competition The company’s major competitors include Honda; Generac Power Systems, Inc.; Alfred Karcher GmbH & Co.; Techtronic Industries; Deere & Company; MTD; The Toro Company; Scag Power Equipment, a division of Metalcraft of Mayville, Inc.; and HOP. Acquisitions In 2011, the company acquired Premier Power Equipments and Products Private Ltd. of Tamil Nadu, India, which provides a platform for future growth in India. Research and Development For the year ended July 1, 2012, the company spent approximately $19.8 million on research activities relating to the development of new products or the improvement of existing products. Significant Events In October 2012, Briggs & Stratton Corporation announced the opening of a wholly owned subsidiary, Briggs & Stratton (Malaysia) SDN BHD. Briggs & Stratton Malaysia would serve as the regional center of sales, marketing, and technical support for the South-East Asian, Korean and Taiwan outdoor power equipment markets. The company would sell air-cooled engines, power products and provide related service material. History Briggs & Stratton Corporation was founded in 1908.