Gillette Case Study Essay Example For Students

Gillette Case Study Essay Executive Summary Gillette is a world known multinational company in shaving products market and holds more than 70% market share (Hartline 2007) in this segment. Since its very inception in 1901, Gillette has always been envied for delivering the finest shaving care products both for men and women. Besides, it has also diversified its product lines extending it to toothbrushes, toiletries, stationeries, cosmetics and other household appliances. Originated in Boston, Gillette has been dominating its domestic market in the United States since starting and then slowly and gradually becoming a global leader. This case study provides an overview of the constant product innovation by Gillette throughout its’ history and scope for further research and development in an innovation driven wet shaving market. The case also discusses the strategy of Gillette for further expanding its dominant market share around the world under the ownership and guidance of Procter and Gamble (PG) and making Fusion – a first five-bladed razor its flagship brand. While doing this Gillette also has to face stiff competition from its premier competitors, Wilkinson Sword-Schick Company and BIC. Though being at the top, Gillette now deals with the problem of product innovation in a somewhat stagnant and mature shaving market and needs to find other ways to remain on top. The possible solutions relate to acquiring its competitors’ business, developing and expanding the women’s market and further reducing the prices to reach more customers. It calls for some broad recommendations and implementation. SWOT Analysis Internal Strengths †¢ World leader in producing extraordinary shaving care products of world class quality through constant innovation and successful in most of them †¢ Holding a major share of the global wet shaving market (more than 70%) (Hartline 2007) †¢ Huge financial resources at its disposal giving Gillette an edge over the others for extensively undertaking Research and Development (RD) activities for product development and innovation †¢ Well established production and marketing channels worldwide †¢ Diversification of Gillette’s product lines to toiletries, cosmetics and other home appliances, thus providing a complete range of shaving solutions †¢ Fair price of all the major shaving products (customers get the value for money) †¢ Differential marketing i. e. it adopts different marketing strategies for different market segments from country to country (Hartline 2007) Internal Weaknesses †¢ Some analysts consider that Gillette is growing slowly in the world market and is still below its’ actual potential (Hartline 2007) †¢ Past diversification activities and acquisitions have not been very successful (Hartline 2007) †¢ Gillette’s involvement in too many lawsuits increase the company costs and also affect its’ brand value (Hartline 2007) †¢ Predominant reliance on single product line- 2/3rd profits from razor blade and razor division †¢ Delayed response to competitors’ moves The company seem to diversify haphazardly External Opportunities †¢ Increasing demand for personal grooming products worldwide due to sociocultural trends †¢ A huge portion of global population both men and women shaving with a razor blade †¢ No close competition from any other company (Schick claims only 18% of the market and BIC holds about 5%) (Hartline 2007) †¢ Majority of Gillette’s sales is ge nerated outside the United States (more than 60%) (Hartline 2007) External threats Many industry analysts believe that Gillette has come to an end of its’ historical product innovations in the already grown-up wet shaving market †¢ Industry analysts believe that Schick may introduce a six-bladed razor anytime in response to Gillette’s five-bladed Fusion †¢ Growing popularity of use and throw away disposable razors (serious competition from BIC in this segment of the market) †¢ Problem of cannibalization with most of its products Problem Identification and Analysis Today no company can survive in any type of market without continuous development and innovation of its products and services. Teen Suicide EssayConsidering the above alternatives, the more urgent for Gillette is to cut down the prices keeping in view the competition in future and defending its market share. Because people today want good quality products at reasonable prices and what may seem as reasonable today may tend to be looked as costly tomorrow by the customers, in spite of good quality. Consequently people may go for other brands’ Shaving blades and Razors which will decrease Gillette’s market share and profitability in the long run. Implementation Gillette, rather than conducting RD activities in its own laboratories should decentralize them and hire well-reputed agencies/organisations specialising in it because setting up own laboratories and then hiring experts is a very costly affair especially considering the size of Gillette. The direct impact will be in the form of reduced prices of its products and saving millions of dollars also which can be further reinvested or else used in marketing the product. This will automatically expand its market share by creating new customers and maintaining the present ones by increasing the frequency of their buying. Annexure 1 Gillette Razor Innovation Product and Year of Launch |Safety Razor | Gillette Safety Razor invented in 1895 | | |and patented in 1904 | |Razor Marketed Specifically to Women | Milady Decolletee, 1916 | |Razor dispenser 1946 | |Stainless Steel blades | Super Stainless, 1963 | |Double-blade razor | Trac II, 1971 | |Disposable Double Blade Razor | Good News! , 1971 | |Razor with a Pivot Point | Atra, 1977 | Razor with a Lubricating Strip Atra Plus, 1985 |Razor with spring loaded blades | Sensor, 1990 | |Razor withy Microfins | Sensor Excel, 1995 | |Razor with three Blades |Mach3, 1998 | |Manual Razor with battery power | M3 Power, 2004 | |Razor with five Blades |Fusion, 2007 | |Razor with Rear Trim Blades |Fusion, 2007 | (This table has been taken from Gillette Fusion Case study 2008) References Ferrell, C. Hartline, M. (2008). Gillette the Razor wars continue. Marketing Strategy (4ed. , pp. 444-454). OH, Thomson South-Western. Gillette Fusion Case Study (2008). Gillette Fusion Case Study: Developing a US$1 Billion Brand, 1-11. Retrieved from Business Source Complete database. http://search. ebscohost. com Weyrich, C. (1998, February 16). The meaning of innovation. Electronic News (10616624), p. 8. Retrieved from Business Source Complete database. http://search. ebscohost. com