Case questionsAnalyse the BIC case study and discuss the following questions: 1. What strategy did BIC use to succeed in the ball point pen market? 2. How did the strategy change with porous point pens and disposable lighters? 3. Which of the new product options should BIC pursue? Why/why not? 4. On the basis of your analysis in Questions 1 to 3, what do you think are the strategic strengths and weaknesses of BIC? 5. What strategies would you recommend to Baron Bich for the future? |
BIC is a world leader in the stationery, disposable lighter and shaver market. It sells its products in over 160 countries through office supply companies, supermarkets, stationery stores and wholesalers.
The worldwide sales of BIC Corporation are in excess of $2.0 billion p.a. BIC employs around 10,000 staff worldwide.
Product| Global market share| Daily sales (units)|
Stationery | 8%| 21 million (including over 16 million ball point pens)| Shavers| 20%| 10 million|
Lighters| 22%| 4.5 million|
BIC was established in the 1945 by the Baron Marcel Bich and is still controlled by the Bich family. The Baron was a production manager for a French ink manufacturer. Wanting to go out on his own, he bought a small, empty factory outside Paris. He had little capital, no machinery, no customers and no products. He and a friend, Edouard Buffard, starting making fountain pens and mechanical pencils.
The Baron soon recognised the enormous potential of ball point pens, so he started producing them in 1950. He called the pens “BIC” – a shortened, easy to remember version of his own name.
By 1956 he had set up operations in Brazil. He also bought the Waterman Pen Company in the USA, a fountain pen manufacturer, converted the facilities and set about developing a strategy to become the world's leading ball point pen manufacturer.
Developing the market for ball point pens was costly and time consuming, and BIC made no profit until 1964. Today, over 16 million BIC pens are sold every day.
The Baron runs the business personally, although he has been grappling for some time with the problem of a successor. The Baron Marcel Bich
The Baron Marcel Bich, an Italian born French industrialist, has always been recognised as a stubborn and opinionated personality. He is also a flamboyant man who has lavished millions of dollars in pursuit of the Americas Cup. He competed in 1970, 1974, 1977 and 1980. Until 1980 he had not won a single race out of 18 starts. This time he beat Lionheart of England in the round robin, but lost to Australia in the semi finals. The Baron has a reputation as one of France’s most successful but secretive entrepreneurs. The BIC philosphy
The aim of BIC is to make life simpler for consumers all over the world with quality products at affordable prices.
Overall, the philosophy of BIC is to grow whatever market it enters and to become the dominant competitor. As long as the product can be mass produced and mass marketed at a popular price, BIC believes a business opportunity exists.
The company operates using a global strategy. That is, large manufacturing plants that generate economies of scale are set up in dispersed countries. There is open competition between manufacturing plants to supply BIC operations around the world. Today BIC manufactures its products in 27 countries.
The BIC global strategy is accomplished by entering a country on a 50/50 basis with a local partner, the local partner having non-voting shares. This reduces the cost of setting up, allows entry into countries more rapidly, and leaves control in the hands of BIC management.
BIC believes in a management team that is totally familiar with all aspects of company operations and practices managing by walking about (MBWA). There is also a strong focus on quality and efficiency in all BIC operations. BIC AUSTRALIA...