Protagonist: Ralph Bingham – Vice President, new business development, Gillette Safety Razor Division (SRD) Problem: Ralph needs to achieve company targets for earnings growth for his division by developing a new business product. Ralph has commissioned an extensive investigation into the blank cassette tape market and he views this market as poised for substantial growth and opportunity over the long-term range of ten to fifteen years. Ralph feels that his division is well positioned to enter the market through utilization of its many core strengths.
The current blank tape market segment has many weaknesses, such as, lack of widespread distribution, lack of media coverage, poor product display and packaging, and lack of a true market leader. These weaknesses in the blank cassette tape market are all areas where Gillette has developed strong core competencies in their Safety Razor Division. The blank cassette tape market is segmented into three distinct product markets: Professional quality, Standard Quality, and Budget Quality and within those segments there are recording lengths of 30, 60, 90 and 120 minute cassette tapes. Bingham’s consultants have focused on the 60-minute cassette tape market in particular.
Gillette Safety Razor Division Decisions
Gillette has four product options: 1.) do not enter market. 2.) enter professional tape market 3.) enter standard tape market. 4.) enter the budget tape market. The professional quality market offers the greatest margin on products, but it is also the smallest segment in the market. The professional segment will also have the most competition as more established tape makers enter the market. As such, the fierce competition may potentially saturate the market and decrease the margins on these tapes and make it less appealing in the long run. Alternatively, standard tape market has moderate margins, but is a highly growing segment and is ready for a market...