Gillette Case Study

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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 (P&G) 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 (R&D) 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 generated 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...
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