Gillette Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Gillette Company Case Solution

Introduction

This case discusses the creativity problems being faced while introducing a new brand of dry antiperspirant. The brand was introduced in 1978. Currently, creativity is important in consumer products because it increases the brand attractiveness and sales. Currently, the company is getting advertisement services from branding agency called BBDO, after continuous struggle. In 1981, the company’s market share of the company was declined because the advertisements were not effective to attract consumers. The competition in the industry has increased and there are major player in the industry. So it was a high time for company to realize these issues and bring changes in advertisement techniques to attract consumers and develop brand.

Company Background

The Gillette Company has been in business for more than a century. In the late 1960s, the company pursued an acquisition strategy, acquiring the Hydroponic Chemical Company for $1.8 billion. The acquisition failed due to shrinking margins. It did, however, increase the company's market share and revenues. Since then, it has maintained its position as one of the most admired brands in the world. While the first Gillette razor was introduced in 1879, it was a flop. As a result, the company had to change its formula and launch a new one. In the late 1960s, the Gillette razor was facing competition from the double-edged blade. In 1962, Wilkinson Sword Company began exporting stainless steel blades to the United States. The company was able to develop polymer coatings for the razor blades that increased their lifespan and allowed the consumers to shave longer.

Despite its reputation as a world-class brand, Gillette has struggled to keep up with its competitors. Its under performance during the 1990s was largely due to currency-exchange differences. Profits were lowest in its toiletries and stationery businesses, and the company's profits were lowest. During this period, the managing board of Gillette fired CEO Michael Hawley, and hired James M. Kilts, a former Nabisco CEO, to lead the restructuring effort. The company also lost market share in the battery business to cheaper alternatives.

The Gillette Company is a global consumer products marketer. It aims to create competitive advantage in personal care products through innovation and superior design. The company is committed to building shareholder value through profitable growth. And, it's worth remembering that it is a global company. But it has had a turbulent history. It has had a few owners over the years, and has survived a few scandals. Some people may even consider it a success story of its competitors. In the late 1960s, Gillette pursued an acquisition strategy, acquiring the Hydroponic Chemical Compa ny, which manufactured plant food. The acquisition failed, because the company's profit margins dwindled. During this period, the Gillette Company had a negative cash flow and a negative profitability ratio. In the following years, the company is still on its way to achieving its strategic goals. Although its business has suffered, the new management team is still committed to improving the lives of millions of men and women, worldwide.

In 1871, the Gillette family moved to Chicago. In 1871, the family's hardware supply business was destroyed by the Great Fire. At age seventeen, Gillette became a traveling salesman and improved his wares. By 1890, the Gillette Company had four patents. By then, the business had found its niche in the disposable goods market. By this time, the company had more than 3.5 million customers in the United States.

SWOT Analysis

Strengths

The company has its huge market presence, and it is considered as a leader in the industry
It uses aggressive advertisement strategies and has very strong and positive image in the industry
It is well-known for its quality and innovation in the industry

Weaknesses

The company has diversified products but it has a long lifecycle for development.
It has relatively static market growth
The cost of maintaining the brand image and its quality is very high for the company

Opportunities

Social needs of consumers are changing.
E-commerce is an emerging option for the companies to interact with consumers and enhance the consumer services.
New technology is also an opportunity to reduce the cost.

Threats

Counterfeit products.
Substitutes are increasing.
Consumers buying power is increasing.

Further refer to appendix 5

Personal Grooming Industry

Consumers spending depends on their income level, the increasing income level trend. Personal grooming industry consist of major proportion of bath & shower products i.e. 46%, the skin care industry contribution is 16%, Hair care industry consist of 31%, color cosmetic is 6% and Fragrances 1% refer Appendix 2. Despite being highly competitive and consolidated, the USA antiperspirant market has a high presence of global players. Moreover, increasing awareness among consumers regarding hygiene and sanitation is expected to boost the growth of this category. Various factors such as changing lifestyles and consumer behavior patterns are also contributing to the growth of this industry. Detailed research is essential for identifying market opportunities. Here is a market analysis of the USA antiperspirant market.

The deodorant market is segmented into two types of consumer: men and women. Men, on the other hand, are expected to account for a larger share of the market. The global deodorant ingredients market is predicted to grow at a fast pace, especially among Asia Pacific countries. However, the demand for fragrance products in emerging economies is expected to increase in the coming years. The US antiperspirant industry is expected to grow significantly during the forecast period.

The US antiperspirant market is expected to expand at a steady pace through the forecast period. The e-commerce segment is likely to register the fastest growth, with a growth rate of 13.4% over the forecast period(Taylor Nelson Sofres, 2002). Furthermore, consumers prefer to buy their deodorants and perfumes online rather than visiting a retail outlet. Further, most prominent brands offer significant discounts to lure consumers online. While the US is currently the largest market for antiperspirants, its growth is expected to remain relatively stagnant over the next five years.

In recent years, the US antiperspirant market has grown rapidly. Rising income levels and a growing population are two of the main factors boosting the growth in this market. Moreover, rising disposable income and increasing use of antiperspirants are also driving the growth of this industry. The rising demand for antiperspirants is fueled by new and innovative ingredients and the low price of these products. Besides, environmental concerns are likely to pose a major challenge to the US antiperspirant market...............................

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