GILLETTE COMPANY Gillette Company: Case Analysis



Gillette Company: Case Analysis

Executive Summary

For the purpose of formulating a strategic plan for Gillette, I performed the following analyses: VRIO Analysis, Analysis of Industry, Industry Life Cycle Analysis, Competitive Forces Analysis and SWOT analysis. These analyses are appended at the back of this memo. In light of these analyses, I propose that Gillette should limit the number of razors launched within a specific time. This will allow it to fight back the emerging forces of market competition.

Statement of Problem

In the mid 1990 to early 2000 Gillette was facing a downfall. The Gillette Company, one of the world's leading companies that is known for its main product as the safety razor shaving system, has faced many problems in the last few years of the last decade in the 20th century (Kerin, Hartley & Rudelius, 2009). Many of these problems would be operational problems, for instance the company has always had internal leadership that always focused on estimating high profit margins. What I would emphasize as a strategic problem would be challenge that waits Gillette' Duracell merger ahead. Hence, my statement of problem is as follows:

How will Gillette keep their competitive advantage in regards to all of their different segments? How will they determine a definite positive revenue in each segment?

Analysis

In the appendix of this paper, the SWOT, VRIO, Industry, Porter Five Forces and Market analyses are presented. The internal strengths and weaknesses, and external opportunities and threats are comprehensive stated here.

Internal Strengths and Weaknesses

Both Duracell and Gillette show strong brand recognition, due to the fact that they have an extremely strong research and development department, along with many years of experience in the industry. Both Gillette and Duracell have a wide product range with many different products to meet different needs. They are a considered an “XXX” in the industry because they are consistently developing new products and their market growth is increasingly growing along with the market share (King, 1978). Both companies have threatened the profit growth of new companies because they continue to develop innovative, market leading products, which meet the exceeding needs of consumers.

With increasing globalization, Gillette has a strong global presence and is a market leader in all aspects of its operations. With the physically powerful innovations of Gillette they are able to create the most useful and consumer demanded razors. Gillette controlled 77.2% of the world razor blade refill market while controlling 52.4% of the market share in disposable razors.

Duracell has a very strong brand recognition and loyalty from years of producing products that meet the needs and expectations of consumers. With the smart business plans of Duracell they have aligned themselves with Gillette, which gives them more recognition in the market and a more trustworthy business background (Kotler, 2009).

With the joining of Gillette and Duracell, this brought on a potential issue for both companies. This posed the possible friction between current employees of both ...