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Gillette: How much is too much? Emily Warren Trenton Harris Raul Romero Ali Kocan Brittany Griffith Jake Ashfor

! The "ersonal hy#iene in ustry that Gillette is o"eratin# in woul $e characteri%e as an oli#o"oly& Base on the information at han ' this "articular in ustry contains a hi#h le(el of com"etition& This com"etition affects Gillette on many ifferent le(els) howe(er' they o ha(e some a (anta#es o(er their com"etitors& Gillette intro uce "ro ucts such as the electric ra%or an multi*$la e ra%ors on time' which hel"e to allow the firm to minimi%e the threat of su$stitution& The in ustry Gillette is com"etin# in contains a hi#h "resence of "owerful an fierce com"etitors who continuously im"lemente new "ro ucts to the market& These unfa(ora$le circumstances were esi#ne to set hi#h e+it $arriers an ecrease market share&

This threat from com"etitors i not su$stantially im"act Gillette,s key "osition in the in ustry "rimarily $ecause of its "owerful $ran ima#e an loyalty& Gillette was also a$le to weaken the $ar#ainin# "ower of su""liers $y esta$lishin# manufacturin# centers all across the #lo$e to create a win*win situation& Gillette uses "rimarily lar#e retailers such as Wal*-art an Tar#et to istri$ute their "ro ucts to consumers& This use of mass retailin# increase the (olume at which Gillette can sell its "ro ucts' $ut oes #i(e consumers o"tions as to where to o$tain them& Gillette ha se(eral (alue*a in# acti(ities that allowe the com"any to en.oy a com"etiti(e a (anta#e for /uite some time& These acti(ities inclu e ha(in# a technolo#ical lea ershi" strate#y' im"lementin# international strate#ies' an ha(in# stron# $ran loyalty& 0n the early 1122,s' the sha(in# in ustry woul ha(e $een classifie as an emer#in# in ustry an Gillette woul ha(e ha a technolo#ical a (anta#e as well as first mo(er a (anta#e $ecause it was the first in(entor of the safety ra%or an its "atent of the "ro uct woul ha(e "rotecte the com"any from com"etitors& 0n 1123' Gillette $e#an to im"lement an international strate#y $y o"enin# an office in 4on on an a manufacturin# "lant in 5aris& Gillette,s international strate#y was im"ortant for the com"any to #ain access to new customers for "ro ucts as well as

6 e+"an in# manufacturin# ca"a$ilities& The e+"ansion o(erseas #a(e the com"any a new source of re(enue& 7tron# $ran loyalty woul ha(e also $een im"ortant& 8ustomers "ercei(e the $ran as "remium' so the com"any was a$le to comman "remium "rices with relati(ely hi#h "rofit mar#ins& Gillette outsol all of its com"etitors in 1191' an has $een a$le to maintain a si%ea$le market share in the $la e a ra%or se#ments& :ne of Gillette,s #reatest stren#ths ultimately $ecame one of its weaknesses& 0nitially Gillette "ioneere the ra%or in ustry #ainin# the first mo(er a (anta#e an soli ifie that status $y "atentin# their in(ention& They sou#ht cor"orate le(el i(ersification $y mo(in# into a #lo$al market e(entually reachin# 1&! $illion customers in !22 countries $y the year !221& 0n their /uest to e+"an #lo$ally they $e#an seekin# #rowth outsi e of its core $usiness' the ra%or' an mo(e into other "ersonal hy#iene "ro ucts such as sha(in# creams' oral care' an They then further i(ersifie into writin# instruments& 0n their a##ressi(e "ursuit of #rowth' they lost track of their core $usiness creatin# a "ath for com"etitors to come an com"ete a#ainst an o(er i(ersifie Gillette& 8onse/uently' their i(ersification strate#y $ackfire when their "ro uct lines $ecame too ifficult to mana#e& After the rise of the mana#ement issues' efficiency an manufacturin# took a toll an that reflecte on the income statement as Gillette,s sales $e#an to ecrease& Their o(er* i(ersification strate#y also ne#ati(ely affecte their com"any cor"orate culture an they lost their com"etiti(e a (anta#e& 0n or er to re#ain their com"etiti(e a (anta#e Gillette nee s to start $y reor#ani%in# its mana#ement structure& ;tili%in# a multi i(isional structure woul allow each i(ision to focus on the necessary functions an hel" to return the com"any to its historical focus of the sha(in# in ustry& Three main areas in which Gillette nee s to shift its focus woul $e the finance i(ision' the sales i(ision' an research an e(elo"ment& 0n a ition to com"letely

< reor#ani%in# the mana#ement structure Gillette will also nee to a(oi o(er i(ersifyin# a#ain& This means the com"any will nee to focus on the sha(in# in ustry rather than the "ersonal hy#iene in ustry as a whole& While focusin# on the sha(in# in ustry' which is their stren#th' Gillette shoul also utili%e limite i(ersification in the form of a ominant $usiness firm& This

woul allow them to #ain an a (anta#e in the sha(in# in ustry $y still "ro ucin# their ra%ors alon# with the accessories' sha(e #els' after sha(es' an other relate "ro ucts without o(er i(ersifyin# into too many other "ersonal hy#iene areas& With a well*or#ani%e an com"etent mana#ement in "lace an a focus on the area where they ha first mo(er a (anta#e from the start' Gillette will see a sustaine com"etiti(e a (anta#e&