GILLETTE

Gillette had a great stock par during 1990s which attracts investors like Warren Buffet.
Companies operating income comes from core products: razor blades and toiletries where
non-operating income comes from non-core products: toothbrushes, hair dryers, coffee
makers and batteries. They have customers from 200 countries and also listed in Fortune’s
most admirable companies. There share value increased thrice in 1995-1998.

Even they also facing problem, profit margin and asset turnover were started decreasing
because of high sales of non-core products than core-products which lead to decrease in profit
of 12 percent. This trend continued in 2000 which lead to drop in share value by 50 percent.
New CEO Micheal C. Hawley reduced the bloated receivables and inventory positions which
help to meet the actual turnover ratios. They focused on razor and blades and set the profits
back.

In this case study, we observed that non-core products are sold largely comparted to core-
products. This driven the revenue of 70 billion dollars to half of it’s in 2-3 years and settle on
same platform with colgate-palmolive. To retain previous position they cut of the non-core
products and focus on core products and help to increase in sales and profit.