MINI CASE: Shick vs.

Gillette
Gillette is a well-known brand recognized around the world for its shaving products. Its main
rival in America is Schick which trades in the UK as Wilkinson Sword, a company it acquired
some years ago. The Chairman of Gillette is Warren Buffett one of the world's richest men and
known as the ‘Sage of Omaha' for his astute shareholdings in a wide range of businesses through
his investment company Berkshire Hathaway. Coca-Cola is one company in which he has a
substantial holding Buffettt championed the appointment of a new CEO in 2001 - Jim Kitts who
had built his reputation with Kraft Foods/Nabisco. Between 1996 and 2001.
Gillette had experienced five years of stagnating revenues and profits. Kitts was able to restore
growth and profitability almost immediately. He strengthened the company's working capital by
better debt collection and tighter inventory controls. He championed the launch of the Mach
razor which utilized three blades carefully positioned to produce a truly close shave. Gillette also
introduced a range of battery-operated toothbrushes. He appeared to be able to reinvigorate
brands and exert financial control at the same time. He was a proactive marketer, whereas
Gillette had become somewhat reactive with an 'if you build it, they will come approach to new
product marketing.
The company had become sleepy. In part, this resulted from Gillette enjoying a reputation for
superior technology with its products and being able to charge relatively high prices. It had also
acquired Duracell manufacturer of high-quality premium-price batteries. However, superior-
quality razors and superior-quality batteries require a different approach to marketing. Customers
are clearly willing to pay premium prices for superior quality razors, they are more resistant and
price-conscious when it comes to replacement batteries.
In 2002 the Mach 3 generated revenues in excess of $2 billion Schick (which also markets
Energizer batteries) launched a competitive product in 2003. Its Quattro razor uses four blades.
Both razors position the blades sequentially closer to the skin such that each one gives a closer
shave. Gillette has claimed its patent has been infringed because it is about positioning principles
and not about the actual number of blades. Schick has countered by querying why Gillette then
opted for three and not four blades.

1. How important is technological innovation as a competitive platform?

There are numerous strategies for gaining a competitive advantage. However, not every
organization can sustain it, thus it would be a disadvantage to the firm. A technological
innovation is a new or improved product or technique that has significantly improved
technological features. Implemented technological product innovations are new products
(product innovations) or processes in the application (process innovations) that have been
brought to market. Gillette opts the product differentiation as their advantage through
product innovation - Mach 3 which utilizes three blades carefully positioned to produce a
truly close shave, and process innovation by launching battery-operated toothbrushes in
the market. This resulted in a bounce back of Gillette after 5-year stagnating revenues
 and incomes. With technological innovation, the company can form a sustainable
competitive advantage that can help cement its place as a segment or industry leader. Jim
Kitts had a so-called "first-mover advantage." He looks deeper into investment
opportunities for tangible advantages. Moving forward, information will be the key to
success. Gathering, analyzing, and implementing insights from information developed by
cutting-edge technological solutions will help companies operating in even the most
analog industries forge a path to success.

2. Can and should any company ever rely on patent protection as a competitive weapon?

No. A patent safeguards an invention by allowing the patent holder the exclusive right to
manufacture, sell, or use the invention. Inventions enable many firms to succeed by
creating new or improved processes or products that provide a competitive advantage in
the marketplace. Patent both disclose and protect information which allows them to play
numerous roles in innovation. But in the case above, Gillette sued Schick, claiming that
the company's Quattro four-bladed men's razor infringed on its patent progressive blade
geometry technology for multi-bladed razors, which is used in products such as the
Mach3 and Venus. Thus, any company should never fully rely on patent protection as a
competitive weapon. Competitors will still be able to benefit from your invention by
replicating it and also, making it their basis for new their new products.

3. If you were involved in product development at either of these businesses, what do you
think the next development might be?

The idea to launch a brand-new product can be the start of an immensely difficult
process. Developing new products is the foundation of any growing company. Businesses
without product innovation and development tend to stagnate, then decline. Thus, to
maintain its competitiveness, the company engages in continuous product research and
development. In order to address the product needs of its customers, the company has
also invested in a wide range of items. If I were involved in product development, the
next development would be an electric and chargeable razor for both men and women.

4. Will it continue to be incremental or might something more revolutionary be feasible?

Incremental innovations would be less costly and risky. However, such a strategy would
not be consistent with Gillette's brand image as a technology innovator, which had
enabled it to dominate the wet shave industry. For the company to deliver more
consistent performance and maintain its competitive advantage in the industry, Gillette
should seek to discover a means to level out the ups and downs as much as possible.
Thus, instead of being incremental, Gillette needs to explore new markets while creating
new technology and products in order to expand further and maintain its industry
leadership.
Schick http://www.schickquattro.com Gillette http://www.gillette.com SOURCE: Strategic
Management: Awareness and Change 5 (John Thompson with Frank Martin)

References
Upcounsel. (2020, June 23). Upcounsel. Retrieved from Upcounsel:
https://www.upcounsel.com/intellectual-property-protection