Gillette Company is the leading American manufacturer of razor and razor blades, commanding over 60 percent of this market (Vandeventer, March 9, 1994, p. 1010). The company also participates in other grooming areas, such as toiletries, hair care and Oral-B oral hygiene products. Gillette also is active in small household appliances through the Braun brand, and in stationery products through Paper Mate, Liquid Paper and Waterman. Gillette is an international company incorporated in Delaware. At issue today is how the company can continue to expand its market share in current markets, and how it can continue to maintain a high growth profile that has seen it successfully through the 1980s. This research examines these questions and offers recommendations based on the company's current position.
Gillette was founded in 1901 and has carefully protected and nurtured its core businesses since that time. The company has expanded into businesses where there is room for growth and where new products can be introduced successfully. In the shaving field, which remains one of Gillette's core businesses, the company successfully introduced disposable razors, but recognized that disposable razors were contributing to the commoditization of the industry. As products are transformed into commodities, brand names have increasingly smaller effects on the buying decision of consumers, with the result that companies such as Gillette often lose market share to generic products. In 1983, Gillette stopped advertising its disposable razors and put its marketing money into shaving systems, the business which built the razor segment of the company's business.
As a result of Gillette's strategy, shaving systems began to gain share in Europe and the growth rate of all disposables began to slow. With a shaving system, consumers purchase the more expensive razor, and more expensive cartridges to replace the blade of the razor. This was a high-risk...