GILLETTE: WHY INNOVATION MIGHT NOT BE ENOUGH CASE STUDY
Executive Summary
Being one of the identified firms that produce the anticipated forms of a razor blade in the market, the performance and longevity of Gillette in the market are evaluated by players in the market relying on the concept that the reception by consumers and aspect of modern technology will impact the factor of innovation in the company.
This document outlines the essence of product leadership and their duties. Product leadership and their roles, in this case, will affect the stand and success of the company. Product leadership deals with product innovation, how the price of the product will be set, how the firm will blend or integrate with the market, how it will deal with the competition from the competitors, segmentation, the marketing aspect especially through sports along with the global marketing. Product leadership will also need to determine the critical focus of the product.
This paper further focuses on how product leadership analyzes the question of why innovation may not be sufficient since they are several aspects that deter that and their relation to the general performance of the company. Gillette’s company vision is to create total brand value by innovating to satisfy consumers and have customer leadership than their competitors while their mission is establishing shareholder value through constant profitable increase.
Situational Analysis- Analysis of Macro Environment
The macro-environment analysis of Gillette is explained as the PESTLE analysis of Gillette. PESTLE review of a company studies the brand on its business strategies. Hence, it investigates the numerous external aspects such as political, economic, social, technological, legal and environmental.
Most companies rely on political stability for exceptional performance and success. Gillette as a global company thrives in many markets and economies hence the need to observe a separate set of laws by these states. These laws entail trade policies formulated. Trade policies impact the price setting and sales of the razors. These trade policies link to the intellectual property that may impact its operations. Gillette’s patents on innovations launched regards the imports and export laws where Gillette operates. Disregarding the policies may thwart the activities of the company because of the suits that will be filed. Economic factors of a state suggest the longevity of a company in that nation. Gillette as a global company has focused its operations in emerging markets. With the need to satisfy its consumers by providing modern and quality products, Gillette examines the recent state of a certain region and engages in its exercises at the right time. Gillette identifies facets such as the new market conditions and purchasing capacity of the consumers to create a business strategy to infiltrate the market.
Gillette as a company produces razors and blades for different purposes according to the consumer. The reasons for purchasing Gillette products creates some sense of confidence and self-love. Hence increasing the social factor of the society. With the form of products Gillette produces, there is a need to embrace advanced technology. Since there is immense competition, Gillette created the laser hair removal technology which was integrated less in the market because consumers chose the competitors’ products. The basis for the shift by consumers was that the product was costly and not attainable in the market. Therefore, Gillette has since adapted modern technology to give goods and services that will meet the needs of the consumer.
The legal factor of the macro environment analysis is similar to the political aspect in this case. Since Gillette is a global market, it operates in states that have distinct laws and policies. These laws and policies should be adhered to. Every company needs to maintain the essence of a good environment. Therefore, Gillette has considered the need to adapt plastic razors that are recyclable than metal razors to maintain a clean environment.
Analysis of Consumers
With the 54% global market share, Gillette has targeted the male gender as their consumers. Most males need to confidence and grooming for their social standing hence perform shaving of beards and mustaches. Since Gillette’s products are assumed to be costly, the market targeted includes the middle and upper class (Forbes, 2019). The recent products are embraced by the upper class, the middle premium products are used by the middle and upper class while the old products are used by the lower class since they are less expensive.
Internal Environment and SWOT Analysis
The internal environment of Gillette involves the strategies outlined by the firm. The firm has cultivated the need to launch razors and blades that fit the needs of the customers and are above the products competitors produce. The recent statistical analysis depicts that the maintained the sales at 50% of the sales and company’s revenue by 70% (Forbes, 2019). The crucial factors of the strategies regarded by technology. Embracing technology is advantageous since it places the company above its competitors. Some of Gillette’s competitors include Mach 3, Sensor Excel and many more. Besides, the firm invested in the department of research and development. From 2000 to 2010, the research and development docket concluded that the brand was applied by teenagers (Gillette, 2013). Therefore the firm launched products that suit the interests of teenagers.
At this time, Gillette also launched products that aligned with the razors and blades. These entail shaving cream, deodorants, different cosmetics for men as well as the hair products. This helped improve its market share (Gillette, 2013). Also, Gillette launched the Duracell product to give advanced services to its consumers. Therefore, this increased its market share.
SWOT analysis
Gillette has adapted separate measures for Strength, Weakness, opportunities, and threats. These measures were considered after Gillette created a plan to integrate the market. The strengths illustrated by Gillette Company include raising the number of razors and blades, applying competitive advertising techniques, several innovations and expected quality of products along with the wide market share (Gillette, 2013). The weakness aspects include Gillette setting immense prices for its products. Most consumers prefer products from Gillette’s competitors because of the price aspect. Other weaknesses include the gradual initiations of products and the increase of market share. Gillette focuses on men’s demands than women and also it sells its products in immense supermarkets and shops rather than the retail shops.
The opportunities for Gillette products are also separate since most consumers select Gillette’s goods frequently. The firm has also identified that men need trailblazing products because of modern technology (Gillette, 2013). The threats that Gillette encounter includes the number of emerging companies in the industry, the pricing levels differ, economic depression, enhanced purchasing power and the ever-advancing technology. In conclusion, the aspect of innovation and creating quality products help increase the sales of the products. However, setting high prices deters most users to their products.
Evaluation of Current Strategies and Problem Statement
Identifying the challenge affecting Gillette’s performance in the market is crucial to formulate the necessary strategies for the success of the company. Gillette’s character of innovation has created the dominance element in the market. Nevertheless, it has presented an immense challenge since there has been an assorted success. The new products have censured the old ones (Gillette, 2013). The products have been advancing from Trac II to Atra to Sensor to Mach 3 and the 2016 launch of fusion 5- blazed razor.
When creating a new product, Gillette tends to set immense prices for the recent one hence censuring its product. The marketing team has also mentioned the need for modern technology and increased hesitation by the users. Making their products costly caged the previous products hence lessening their market share (Gillette, 2013). Thus, their objectives have been advancing the existing products, enlarging parallel products and enhancing their goods while applying their marketing strategy.
Recently, Gillette has focused on its marketing strategies. The market strategies deployed have since impacted the current market share Gillette represents in the industry. The marketing program formulated pertains to male-dominated interests. These include sponsoring the preservation of stadiums and sports activities such as the NFL New England Patriots, the MSL cup, the World cup, and the NFL championships. The target was the Latin and American audience since most men in these nations cherish soccer and football (Gillette, 2013). Events such as the World cup and MSL cup attract the audience globally thus gaining the consumers from other states. Gillette has extended the naming rights for the stadium to 2031.
Another marketing strategy includes social media factors. In the beginning, Gillette neglected the need for social media like Facebook and Twitter as a marketing platform. However, in 2011, they became vital and increased their likes on Facebook to 1.3 million and numerous followers on other social media platforms. Other strategies identified include the global expansion element. Through its research and development section, Gillette has reviewed the need to satisfy the need for its users. An example includes the research done in India, it was identified that men in India shave only a few times a week while using running water. While penetrating the market using Gillette guard, Indian men embraced the product hence increasing the sales of the products as well as other Gillette goods. Gillette also observed the pricing strategy. Their demand for setting immense prices is driven by the need to cover the production costs. While using the research and development docket, Gillette has offset prices to some of the recent and old products to increase the sales from the current 50% state.
Alternative Strategies Proposition, Evaluation, and Justification.
The current strategies applied by Gillette are exceptional. However, alternative strategies should be applied too. Some of the current strategies that should be continued include the creation of complementary products and using sports events and exercise as the marketing strategy to reach the global market. The alternative strategies entail the company embracing fully the research and development department rather than investing in launching modern products. The research and development section has proved effective in identifying the demands of the users hence increasing the sales of both new and old products. Besides, the firm has concentrated on imminent technological transformation. Therefore, the organization must regard consumer inclination and regaining its research investment.
Other substitute strategies include developing products for women. This would increase their market share. Women have been neglected since the market lacks shaving razors and blades for their needs. The marketing platforms would include female sports activities and superstars. While considering culture, the firm can infiltrate their products in economies where western culture thrives since women embrace shaving in these economies. Also, the firm should consider men with sensitive skin since most men disregard the products to avoid rashes.
While implementing their strategies, Gillette should consider the culture or customs, religion and the western impact of different nations. Statistics reveal that globally, 15% of men worldwide do not shave because of sensitive skin and irritation, 7% because of their religion while 3% because of their culture (Gillette, 2019). Another proposition as mentioned above includes the need to determine women who have embraced the western culture of shaving hence integrating their market.
Gillette should also focus on their marketing strategies. The marketing strategies should advance to other areas where both men and women may be reached. Gillette mentions that they have identified the need to use new and upbeat songs to extend their products to youth and teenagers. Through the research and development docket, the firm identified that most youths and teenagers use their products. The consistent aspect of wet-shaving blades and razors have made the firm assertive. Analysts depict that their main competitor Schick has failed to innovate the fusion 5 razor blade hence making Gillette the most dominant firm in providing the razor products as well as the complementary products. Nevertheless, they should regard their pricing method along with the continuous use of the research and development department.
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