Gillette Case Study

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(refer to appendix 01.Image.)

- ANALYSIS OF INTERNAL ENVIRONMENT:

- Current Goals and Objective:

Mr. David S. Taylor, Chairman of the Board, Annual Report (2016) addressed that “We increased investments in innovation, advertising and sales coverage to enhance our long-term prospects for faster, sustainable sales growth.”

The company is aimed to provide branded and superior quality of goods through the improved technology and innovations. The Company is using various strong offline and online channels to meet the customer’s needs. The Annual Report (2016) of the Company refers: “We utilize our superior marketing and online presence to win with customers at the ‘Zero moment of truth’ – when they are searching for information about a brand or product. The Report further adds that: We must also win the ‘Second moment of truth’ – when the customer uses the product, evaluate how well it met his or her expectations and decides whether it was a good value.” (Page-01).

The Company is vigilant for its products, branding, promotion and utilizing various vehicles for the awareness of the brand to increase the sales volume of its products. The Annual Report (2016) of the Company quotes: “We support our products with advertising, promotions and other marketing vehicles to build awareness and trial of our brands and products in conjunction with an extensive sales force. We believe this combination provides the most efficient method of marketing for these types of products. Product quality, performance, value and packaging are also important differentiating factors.” (page-02).

- Available Resources (Strength and weaknesses):

- The most of the raw and packing material being procured by the company from the single source suppliers;

- The Company is itself producing certain raw material mainly the Chemicals to facilitate its manufacturing process;

- The prices of the material and commodity are subject to fluctuation;

- Vast range of products, prepared to cater the customers needs;

- The Company claims that all major trademarks, patents and license pertaining to the business of the Company are registered;

- The Company has a global presence and around 67% of the total sales of the Company for the year 2016 were generated in North America and the Europe, North America alone contributing 66% sales out of these two big markets and 44% of the total sales of the Company;

- The Company is vigilant for its products, branding, promotion and utilizing various vehicles for the awareness of the brand to increase the sales volume of its products;

- The company has adopted and pursuing the go-to-market strategy and implementing the same on the local level fields;

- The Company has a leading position in the market and the industry and as per a study the Company holds around 65% share of the total market;

- The Company believes in innovation and continuous improvement, therefore spending a considerable amount in R&D activities, which has been reported around $1.9 billion in year 2016;

- The company has adopted various methods to improve its sales like packaging improvement, conducting brand awareness programs, product trail programs, product sampling programs, building advertising, improvement in existing products, innovations R&D programs; (refer to the appendix. 02.core strengths)

- The company has identified approx. 19% downfall in the number of employees in the past 5 years. In year 2016, 105,000 employees were employed by the company in comparing to the 129,000 employees in the year 2011. Please refer to appendix (03. Table);[1]

- The Company’s International sales are down by 12.75% in the year 2016 ($38.3 billions) as comparing to year 2015 ($43.9 billions);

- The company has a consistent record of increasing dividend payout;

- Ever claiming best products on a higher side prices throwing the company in disputes.

(refer to appendix 05. SWOT Analysis)

- ANALYSIS OF EXTERNAL ENVIRONMENT:

- Customers environment (Current and potential):

Men’s grooming products are the primary segment for the Company. Its renowned brand Gillette is synonym to the Razors, blades and men’s shaving. The company owns approx. 65% of the Blades and Razors market share. The company is facing competition from Schick, BIC and Wilkinson sword, holding 15%, 11% and 2% of the market share respectively.

The product has sustainable growth in the existing market and the company should also explore the other market places where the sales ratio is considerably quite less. The company has continued to capture and increase its market share in the United states, however the company is losing its edge in the international business. The company’s international sales have been declined by 20% in the past two years. The Company should majorly focus on Greater China and the IMEA countries (IMEA stands for India, Middle East and the Africa). India and the China are the two world’s largest populated countries, the company should explore, focus and attempt to capture market in these two countries. (refer to appendix 04. Market share)

- Other external environmental factors (Opportunities and Threats):

- Highly competitive global market. Many large and small companies including the well-known global brands and retailers’ private label brands are in competition with the Company;

- The Company has observed and studied that federal, state and local environmental laws and regulations are fairly consistent, therefore no material change is expected in the coming years;

- As the Company is in the International market, there are higher possibilities of foreign currency fluctuation, currency exchange and the local territorial localities;

- Online retail razor ventures;

- Uncertain global economic conditions may adversely affect the product demand, which may cause the financial hardship on the company;

- Any sudden disruption in the credit market may affect the rating of the Company;

- Rise in the prices