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Harvard Case - Gillette's Launch of Sensor

"Gillette's Launch of Sensor" Harvard business case study is written by Pankaj Ghemawat, Benjamin C. Esty. It deals with the challenges in the field of Strategy. The case study is 15 page(s) long and it was first published on : Sep 12, 1991

At Fern Fort University, we recommend that Gillette continue its aggressive innovation strategy, focusing on developing and launching products that meet evolving consumer needs and preferences. This strategy should be underpinned by a strong focus on product differentiation, marketing, and strategic alliances to maintain a sustainable competitive advantage in the razor industry.

2. Background

The case study focuses on Gillette's launch of the Sensor razor in 1990, a revolutionary product featuring a pivoting head and twin blades. This innovation aimed to address the growing demand for a more comfortable and efficient shaving experience. The case study highlights the challenges and opportunities Gillette faced in launching the Sensor, including competition from other razor manufacturers, the need for significant marketing investment, and the potential for cannibalization of existing product lines.

The main protagonists of the case study are:

  • Gillette: The dominant player in the razor industry, known for its innovation and marketing prowess.
  • The Sensor: The revolutionary new product that aimed to redefine the shaving experience.
  • Competitors: Other razor manufacturers, such as Bic and Wilkinson Sword, who were actively competing in the market.

3. Analysis of the Case Study

To analyze Gillette's situation, we can utilize several frameworks:

  • Porter's Five Forces:
    • Threat of New Entrants: Low, due to high barriers to entry, including brand loyalty, manufacturing costs, and distribution networks.
    • Bargaining Power of Buyers: Moderate, as consumers have a wide range of choices but are generally loyal to brands.
    • Bargaining Power of Suppliers: Low, as Gillette has strong relationships with its suppliers and can negotiate favorable terms.
    • Threat of Substitutes: Moderate, as alternative hair removal methods exist, but razors remain the dominant choice.
    • Competitive Rivalry: High, as the razor industry is characterized by intense competition among established players.
  • SWOT Analysis:
    • Strengths: Strong brand recognition, extensive distribution network, strong R&D capabilities, and a loyal customer base.
    • Weaknesses: High dependence on a single product category, potential for cannibalization of existing products, and high marketing costs.
    • Opportunities: Expanding into new markets, developing innovative products, and leveraging technology to enhance the customer experience.
    • Threats: Competition from new entrants, changing consumer preferences, and economic downturns.
  • Value Chain Analysis: Gillette's value chain includes activities such as R&D, manufacturing, marketing, distribution, and customer service. The launch of the Sensor required significant investment in all these areas, particularly in R&D and marketing.
  • Business Model Innovation: Gillette's launch of the Sensor represents a significant business model innovation, as it introduced a new product category with a distinct value proposition and pricing strategy. This innovation aimed to capture a larger share of the market and create new revenue streams.

4. Recommendations

Gillette should continue its strategy of disruptive innovation by focusing on the following:

  1. Product Development:
    • Continuous Innovation: Gillette should invest heavily in R&D to develop innovative products that meet evolving consumer needs, such as razors with improved blade technology, ergonomic designs, and integrated skincare features.
    • Product Differentiation: Gillette should focus on creating unique product features and benefits that differentiate its razors from competitors. This could include developing new blade designs, introducing advanced shaving gels, and incorporating smart technology for personalized shaving experiences.
  2. Marketing Strategy:
    • Targeted Marketing: Gillette should leverage market segmentation to target specific consumer groups with tailored marketing campaigns. This can be achieved through digital transformation by utilizing social media, internet advertising, and influencer marketing to reach specific demographics.
    • Brand Building: Gillette should continue to invest in brand building activities to maintain its strong brand image and loyalty. This can involve sponsoring sporting events, partnering with celebrities, and creating engaging content that resonates with consumers.
  3. Strategic Alliances:
    • Partnerships: Gillette should explore strategic alliances with companies in related industries, such as skincare, personal care, and technology. This can help expand its product portfolio, access new markets, and leverage complementary technologies.
    • Vertical Integration: Gillette should consider vertical integration by acquiring or partnering with companies involved in the supply chain, such as blade manufacturers or packaging suppliers. This can help control costs, improve product quality, and ensure a consistent supply of raw materials.

5. Basis of Recommendations

These recommendations align with Gillette's core competencies in innovation, marketing, and brand management. They also address the needs of external customers by providing them with innovative and high-quality products, while catering to internal clients by driving growth and profitability.

The recommendations are based on the following assumptions:

  • Consumers continue to value innovative and high-quality razors.
  • Gillette can maintain its strong brand image and customer loyalty.
  • The razor industry will continue to evolve and require ongoing innovation.

6. Conclusion

Gillette's launch of the Sensor was a successful example of disruptive innovation that significantly impacted the razor industry. By continuing its focus on innovation, marketing, and strategic alliances, Gillette can maintain its leadership position and achieve sustainable growth.

7. Discussion

Other alternatives not selected include:

  • Cost Leadership: Focusing on cost reduction and price competition, which could lead to lower margins and reduced brand value.
  • Market Penetration: Focusing solely on existing products and markets, which could limit growth potential and make Gillette vulnerable to competition.

The key risks associated with the recommended strategy include:

  • Competition: New entrants or existing competitors might introduce innovative products that challenge Gillette's dominance.
  • Consumer Preferences: Changing consumer preferences could lead to a decline in demand for traditional razors.
  • Technological Advancements: New technologies could emerge that disrupt the razor industry, such as laser hair removal or advanced bio-engineered hair removal solutions.

8. Next Steps

Gillette should implement the following steps to execute the recommended strategy:

  • Develop a comprehensive product roadmap: This roadmap should outline the development and launch of new products over the next few years, focusing on innovation, differentiation, and customer needs.
  • Invest in marketing and digital transformation: Gillette should allocate significant resources to marketing campaigns that target specific consumer segments and leverage digital channels to reach a wider audience.
  • Explore strategic alliances and partnerships: Gillette should actively seek opportunities to collaborate with companies in related industries to expand its product portfolio and access new markets.
  • Monitor industry trends and competitor activities: Gillette should continuously monitor industry trends and competitor activities to identify emerging opportunities and potential threats.

By taking these steps, Gillette can ensure its continued success in the razor industry and remain a leader in innovation and customer satisfaction.

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Case Description

The introduction of the Sensor Shaving System, one of the biggest product launches ever, forced Gillette to reevaluate its strategy in its shaving and non-shaving business. It had to decide whether to go ahead with the launch and if so, at what scale. Permits analysis of the margins and volumes the Sensor is likely to achieve, and issues of sustainability and flexibility.

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