King C Gillette established The Gillette Company (Gillette) in 1901 in Boston.

In 1903,
Gillette produced its first razor. A year later, it obtained a patent on the razor. Gillette showed its
strong commitment to international expansion by establishing a sales office in London and a
manufacturing site in Paris, as early as in 1905.

During the 1920s and 1930s, Gillette continued its efforts to expand market share both at home
and abroad. It also expanded its product line, introducing the Brushless Shaving Cream in 1936
and the Kumpakt electric razor in 1938.

World War I came as a boon to Gillette, which supplied 3.5 million safety razors and 36 million
blades to the US armed forces.

During World War II in 1942, the War Production Board ordered Gillette to dedicate its entire razor
production and most of the blade production to the defense forces. Gillette found itself in a comfortable
situation where demand outstripped supply. By the end of the war, servicemen had been issued 12.5
million razors and more than 1.5 billion blades.

In 1948, Gillette acquired Toni Company which supplied personal grooming kits for women. In 1950,
Gillette began television advertising in a big way. The company introduced a foamy shaving cream in
1953. Two years later, Gillette moved into another new business, acquiring the Papermate Pen Company.

In 1967, Gillette again diversified, acquiring Braun AG, a German manufacturer of small
electrical appliances.

Gillette made an important move in 1984, when it acquired Oral B laboratories, a leading
toothbrush manufacturer in the US. Gillette used its global reach to put Oral B in markets where
entry was difficult on its own.
Gillette continued with its acquisition moves, buying Waterman, a leading manufacturer of
premium writing instruments, based in France. By the mid-1980s, Gillette was operating five
major businesses - blades and razors, toiletries and cosmetics, stationery products, Braun
appliances and Oral-B dental products.

In 1993, Gillette strengthened its position in the writing instruments business by acquiring the
Parker Pen Company (Parker). In 1996, Gillette diversified yet again, acquiring Duracell
International, the world's leading manufacturer of alkaline batteries.
In the late 1990s, Gillettes profitability has been under pressure. Due to the Asian currency
crisis, dollar profits in many overseas markets have shrunk considerably. The companys heavy
investment of around $1 billion in the triple blade Mach-3 has also had its impact. During 1998
and 1999, Gillette missed most of its quarterly sales and profit targets.

Currently, Gillette consists of three operating groups: Global Business Management, Commercial
Operations (Western Hemisphere) and Commercial Operations (Eastern Hemisphere). The
Global Business Management Group has worldwide responsibility for R&D, manufacturing and
strategic marketing of all products. Commercial operations (Western Hemisphere) looks after
trade marketing and sales for all the products in North America and South America.
Commercial Operations (Eastern Hemisphere) has similar responsibilities for other countries in
the world.

GILLETTE: THE PRODUCT BASKET

Alkaline Batteries Duracell

Blades & Razors Gillette, Mach 3, Sensor, Atra, Trac, Custom plus, Good
News, Agility.

Oral Care Oral-B

Small appliances Braun

Stationery Products Parker, Paper Mate, Watermen, Liquid Paper, Dryline

Toiletries Gillette, Right Guard, Soft & Dri,

Dry Idea, Satin Care

MICHAEL.E. PORTERS 5 FORCE MODEL

1. Introduction:
The model of the Five Competitive Forces was developed by Michael E. Porter in his book Competitive
Strategy: Techniques for Analyzing Industries and Competitors in 1980. Since that time it has become
an important tool for analyzing an organizations industry structure in strategic processes. Porters model
is based on the insight that a corporate strategy should meet the opportunities and threats in the
organizations external environment. Especially, competitive strategy should base on and understanding
of industry structures and the way they change.

Porter has identified five competitive forces that shape every industry and every market. These forces
determine the intensity of competition and hence the profitability and attractiveness of an industry. The
objective of corporate strategy should be to modify these competitive forces in a way that improves the
position of the organization. Porters model supports analysis of the driving forces in an industry. Based
on the information derived from the Five Forces Analysis, management can decide how to influence or
to exploit particular characteristics of their industry.

2. The Five Competitive Forces:

The Five Competitive Forces are typically described as follows:

1) The threat of entry by new competitors.

2) The intensity of rivalry among existing competitors.

3) Pressure from substitute products.

4) The bargaining power of buyers.

5) The bargaining power of suppliers

2.1 Bargaining Power of Suppliers

The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or
services.

Supplier bargaining power is likely to be high when:

The market is dominated by a few large suppliers rather than a fragmented source of
supply,
There are no substitutes for the particular input,
The suppliers customers are fragmented, so their bargaining power is low,
The switching costs from one supplier to another are high,
There is the possibility of the supplier integrating forwards in order to obtain higher
prices and margins. This threat is especially high when
The buying industry has a higher profitability than the supplying industry,
Forward integration provides economies of scale for the supplier,
The buying industry hinders the supplying industry in their development (e.g. reluctance
to accept new releases of products),
The buying industry has low barriers to entry.

In such situations, the buying industry often faces a high pressure on margins from their suppliers. The
relationship to powerful suppliers can potentially reduce strategic options for the organization.
THE GILLETTE CASE:

It is indeed enjoying greater supplier power due to its sole presence in the organized, premium
technology shaving razors market. Also there are no close substitutes to their razors. The only substitutes
in terms of the product perspective are in fact very poor on the technology and quality fronts. For
example: there are several twin blade razors in the market but none would match the superior
technology of a sensor excel, or the triple blade offering by Super-Max 3 is in no comparison with the
Mach 3. So in reality there are no potential threats.

2.2 Bargaining Power of Customers:

Similarly, the bargaining power of customers determines how much customers can impose pressure on
margins and volumes.

Customers bargaining power is likely to be high when

They buy large volumes, there is a concentration of buyers,

The supplying industry comprises a large number of small operators
The supplying industry operates with high fixed costs,
The product is undifferentiated and can be replaces by substitutes,
Switching to an alternative product is relatively simple and is not related to
high costs.
Customers have low margins and are price-sensitive,
Customers could produce the product themselves,
The product is not of strategic importance for the customer,
The customer knows about the production costs of the product
There is the possibility for the customer integrating backwards.

THE GILLETTE CASE:

The buyers as a result are not very powerful as there are no close substitutes, they buy in small numbers,
switching to an alternate product is not easy (as one cartridge does not fit another razor, and also
because once an investment is made on a premium Gillette razor, it is difficult for the consumer to leave
it as such and move on to another razor), and customers of Mach 3 razors (executive class which
comprises a sufficient market) are not price sensitive. However, the only thing the customer can do is to
revert to lower versions by compromising on technology or switch over to barber shaving.
2.3 Threat of New Entrants:
The competition in an industry will be the higher; the easier it is for other companies to enter this
industry. In such a situation, new entrants could change major determinants of the market environment
(e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction
and adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to entry. These are
typically

Economies of scale (minimum size requirements for profitable operations),

High initial investments and fixed costs,
Cost advantages of existing players due to experience curve effects of operation with
fully depreciated assets,
Brand loyalty of customers
Protected intellectual property like patents, licenses etc,
Scarcity of important resources, e.g. qualified expert staff
Access to raw materials is controlled by existing players,
Distribution channels are controlled by existing players,
Existing players have close customer relations, e.g. from long-term service contracts,
High switching costs for customers
Legislation and government action

THE GILLETTE CASE:

The shaving razor market is completely dominated by Gillette. Any new entrants should very carefully
launch themselves because they would be directly pitting against a monopolist kind of market giant. Also
the barriers to entry are not many except minimum size requirements for economies of scale, high initial
investments and above all the retaliation by Gillette which could be anything.

2.4 Threat of Substitutes:

A threat from substitutes exists if there are alternative products with lower prices of better performance
parameters for the same purpose. They could potentially attract a significant proportion of market
volume and hence reduce the potential sales volume for existing players. This category also relates to
complementary products.

Similarly to the threat of new entrants, the treat of substitutes is determined by factors like
 Brand loyalty of customers,
Close customer relationships,
Switching costs for customers,
The relative price for performance of substitutes,
Current trends.

THE GILLETTE CASE:

As of date there are no close substitutes to any of the Gillette razors. The only close substitute
could be the American Safety Razor. But then again that would depend on the marketing
strategies of the company.

2.5 Competitive Rivalry between Existing Players:

This force describes the intensity of competition between existing players (companies) in an industry.
High competitive pressure results in pressure on prices, margins, and hence, on profitability for every
single company in the industry.

Competition between existing players is likely to be high when

There are many players of about the same size,

Players have similar strategies
There is not much differentiation between players and their products, hence,
there is much price competition
Low market growth rates (growth of a particular company is possible only at the
expense of a competitor),
Barriers for exit are high (e.g. expensive and highly specialized equipment).

THE GILLETTE CASE:

There is virtually no competition in most of the segments except in the flat blades segment, low income
segment, traditional double edged users (laggards), and technology-illiterates.

Product Mix
Product mix, also known as product assortment, refers to the total number of product lines that a
company offers to its customers. For example, a small company may sell multiple lines of
products. Sometimes, these product lines are fairly similar, such as dish washing liquid and bar
soap, which are used for cleaning and use similar technologies. Other times, the product lines are
vastly different, such as diapers and razors.

The Product mix is the total variety of products a firm sells. Some firms will sell just one
product, whilst others will sell a large number of different products. For example Samsung's
product mix includes mobile phones, netbooks, tablets, televisions, fridges, microwaves, printers
and memory cards. Firms should select their product mix carefully as they will need to generate
a profit from each of the products in the product mix.
Razors

Fusion Power Razor

When you have sensitive skin, a lot of things can really
irritate your face. Shaving shouldnt be one of them. Gillette
Fusion Power razor features Gillettes advanced
technology for outstanding shaving performance, even on
sensitive skin. The Gillette Fusion Power razor gives you
the shaving performance you need to look your very best.

The battery-powered Gillette Fusion Power razor adds to

the features of the Gillette Fusion Manual razor with
PowerGlide blades and soothing Micropulses that allow
the shaver to gently glide across your face with less
friction and less shaving irritation* An on-board Microchip
regulates the power to ensure consistency shave after
shave. Its a great razor for sensitive skin.

Fusion Gamer Razor

Play the game on your own terms

When its time to step up, you need to put your best face
forward. So why not get powerful shaving technology with the
Gillette Fusion Gamer razor. That way, youre guaranteed to
get your game face on in complete comfort and style.

The Gillette Fusion Gamer razor gives you the home

advantage by combining Gillettes advanced shaving
technology with sophisticated performance. You can take
control of the 5-blade technology and gentle contouring
Microfins standard on the Gillette Fusion Gamer razor.

When it comes to a comfortable shave, it will be smooth sailing all the way.

Fusion Razor
Advanced technology for proven shaving performance.

When you need to put your best face forward, why not get
the powerful shaving technology of Gillettes Fusion Razor?
The Gillette Fusion Razor combines Gillettes advanced
shaving technology with sophisticated performance to deliver
an exceptionally close and comfortable shave.

You can take advantage of the 5-blade technology and gentle

contouring Microfins standard on the Gillette Fusion Razor.

Gillette MACH3 Sensitive Mens Razor

Clean shave, with less feel of irritation even on sensitive skin.*

The Gillette MACH3 Sensitive Razors Pressure Control System

includes three features to ensure a clean shave with less feel of
irritationeven on sensitive skin.* The spring-mounted blades
automatically adjust to different skin variations and levels of
pressure. The Front Pivot System manages the blade feel. Its the
shaving technology you want in mens razors for a truly smooth,
soothing shave.

Gillette Mach 3 Razor

Comfortable, Even on Day 30

Get a close comfortable shave even on Day 30 with Gillette Mach 3

razor. This is because it has 3 Blades with Diamond like coating that
stay sharp longer to give you a great shave even on Day 30

PowerGlide Smoothness
Gillettes 3 Blade Shaving Surface Technology with Anti-Friction razor
blades gently glides across your face with incredible shaving ease and
outstanding facial hair removal. With a shave this smooth, comfort is a
slam-dunk.

Gillette Mach3 Turbo Mens Razor

3 Anti-friction blades, 10 Microfins and a lubricating strip
deliver a Zero Redness Shave

Advanced Anti-Friction Coating for guaranteed Zero

Redness*

Lubrication Strip ensures the Mach3 Turbo glides across

your skin, shave after shave.

50% less blade pressure **

Gillette Mach3 Turbo Razor allowed millions of men to

shave without irritation, itches or rashes of an ordinary
disposable razor***. Treated with an Advanced
AntiFriction Coating, the MACH3 Turbo removes each
hair with less irritation and soft, protective Microfins gently smooth down the skin for an even,
effortless shave. Get Mach3 Turbo today and enjoy a smooth, close shave that lasts up to 30
days.

Shave Gel and Foam

Fusion HydraGel Sensitive

Shave Gel
The soft touch for sensitive skin.

Shaving can be tough on sensitive skin,

unless you have the comforting protection of
Gillette Fusion Sensitive Hydra Gel. Its deep,
rich formula of hydrating emollients and
lubricants softens facial hair and protects
even the most sensitive skin while you shave.
So a close shave is also a comfortable shave.
Designed to partner with the Gillette Fusion
shaving systems.
Fusion HydraGel Pure and
Sensitive Shave Gel
The natural choice for those with more sensitive skin
with no added dyes or fragrances

Gillette Fusion Pure and Sensitive HydraGel shave gel

gives your skin an overall smooth look. Its unique
combination of hydrating emollients and lubricants
softens facial hair, protecting your sensitive skin while
you shave. Plus, it doesnt contain any dyes or
perfumes, which can irritate your skin. Make shaving a
pure pleasure with Gillette shave gel. Designed to partner with the Gillette Fusion shaving
systems.

Fusion HydraGel Moisturizing Shave

Gel
For smoother glide and softer skin.

Gillette Fusion Ultra Protection HydraGel, with

glycerine and lubrajel, helps give a moisturized shave.
Three premium lubricants actually soften your hair to
give you a shave thats extremely smooth. Give it a try,
and lose the dry. Designed to partner with the Gillette
Fusion shaving systems

Series Conditioning Shave Gel

For a shave that hydrates.

Lock in moisture and lock into a great shaving

experience. Gillette Series Conditioning Shave Gel
with glycerinss and gentle emollients and lubricants give
you the one-two combination of moisture-rich
conditioning and a comfortable shave.
Classic Sensitive Skin Shave Foam
Shave foam for sensitive skin.

Gillette Foamy Sensitive Skin Shave Foam. Simple. Honest. Classic. The lightly fragranced for
Sensitive Skin lather spreads easily and rinses clean for that Foamy shave men have enjoyed for
generations.

Skin Care

Series Sensitive Skin Gel

The aftershave that refreshes and refuels.

Give your skin an in Fusion of cool with Gillette

Series after Shave Sensitive Skin Gel. Its the
perfectly crisp and clean way to refuel your sensitive
skin after a great shave. Get ready to get cool, calm
and collected.

Gillette Series safter Shave Sensitive Skin Gel is a

non-greasy formulation made specifically for sensitive
skin. Its gently-acting combination of moisturizers and
skin calmers work to give your freshly shaved face a little bit a soothing TLC, while the deep
penetrating cooling agents leave your skin feeling revitalized. Just rub it in after your shave or
anytime you need a shot of long-lasting cool.