Gillette is a company popularly recognized for its razors and blades and as a pioneer in wet-shaving technology. Even with stiff competition, it holds a commanding share in the worldwide market. The company has been long known for its innovative products and marketing strategy. The company continues to grow slowly all over the world. With emerging technologies in the razor and blade industry and increasing customer reluctance to pay a higher price, it is definitely a challenge for Gillette to sustain its strategic position in the market.
Since its inception in 1901, Gillette enjoyed a strategic position in razor and blade market with its innovative products with no serious competition until 1962, when Wilkinson Sword introduced its stainless steel blade. After 1962, Sword-Schick became Gillette’s primary competitor. Over the years both Gillette and Schick focused on improvements in razors and each of them introduced their own line of products. When Gillette introduced Mach3 (3-bladed razor), Schick responded with its Quattro (4-bladed razor). Gillette has always been known for its innovation and the peak of its innovation occurred in 2006 with the introduction of the Fusion 5-bladed razor. Schick is yet to respond to Fusion. Now under the ownership of Proctor & Gamble, Gillette faces a saturated US market that fluctuates only when new products are introduced.
Going back to the way Gillette Company was founded; in 1895 King Camp Gillette had a brilliant idea when he was shaving. It was almost impossible at that time to come up with a blade that is hard, thin and disposable. After few unsuccessful attempts, in 1901, Gillette partnered with an MIT graduate William Nickerson in creating a razor with a safe, inexpensive, hard, thin and disposable blade. This innovation gave birth to Gillette Safety Razor Company. Since then, for many years, Gillette enjoyed the dominance in the personal care and grooming industry without a competitor until 1962. Gillette has acquired two other unrelated ventures, the Toni Company and Paper Mate Pen Company, producer of retractable and refillable ballpoint pens. Paper Mate was initially profitable, but sales and revenue declined when a France based company Bic came up with a low priced disposable pen.
In 1962, when English firm Sword introduced its stainless steel blade, Gillette being distracted with its newly acquired ventures, it neglected to see the impact that this small Sword Company could have on its core business of razors and blades and lost substantial portion of its market share. Even though Gillette retained 70 percent of the market share, it did not know how to respond. Gillette got lucked out as Sword lacked the resources necessary to exploit the niche markets it had penetrated and competed with Gillette. Even with all these pressures, under the leadership of Ziegler, Gillette acquired the companies Braun, Dupont, Eve of Roma, Buxton Leather and Welcome Wagon etc., with moderate successes. The successor of Ziegler, Colman Mockler cut costs drastically and invested money in product development and marketing. During Colman’s tenure, Gillette experienced greatest successes with the introduction of Atra disposable razor for men and Daisy razor for women. Gillette was able to capture 75 percent of the market share in razor and blades industry.
After the introduction of Mach3 by Gillette, in 2003 Schick responded with Quattro, world’s first 4 blade razor giving rise to ugly razor wars between the companies. Both companies sued each other during that time. In 2006, Gillette introduced Fusion, world’s first 5 blade razor. Even though Fusion gave a big triumph to Gillette, the hype was going down as the razor is much more expensive than Mach3 and consumer started questioning why one would need 5 blades for shaving. Also, consumer reports concluded there were no additional benefits with having 5 blades and razors were selling more than refills. This became a concern to Gillette as it was earning more on the refills than razors.
Schick yet to respond to Fusion, Gillette was finding way to succeed in the future and win the razor wars effectively. Some of the factors Gillette planning on considering included pricing strategy, targeting global markets and investing in technological advances. Even though Gillette has been dominating the wet-shaving industry for many years now, it is continuing to grow slowly in the worldwide market. Many industry analysts wonder if Gillette has reached its peak in its innovation. Considering the way Gillette has been performing in the recent years, it can be easily said that Gillette has the potential to maintain its dominance in innovation and strategic marketing that can create an appeal to entice customers to purchase its products. As Gillette moves forward, it should consider a good strategy that can put the razor wars behind and have the money spent on technological research be recovered in a reasonable time frame by increasing its share in the global razor market.