Introduction The problem that Gillette and Mr. Bingham faces is after splitting off of the Toiletries Division, the Gillette Safety Razor Division needs to find new sources of revenue because razors are maturing and will not sustain high margins for the company. SRD found many potential opportunities within the cassette tape market and it could be a profitable avenue for Gillette and solve Mr. Bingham’s needs. To see if the cassette market will be a good fit for Gillette, some analysis on the market and internal resources must be performed. After analyzing SRD’s findings a better view of the market environment will be presented and recommendations can be made.

Analysis

SRD should be considering blank cassettes for 4 main reasons. The first reason is the obvious lack of an industry leader. Due to the recent emergence of this market no company has successfully positioned itself at the top, and as a result the existing market is full of low quality cassettes, which do not fit machines, have poor internal cassette construction in order to reduce costs, and inferior quality tape resulting in poor recordings. Secondly, Gillette is strongest in mass-distributed packaged goods, the high volume production of plastic products, and has an already established sales force within the largest selling retailers of blank cassettes including 500,000 discount stores, department stores, and drug stores. The strengths that Gillette has established just so happen to be what firms in the cassette market struggle with most. This has sparked the consideration for entering the cassette market. The third reason is that there was a 60% increase in sales over 1969 and the consultants forecasted that blank cassette sales would grow at an average annual rate of 30% through the 1970s. If costs are kept low and time to break even is short than profit can be earned during the growing