The Case Analysis for Clean Edge Razo Essay

2) How is the nondisposable razor market segmented? What are the crucial elements of consumer behavior for nondisposable razors?

1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life-cycle challenges for Paramount’s current products as well as Clean Edge?

3. What does your strategic group map of this industry look like? How attractively is Netflix positioned on the map? Why?

Examining the consumer behavior for nondisposable razors, we can observe that consumers are focusing on the premium segment. Also, they are becoming more sophisticated and expecting new technologies to smooth the shaving process. Focusing on that, Paramount should invest in the premium products category. Even though that would create cannibalism for the “pro-products” which is already loosing market.

3. What environmental forces have created challenges for Mattel as it continues expansion into global markets? Which markets have created opportunities?

Q2: What do you believe are the primary competitive challenges facing Netflix today? What capabilities and core competencies does the firm require to successfully deal with those challenges?

The case points out that Gillette’s competitors were quick to copy new products. The launch of Sensor will be a breakthrough in the market and will introduce a new product category the “cartridge laser cut razor with superior quality”. Therefore it is essential for Gillette to protect their new product by pursuing patent enforcement, as they already have. This way will Gillette retain its competitive advantage and will re-introduce and position itself as a technology leader.

Colgate-Palmolive Company (CP) launched a new toothbrush, Colgate Precision, to the market. But having developed for three years, CP was fiercely competing with other companies in the market. In order to have the power to fight in the highly competitive market with substantial product activity, Colgate-Palmolive Co. was in a problem of considering the how to position its new product--Precision, and to define the market strategy in terms of positioning, branding, and communication strategy. It provided some options with details to the reader, hence, for such purpose, this case would be a decision case, finding the optimum to segment the new product to the target and how it should be marketed.

3. Describe the competitive strategies used by each of Williams-Sonoma’s competitors. Which of these are most effective?

Synopsis: Gillette has long been known for innovation in both product development and marketing strategy. In the highly competitive, but mature, razor and blade market, Gillette holds a commanding worldwide market share. The peak of its innovation occurred in 2006 with the introduction of the Fusion 5-bladed razor. Today, innovation in razors and blades is thwarted by a lack of new technology and increasing consumer reluctance to pay for the “latest and greatest” in shaving technology. Gillette must decide how to put the razor wars behind them and maintain or increase its share of the global razor market.

* Customers: Male consumer products have been trending upward in the last decade. The customer segments are broken up into three areas; social/emotional, involved razor users, and uninvolved or maintenance users. Social/emotional are responsible for 39% of Nondisposable razors, Involved is for 28%, and maintenance users account for 33%. In 2009 consumers razors and replacement cartridges at a higher rate than ever before.

2. Which of the two firms (Viacom or QVC) would make a better fit with Paramount?

For this reason, Gillette has always been trying to innovate in the market with new products. But they did not want their product to be bought just because they are a novelty but because it was perceived by the customer as a good quality product and have a staying power and product loyalty. This can be illustrated by the launch of the “Fusion” product by

Present sales of the Paramount in razor industry come to $170 million and Paramount Pro contributes to this significantly. By introducing Clean Edge in the mainstream sector a 60% fall in the sales of Pro is predicted and the revenue generated by it will come down to $68 million. But it is expected that clean edge will generate a revenue of $147.8 million* and in turn Paramount can achieve a net sales of $215.8 million. Marketing cost is approximated to $42 million and Paramount will be able to generate a profit of $173.8 million. If they had positioned it in the niche segment they would lose only 35% sales of Pro. But at the same time, due to the constraints in the market clean edge can raise sales of only $52.8 million and the net sales will total to $163.3 million. Here the marketing cost is approximated to $15 million and the revenue generated will amount to $148.3 million. Thus the figures clearly indicate that concentrating the mainstream would be more beneficial. Also Paramount will be able to achieve a profit margin of $3.09 per unit even after providing distributors a margin of $3.36 per unit.

Gillette is seeking means to retain dominance in market share they have lead for the last century. Along with sustaining market share Gillette has continued focus on expanding worldwide into less saturated markets. In this analysis multiple alternatives will be explored in order to make a recommendation on steps that would favor Gillette’s organization in meeting their aspirations.