Case Study Gillette Strategic Management
Case study discussion – Gillette loses face
This is a deceptively simple-looking case. The lazy student will simply adopt the critical line on the company’s strategy being fed to him or her by Jeremy Kahn, the author of the article. In fact, things are by no means so clear-cut, students need to do some careful analysis, particularly in the area of Gillette’s corporate-level strategy, before this becomes plain. They have to be prepared to think hard about the success factors in the different businesses – if they simply pick out the points proffered by the case study, then they will not derive the full benefit from the case.
1. What were the most important strategic issues confronting Gillette in November 1999?
If we go through the analytical process proposed in the chapter, the following points emerge.
At corporate level, the (1) share price has fallen 48% to below its 1996 level. Although prices may overshoot once negative market sentiment takes hold, in this case the company has contributed to that sentiment by a (2) persistent failure to achieve its own sales targets. This indicates either some fairly deep-seated problems in motivating staff to meet those targets, or a lack of ability to set realistic targets, which may in turn indicate that the firm is out of touch with its market place.(3) The problems with credit periods and inventories are further evidence of management problems.
There is not a great deal about the environment in the case study. The economic downturn in Asia has affected Gillette but since the downturn appears to be temporary, there is no clear case for the company to take measure to respond to it. The tone of the case implies that there are no other environmental issues that might have affected demand for Gillette’s products.
Within individual businesses Gillette is: • (1)Market leader in razors and blades (40% profit margins), alkaline batteries, toothbrushes. In these businesses, the company is positioned as a differentiator with
This is a deceptively simple-looking case. The lazy student will simply adopt the critical line on the company’s strategy being fed to him or her by Jeremy Kahn, the author of the article. In fact, things are by no means so clear-cut, students need to do some careful analysis, particularly in the area of Gillette’s corporate-level strategy, before this becomes plain. They have to be prepared to think hard about the success factors in the different businesses – if they simply pick out the points proffered by the case study, then they will not derive the full benefit from the case.
1. What were the most important strategic issues confronting Gillette in November 1999?
If we go through the analytical process proposed in the chapter, the following points emerge.
At corporate level, the (1) share price has fallen 48% to below its 1996 level. Although prices may overshoot once negative market sentiment takes hold, in this case the company has contributed to that sentiment by a (2) persistent failure to achieve its own sales targets. This indicates either some fairly deep-seated problems in motivating staff to meet those targets, or a lack of ability to set realistic targets, which may in turn indicate that the firm is out of touch with its market place.(3) The problems with credit periods and inventories are further evidence of management problems.
There is not a great deal about the environment in the case study. The economic downturn in Asia has affected Gillette but since the downturn appears to be temporary, there is no clear case for the company to take measure to respond to it. The tone of the case implies that there are no other environmental issues that might have affected demand for Gillette’s products.
Within individual businesses Gillette is: • (1)Market leader in razors and blades (40% profit margins), alkaline batteries, toothbrushes. In these businesses, the company is positioned as a differentiator with