Essay on Gillette Indonesia - Case Study

Essay on Gillette Indonesia - Case Study

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Gillette Indonesia - Case Study
1. Current Situation and Trends
1.1. Market
1.1.1 Definition, Size and Growth
Broad - Personal Grooming Products
Narrow - Shavers, including double-edged blades, disposables, and “systems” blades
Gillette expects to sell 108m units of double-edged blades, 10m units of disposables and
18m units of systems blades. Gillette’s market share is expected to be 50% in 1996, so
there is an existing market of double-edged blades of 116m.
The >$10k income bracket has grown by 30%, the $5k-$10k bracket by 15% and the $2k-
$5k bracket by 3%. The only bracket to reduce in size is the <$2k bracket, decreasing by
15%. Also the incidence of shaving is increasing, and lacks far behind that of Hong Kong.
This evidence suggests that the shaving market is in the early stages of growth on the
Product Life Cycle.
1.1.2 Structure
Rivalry - Low
Gillette’s market share is expected to reach 50% in 1996. Having such a strong monopoly
results in a high concentration ratio, signifying low rivalry.
Threat of Substitutes - High, moving to Med/High
There is a strong threat of substitutes coming from the use of wet or dry knives, however
as Indonesia becomes more westernised this is expected to decrease.
Buyer Power - Low
As Gillette has such a large portion of the market, buyer power is comparably low.
Supplier Power - Medium/High
As a result of financial constraints from buyers, Gillette is limited in what they are able to
charge, moderating their power within the market.
Threat of New Entrants - High
The market being...


... middle of paper ...


... elements of the
marketing mix remain the same.
However, doing so leaves Gillette Indonesia vulnerable to the threats outlined in the above
SWOT analysis.
6. Recommended Strategy
As “5.1 Cut Costs & Reduce Prices” results in both increased profits and increased market
share, it is the alternative that is suggested.
It should be noted that the success of this alternative is dependant on the assumption that
the lack of growth experienced by Gillette was primarily caused by the increase in price,
and not be another factor. Fortunately the alternative suggested is not drastic, so its
benchmarking and control can be performed in an environment with reduced risk.
This alternative also involves the reduction of costs, the details of which have not been
outlined in this report, but will need to be executed to ensure the increased profitability of
the alternative.

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