Gillette Case Study

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Gillette Introduction

Swot is a powerful tool that assists organisations to evaluate their internal strengths, weaknesses, opportunities and threats. This assists in understanding and creating strategy that assists the organisation to grow. PESTLE is a tool that is used to evaluate and understand the external factors that affect the organisations and can have an intense effect on the organisation. Gillette is an organisation that deals in personal care products and safety razors along with other shaving supplies. There has been seen that the organisation is facing intense competition from the competitions. The SWOT and PESTLE have been done in the study to understand the internal and external factors impacting Gillette.

Table Regarding Gillette

Company Name

Gillette

Type of industry

Grooming and shaving

Headquarters

Boston, Massachusetts

Sales/Revenue

8 billion GBP

Area served

Worldwide

Number of stores

200 countries

Competition

Harry’s, 800Razors, Schick, Grooming Lounge, Edgewell Personal Care

USP

Medium priced grooming and shaving products

Target Group

People that have medium economic power

Products

Grooming and shaving products for men

Website

www.gillette.co.uk

Gillette Swot

Strengths

Weaknesses

  • Strong brand image
  • Interconnection with Procter & Gamble
  • Greater margins of operation (Schmidlin, 2014)
  • Strong dealer networks
  • Continuous innovation measures
  • Skilled workforce and training programs (Reeves and Mendis, 2015)
  • Use of approach that seeks to solve the problems
  • Good performance in new markets where it has expanded
  • Lack of choice of products than the competitors
  • High prices of the products as compared to the competitors (gillette.co.uk, 2019)
  • Low investment in research and development of the products
  • Workforce retention is lower as compared to other organisations (independent.co.uk, 2019)
  • Weak in product demand foreseeing
  • Unable to tackle challenges created by new entrants (independent.co.uk, 2019)

Opportunities

Threats

  • Increased opportunity as the people have increased consciousness related to their appearance
  • Growing needs of the middle class people (campaignlive.co.uk, 2019)
  • Growing expenditure power due to increase in disposable income
  • Incorporation of stable free cash flow
  •  Increasing loyalty of the consumers related to the innovation created by the brand
  • Adoption of new technology (Gutierrez et al. 2015 )
  • Increasing its periphery to newer market segments
  • Changing patterns of spending and expenditure by the consumers
  • Increased competition from new entrants (Stobart, 2016)
  • Increase in the pay scale
  • Increased strengths of local distributors
  • Rising price of raw materials (Park et al. 2015)

Table 1: Swot of Gillette

(Source: Created by the author)

Gillette Analysis

As per the case study of Gillette, the brand image of Gillette has been powerful in the market which leads to increased trust of customers. As per the case study of Gillette, the margins at which Gillette operates is high which proves beneficial for its stakeholders and consumers. The distribution and supply chain network of Gillette is optimised and efficient that leads to meeting the demands of the market easily. Gillette has been seen to be engaged in continuous innovation to meet the demands of the customers.

As per the case study of Gillette, the choices of shaving and grooming products provided to the customers are lesser than its competitors which lead the customers to shift to other competitive brands. The pricing of the products of Gillette is high for middle class which leads to a shift to different organisations. The organisation has been unable to foresee its products demands, which leads to losses to the organisation. As per the case study of Gillette, the challenges created by the new entrants are not being properly faced by Gillette, which has led to a decrease in the profitability and customer base of the organisation.

The middle class is seen to spend more on grooming which creates opportunities for Gillette. The increased expenditure of the people has also created opportunities for Gillette to create new products that would appeal to this class. Gillette can try to increase its market by expanding its periphery to unexplored areas. The increased pay scale of workers has led to greater expenditure by organisation. The new entrants are posing great threats to Gillette which needs to be handled for increasing their market share.

Gillette Pestel

Political

  • Brexit issue (market-inspector.co.uk, 2019)
  • Free trade agreements between nations
  • Instability in politics

Economical

  • Increase in VAT rate by 5% after Brexit (mazars.co.uk, 2019)
  • Decreased spending power of the people
  • Decrease in currency value by 20% (ec.europa.eu, 2019)
  • Decreasing GDP rates

Social

  • Increased demand for online shopping than retail shopping
  • Customer loyalty towards Gillette brand (Conklin et al. 2014)
  • Increased consciousness towards grooming (Mate-Sanchez-Val and Harris, 2014)

Technological

  • Increased use of online shopping by the consumers
  • Incorporation of technology in several industrial operations (Tarhini et al. 2015)
  • Government support to incorporate technology

Legal

  • Data Protection Act
  • Intellectual Property and copyright laws (Carr-Hill and Stern, 2014)
  • Laws for the protection of the consumers from unreasonable pricing (legislation.gov.uk, 2011)

Environmental

  • Changing climate may lead some products to be useless
  • Decrease in waste produced by the organisation (environmentlaw.org.uk, 2019)
  • Increasing demand for incorporation of renewable energy (ukela.org, 2018)

Table 2: Pestel of Gillette

(Source: Created by the author)

Gillette Analysis

The Brexit issue would lead to decreasing the way people spend and also impact Gillette as trading tax would be imposed in the country. The free trade agreement between nations leads to benefitting Gillette through provision of easy supply to different nations. As per the case study of Gillette, the destabilisation of political area due to Brexit issue would lead to strict rules and regulations for the organisations that would lead to creation of issues for Gillette. The Brexit is expected to increase VAT by 5%, which would lead to increasing the prices of products of Gillette that would lead to decreasing profitability for Gillette. The expenditure capacity of the people would also decrease as currency value is expected to decrease by 20%. The GDP rates would also decrease as a result of decreased currency value and increased taxes which would lead to lower profitability and customer base by the organisation.

As per the case study of Gillette, it has been active in online market for promotion and selling its products, this leads to benefitting the organisation as people are more inclined towards online marketing. The customer loyalty towards Gillette proves fruitful for the organisation. The consciousness towards grooming by people is increasing which leads to increased opportunity for Gillette. As per the case study of Gillette, it has been successful in following the legal rules and regulations, which positively creates an image for Gillette. As per the case study of Gillette, the organisation needs to optimise its waste management procedure and the increased demand for renewable energy may lead to hitting the financial part of Gillette.

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References

CampaignUK (2018). Gillette UK “The best men” by Grey London. [online] Available at: https://www.campaignlive.co.uk/article/gillette-uk-the-best-men-grey-london/1490853 [Accessed on 12 July, 2019].

Carr-Hill, R.A. and Stern, N.H., (2014). Crime, the police and criminal statistics: an analysis of official statistics for England and Wales using econometric methods. Eds 4. Cambridge. Academic Press.

Conklin, A.I., Forouhi, N.G., Surtees, P., Khaw, K.T., Wareham, N.J. and Monsivais, P., (2014). Social relationships and healthful dietary behaviour: evidence from over-50s in the EPIC cohort, UK. Social science & medicine, 100, pp.167-175.

Environmentlaw.org.uk. (2017). Law and Your Environment - Home. [online] Available at: http://www.environmentlaw.org.uk/ [Accessed on 20 July, 2019].

European Commission. (2018). Withdrawal of the United Kingdom from the EU. [online] Available at: https://ec.europa.eu/taxation_customs/uk_withdrawal_en [Accessed on 18 July, 2019].

Gillette UK. (2019) [online]. Available at: https://www.gillette.co.uk/ [Accessed on 08 July, 2019].

Gutierrez, A., Boukrami, E. and Lumsden, R., (2015). Technological, organisational and environmental factors influencing managers’ decision to adopt cloud computing in the UK. Journal of Enterprise Information Management, 28(6), pp.788-807.

Independent.co.uk (2019). Piers Morgan and men’s rights activists upset at “emasculating” new Gillette advert [online] 15 Jan. Available at: https://www.independent.co.uk/life-style/piers-morgan-gillette-advert-reaction-gmb-mens-rights-activists-toxic-masculinity-metoo-a8728756.html [Accessed on 10 July, 2019].

Legislation.gov.uk. (2011) [online] Available at: http://www.legislation.gov.uk/ [Accessed on 22 July, 2019].

Market-inspector.co.uk. (2016). Impact of Brexit on Businesses in the UK. [online] Available at: https://www.market-inspector.co.uk/blog/2016/10/impact-of-brexit-on-businesses-in-the-uk [Accessed on 06 July, 2019].

Mate-Sanchez-Val, M. and Harris, R., (2014). Differential empirical innovation factors for Spain and the UK. Research Policy, 43(2), pp.451-463.

Mazars.co.uk (2018). Brexit – The tax implications - Mazars - United Kingdom. [online] Available at: https://www.mazars.co.uk/Home/News-Events/Latest-news/Tax-News/Brexit-The-tax-implications [Accessed on 20 July, 2019].

Park I, Jeong Y, Yoon B, Mortara L., (2015). Exploring potential R&D collaboration partners through patent analysis based on bibliographic coupling and latent semantic analysis. Technology Analysis & Strategic Management, 27(7), pp.759-811.

Reeves, P. and Mendis, D., (2015). The current status and impact of 3D printing within the industrial sector: an analysis of six case studies. Eds 6. Abingdon. Routledge.

Schmidlin, N., (2014). The art of company valuation and financial statement analysis: a value investor's guide with real-life case studies. Eds 2. Hoboken. John Wiley & Sons.

Stobart, P. ed., (2016). Brand power. Eds 8. Berlin. Springer.

Tarhini, A., Hone, K. and Liu, X., (2015). A cross‐cultural examination of the impact of social, organisational and individual factors on educational technology acceptance between B ritish and L ebanese university students. British Journal of Educational Technology, 46(4), pp.739-755.

Ukela.org. (2018). Background to Environmental Law. [online] Available at: https://www.ukela.org/environmental-law-history [Accessed on 26 July, 2019].

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