THE CASE METHOD: Socit BIC
Define the problem Formulate alternative courses of action Evaluate the alternatives Choose and recommend a course of action
Analyze Environment
Economic Social Political Legal Technological OPPORTUNITIES THREATS Trends in disposables Hygenic Private Globalization Technological advances
Analyze Industry
Competitors New Entrants Substitutes Strong Suppliers Strong Buyers BIC vs the industry BIC within the industry
Analyze Industry: Competitors
Price Advertising Sales Promotion New Products Service Strategies STRENGTHS WEAKNESSES Gillette
Double price Gillette Daisy Without guard Small ad budget Not aggressive Innovative Good brand equity Market leader
Analyze Industry: Competitors
Price Advertising Sales Promotion New Products Service Strategies STRENGTHS WEAKNESSES American Safety Razor Higher price Flicker Without guard Small ad budget Not aggressive Not well known
Analyze Industry: New Entrants
Financial Requirements Brand Equity Economies of Scale Not likely because Financial requirements BIC & Gillette names BIC & Gillettes size
Analyze Industry: Substitutes
Brand Industry Form Generic Strong brand substitutes Strong industry substitutes No generic substitutes
Analyze Industry: Suppliers & Buyers
Strong Suppliers: Forward Integration Strong Buyers: Backward Integration No strong suppliers (no apparent sign of integration) Some strong buyers (intermediaries) (no apparent sign of integration)
Analyze Company
Quantitative Qualitative
Management Philosophy
Finances Organization Culture STRENGTHS WEAKNESSES
Socit BIC Marcel Bich Growing fast Extending line Worldwide Strong finances Dedicated business philosophy
Socit BIC Story: Facts & Figures
Founded in France by Marcel Bich
Salesman (office supplies)
Branded after his name Still CEO; in Paris Growing (1976 vs 1975)
Non US: sales 40%, earnings 100% US: sales - 50% of non US; earnings - 80% of non US; growing at 45%
Socit BIC Story: Facts & Figures
Sales in 90 countries Plants in 4 countries
Mass producer/seller
produces 9 million pens/day (33% of world market) sells 800 thousand lighters/day (20% market share) 50% market share in pantyhose in France
Socit BIC Story: Business Philosophy
Cheaply made Briefly used Disposable 1953 1976: Pen, lighters, pantyhose, razor
Socit BIC Story: Business Philosophy
No interest in inventing Strong capacity to improve Strong capacity to make things worldwide
Extreme interest in quality
Never promote unless equal to #1 in market
Finance until beating competition in quality
Even disposables cannot sell unless their quality is high Marcel Bich
BIC Lady Shaver: Facts
To be launched in April 1978
BIC Pen US invests $11 million promoting shavers Wet shave market: $350 million Gillette dominates BIC has 5%
BIC aims 10%
BIC Lady Shaver: Facts
BIC Lady: 2 for $0.49 ($0.245 each)
Gillette Daisy: 2 for $1.19 ($0.595 each)
American Safety Razor Flicker: 5 for $1.69 ($0.338 each)
Work on brand name - BIC Lady! (Silky Touch!) First ladys product at a good price
High safety features
BIC Lady Shaver: Promotion
Magazine ads No TV to protect BIC Shaver Will emphasize use
Close-up pictures
Office Legs, Beach Legs, Bedroom Legs Very large budget Couponing, sampling, premiums Shampoo and roll-on premiums not relevant
Analyze Marketing Strategy:
Facts, Opinions & Assumptions
Fit with Corporate Strategy Competitive Advantage Segments & Targets Total Marketing Mix BIC Lady Shaver Perfect with corporate strategy Advantages:
Guard Price Aggressiveness
Consistent mix
Analyze Problems & Their Core Elements
DONT REPEAT THE CASE STORY! Case Material Synthesis Generalizations Implications BIC story & shaver story Justification of strategy Mix decisions Suggestions
Formulate & Evaluate Alternative Courses of Action
List Alternatives Evaluate Each Alternative Choose the Best Alternative Detail the Implementation BIC Lady Shaver
Formulate & Evaluate Alternative Courses of Action: List Alternatives
Generate 3-7 alternatives. Dont enter Enter: penetrate Enter: skim
Alternative Strategies
Innovation Skim creaming Prestige pricing Broad product line
Formulate & Evaluate Alternative Courses of Action: Evaluate Alternatives
Costs
Time Money Resources Opportunity Cost
Product is ready R&D incurred Will consume promotion budget Can spend more on other products
Formulate & Evaluate Alternative Courses of Action: Evaluate Alternatives
Benefits
Sales Profit Customer Satisfaction Goodwill Good sales potential Good profits potential Will ride on current success Will help existing success Favorable customer satisfaction Favorable goodwill
Formulate & Evaluate Alternative Courses of Action: Choose Alternative
Making Decisions Under Uncertainity Enter: penetrate Assume: competition skimming Developing Assumptions Assume: competition not aggressive Assume: lighter competition in ladys market
Strategy:
Marketing vs Corporate Entry through emulation (imitation with development) Penetration pricing Saturated markets Heavy advertising
Mass consumption Disposability Elastic demand Universal usage Convenience Ease of loss
Basic Strategy!
How Important Is A Basic Strategy for Success? Socit BICs reason for being. Main success factor. All enterprises need a basic strategy. Basic strategy is subject to review.
