Term Paper on "Gillette Company's Global Strategy"

Term Paper 31 pages (8412 words) Sources: 1+

[EXCERPT] . . . .

GILLETTE COMPANY'S GLOBAL STRATEGY

Today, the Gillette Co. (the "company" or "Gillette") is an $8 billion manufacturer of male and female grooming products, alkaline batteries and manual and power toothbrushes, and markets these products globally. The company has five business segments: Blades and Razors, Duracell, Oral Care, Braun and Personal Care. The Blades and Razors segment is the primary business in terms of share of sales and profit, representing 42% of total company net sales and 68% of total operating segment profit from operations in 2003. As of December 31, 2003, Gillette had manufacturing operations at 32 facilities in 14 countries, and the company's products are sold in over 200 countries and territories. The company's largest customer is Wal-Mart Stores, Inc. together with its affiliates; these companies accounted for 13% of Gillette's net sales in 2003. The company has achieved these levels of sales and growth through a consistently applied pattern of intelligent business decisions and a philosophy of enlightened human resource management policies. To determine how and where Gillette has succeeded in this regard, this paper provides an overview and brief history of the company, followed by a review of its various business units, an examination of its strategies for growth, and an analysis of how effective these strategies have been in terms of the company's historic performance. A summary of the research is provided in the conclusion.

Abstract

CHAPTER 1:

INTRODUCTION

Reason for choice of topic

Academic objectives of dissertation

Outline of chapters

CHAPTER 2: LITERATURE REVIEW

Rationale for literature reviewed

Critical review of literature relating to academic objectives

CHAPTER 3: METHODOLOGY

Scope of the research

Basic methodology

The design and implementation of the inquiry

Sources of bias

Limitations of research process

CHAPTER 4: FINDINGS and ANALYSIS

CHAPTER 5: CONCLUSIONS

References

Bibliography

Appendices a - Short Statement of Learning

An Analysis of the Gillette Company's Global Strategy

CHAPTER 1:

INTRODUCTION

Reason for choice of topic multinational company today has much to consider when attempting to remain profitable when establishing a presence in a foreign market. The Gillette Company represents an excellent candidate for review because their corporate history is relatively lengthy and although the company's has not always made the absolute right decision in every instance, their track record is nevertheless enviable in creating opportunities for growth and expansion of the company's operations into formerly virgin markets. Today, the Gillette Co. is an $8 billion manufacturer of male and female grooming products, alkaline batteries and manual and power toothbrushes, and markets these products globally. Certainly, most companies have learned the hard way that a "one-size-fits-all" approach to marketing does not work with their products or services in culturally distinct markets, but the fact remains that Gillette has managed to do just that in some cases, while acceding to the exigencies of foreign markets only when necessary. According to Richard B. Higgins (1996), a major component of a company's strategic credibility is based on its strategic capability, which is determined by the soundness of its corporate strategy and the effectiveness of its strategic planning process. "The strategy must embody a strategic view of the future," he says, "and a plan designed to achieve strategic goals and objectives. The strategic vision must be responsive to emerging opportunities and sensitive to the internal strengths of the company" (p. 17). The research will show that Gillette's management team has been successful with both of these components, while not being constrained by them. To this end, the following academic objectives are provided.

Academic objectives of dissertation

This study was guided by three basic research questions:

1. What are driving forces in the markets in which the company competes?

2. What types of successes has the company enjoyed and how did they achieve them?

3. What types of failures has the company experienced and what caused them?

To develop answers to these guiding research questions, the study will be organized as discussed below.

Outline of chapters

This chapter introduced the topic with a rationale for its selection and what research questions will guide the study. Chapter 2 provides a rationale for the literature to be reviewed, followed by an analysis of the scholarly and peer-reviewed literature. Chapter 3 describes the case study methodology used for the study, including the scope of the research, the basic methodology employed, the design and implementation of the inquiry, potential sources of bias and limitations inherent to the research process selected. Chapter 4 provides the study's findings and analysis of the data, followed by conclusions based on the research and analysis in the concluding chapter.

CHAPTER 2: LITERATURE REVIEW

By 1895, Gillette had started began to think in earnest of a new sort of razor. A vision of his invention came to him one morning after he realized, in despair, that his old straight razor was useless: "As I stood there with the razor in my hand, my eye resting on it as lightly as a bird settling down on its nest -- the Gillette razor was born."-- James Gilbert, 1972, Designing the Industrial State: The Intellectual Pursuit of Collectivism in America, 1880-1940.

Rationale for literature reviewed

To the extent possible, this study used only peer-reviewed and other scholarly sources obtained from university and public libraries, reliable online sources such as Questia, EBSCO and Encyclopedia Britannica; the popular press was consulted to identify current and future trends however. Current corporate data was obtained from reliable online sources such as Reuters Business, Yahoo! Finance and the company's Securities and Exchange Commission (SEC) filings. This approach was felt to be the best way to develop a verifiable snapshot view of the company's history, performance and strategies for growth using the case study methodology, which is described further in Chapter 3 below. A critical review of the relevant literature relating to the academic objectives cited above follows.

Critical review of literature relating to academic objectives

Today, the Gillette Company is over a century old, having been founded in 1901, the company competes primarily in the personal and household products industry. According to the company's most recent Form 10-K filing (March 14, 2005) with the Securities and Exchange Commission (SEC), the Gillette Company is a Delaware corporation with registered office in Wilmington, Delaware. As of December 31, 2004, the company had manufacturing operations at 31 facilities in 14 countries, and its products are sold in over 200 countries and territories (Form 10-K, 2005).

The Gillette Company has evolved into a leading global manufacturer and marketer of a wide variety of consumer products (Gillette 2005). The company's core business segments are comprised of: 1) Blades and Razors, 2) Duracell, 3) Oral Care, 4) Braun and 5) Personal Care. Of these five, the Blades and Razors segment is the primary business in terms of share of sales and profit, representing 42% of total company net sales and 68% of total operating segment profit from operations (as of 2003).

As of December 31, 2003, Gillette had manufacturing operations at 32 facilities in 14 countries. Today, the company's consumer care products are sold in over 200 countries and territories, with Wal-Mart Stores, Inc. And its affiliates, being Gillette's largest customers, accounting for 13% of net sales (as of 2003) (Gillette, 2005). A discussion of the company's founder and inventor of the safety razor, King Camp Gillette, is provided below, followed by a brief description of the company's history. A review of the company's individual business units and a review of its strategies for growth is followed by an analysis of the data and findings in Chapter 4.

King Camp Gillette. Many users of Gillette's products today may not realize that the company's founder was an ardent - if benign -- socialist admirer of the Soviet experiment, who believed that the corporate structure offered a shining example of how a society should be operated as well. According to James Gilbert (1972), "King Camp Gillette, the inventor of the safety razor, offers a picture of a businessman who explicitly and crudely transformed the corporation into the basis of a good society. Gillette's proposals, which called upon the nation to reconstruct itself into a vast business organization, were politically unfeasible. Probably few people read his books. But Gillette rightly sensed the future importance of the corporation" (p. 12). Gilbert reports that Gillette was "One of the most curious and persistent reform writers from the 1890's to beyond World War I was King C. Gillette, the razor man, or, as Upton Sinclair called him, the "Razor King." Gillette's utopia was an unadorned, centralized state, an immense world corporation based upon the corporate form" (p. 12). As the founder of one of the most important corporations of his time, and always a businessman, he clearly saw the importance of the corporation as a model for social evolution, even if he did not know precisely how to articulate his discovery. "His collectivist ideas made him neither radical, nor socialist, nor even a Democrat. He died in 1932, still a Republican and a 32nd-degree Mason, but also a fascinated observer of the Soviet experiment… READ MORE

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