THE CASE METHOD: Société BIC Define the problem Formulate alternative courses of action Evaluate the alternatives Choose and recommend a course of action
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THE CASE METHOD:Société BIC
Define the problemFormulate alternative courses of
actionEvaluate the alternativesChoose and recommend a course of
action
Analyze Environment
EconomicSocialPolitical LegalTechnologicalOPPORTUNITIESTHREATS
Trends in disposables
HygenicPrivateGlobalizationTechnological
advances
Analyze Industry
CompetitorsNew EntrantsSubstitutesStrong SuppliersStrong Buyers
BIC vs the industryBIC within the
industry
Analyze Industry: Competitors
PriceAdvertisingSales PromotionNew ProductsServiceStrategiesSTRENGTHSWEAKNESSES
Gillette Double price “Gillette Daisy” Without guard Small ad budget Not aggressive Innovative Good brand equity Market leader
Analyze Industry: Competitors
PriceAdvertisingSales PromotionNew ProductsServiceStrategiesSTRENGTHSWEAKNESSES
American Safety Razor
Higher price “Flicker”Without guardSmall ad budgetNot aggressiveNot well known
Analyze Industry: New Entrants
Financial Requirements
Brand EquityEconomies of Scale
Not likely becauseFinancial
requirementsBIC & Gillette
namesBIC & Gillette’s size
Analyze Industry: Substitutes
Brand IndustryFormGeneric
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
QuantitativeQualitative Management
Philosophy
FinancesOrganizationCultureSTRENGTHSWEAKNESSES
Société BICMarcel BichGrowing fastExtending lineWorldwideStrong financesDedicated business
philosophy
Société 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%
Société 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
Société BIC Story: Business Philosophy
Cheaply made
Briefly used
Disposable
1953 – 1976:
Pen, lighters, pantyhose, razor
Société 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 lady’s 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 ShaverPerfect with
corporate strategyAdvantages:
GuardPriceAggressiveness
Consistent mix
Analyze Problems & Their Core Elements
DON’T REPEAT THECASE STORY!
Case Material
Synthesis
Generalizations
Implications
BIC story & shaver story
Justification of strategy
Mix decisionsSuggestions
Formulate & Evaluate Alternative Courses of Action
List AlternativesEvaluate Each
AlternativeChoose the Best
AlternativeDetail the
Implementation
BIC Lady Shaver
Formulate & Evaluate Alternative Courses of Action: List Alternatives
Generate 3-7alternatives.
Don’t enterEnter: penetrateEnter: skim
Alternative Strategies
InnovationSkim creamingPrestige pricingBroad product line
Formulate & Evaluate Alternative Courses of Action: Evaluate Alternatives
CostsTimeMoneyResourcesOpportunity Cost
Product is readyR&D incurredWill consume
promotion budgetCan spend more on
other products
Formulate & Evaluate Alternative Courses of Action: Evaluate Alternatives
BenefitsSalesProfitCustomer
SatisfactionGoodwill
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
Developing Assumptions
Enter: penetrate Assume: competition
skimming Assume: competition
not aggressive Assume: lighter
competition in lady’s market
Strategy: Marketing vs Corporate
Mass consumptionDisposabilityElastic demandUniversal usageConvenienceEase of loss
Entry through emulation (imitation with development)
Penetration pricingSaturated marketsHeavy advertising
Basic Strategy!
How Important Is A Basic Strategy for Success?
Société BIC’s “reason for being.Main success factor.All enterprises need a basic strategy.Basic strategy is subject to review.