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.