Duracell Asqusition Essay

2174 words - 9 pages

After enjoying record sales and profits in 1997, Gillette began to experience a reversal in the growth to which it had been accustomed. The company pointed to economic problems in Asia, Brazil, and Russia, as well as a decline in the value of the Euro currency, as reasons for sales and profit decreases. In addition, Gillette made several strategic changes that no doubt shaped the future direction of the company. In February 1999, Alfred Zeien retired as Chairman and CEO and was replaced by Michael Hawley, a 39-year veteran of Gillette. Later in 1999, the company announced that it would focus on three key segments: Grooming Products (blades, razors and related toiletries). Portable Power ...view middle of the document...

The original Sensor was introduced in early 1990 and is now sold in over 80 markets worldwide. It remains the best seller in the Unites States and most other major markets. Gillette followed the Sensor with launch of the Senor Excel in 1993. Gillette leveraged both the Sensor and Sensor Excel brand names by developing versions of these products targeted at women. The Sensor for Women system, launched in 1992, established a major hold on the market share for female razor products in the United States. The follow up with the Sensor Excel for Women in 1996 was also very successful. The continued success of the Sensor family of shaving systems led to the gradual decline of the Ata and Trac II twin blade shaving systems. These systems, key Gillette brands since the 1970s, yielded their standing as market leaders. Despite this decline, both systems continue to hold sizable share positions worldwide. The company’s disposable twin blade razors’ moderate increases in sales have enabled it to maintain its position as the number one seller in this product category worldwide. Gillette’s Good News! Brand has been the best selling disposable razor in the United States each year since 1976.
In 1998, Gillette introduced a new razor with three thin blades, the Mach3, that is designed to provide a closer shave in fewer strokes with less irritation than any other razor on the market. To develop this new product, Gillette made major investments in research and development and a strong commitment to gain market share. The Mach3’s blades are mounted on tiny springs like the Sensor Excel. The Mach3 became Gillette’s most successful new product ever as sales of the Mach3 hit $1 billion in only 18 months. Mach3 was named winner of the American Marketing Association’s Grand Edison award as the best new product of 1998. Mach3 technology has been further enhanced in the Mach3Turbo for men and the Venus system for women. Further efforts to build market share for women’s shaving products include targeting teen shavers with a line of Sensor razors in a variety of colors in an attempt to develop lifelong customers at a young age.
Gillette is currently embroiled in a lawsuit with Energizer Holdings and its Schick division over patent infringement of its Mach3 technology. Prior to the launch of Schick’s Quattro razor, Gillette argued that the Quattro illegally uses the same “progressive geometry” technology as the Mach3. In filling its suit, Gillette asked for injunctive relief and monetary damages. Schick was allowed to launch the Quattro pending the resolution of the lawsuit. Shortly afterward, Schick sued Gillette for misleading claims of technological superiority in its advertising. Schick argued that Gillette’s advertisements for the Mach3 use misleading statements such as “the world’s best shave” and the “the best a man can get.”
Many industry analysts see the dueling lawsuits as a sign that Gillette is threatened by Schick’s reemergence as a player in the razor...

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