Gillete Case

The purpose of this paper is to answer specific questions about Gillete razor division case. These questions will be answered in eight sections providing basic idea of the content within this case.

Protagonist

Ralph Bingham is the Vice president for Gillete Safety Razor Division (SDR). It is his job to identify new business opportunities for the division and assess feasibility

Situation

Gillete is looking to reach an earning growth target as part of the corporate long-range planning process. After SDR forecasted their demand, they find out that the division would not be able to achieve target levels several years out unless they added a new product to their product lines.

Options

There are three options for introducing a new product. Reel to reel tape is complicated to use, expensive and provides sound fidelity. Eight-track Cartridge is less expensive, easy to use but it provides lower fidelity. Cassette player is compact, easy to use and popular among new generations. Within the 60 minute blank cassette market there are Professional, standard and budget cassettes

Market size for blank cassette

Recording tapes of all types is 650 Million. Prerecorded tapes represents $500 M. blank tape represents 150 M. In addition, the blank tape market represents 85% of the Market. Research reveals that six to seven million-cassette recorders are to be sold in 1970.

Market size for each quality cassette

Budget quality cassettes are believe to capture 50% of the dollar market. Professional quality cassette is suffering quality issues. Standard quality cassettes are basically the same as professional quality

Volume change over time

Extrapopulation of historical trends suggest