1. THE CASE METHOD: Société BIC  Define the problem  Formulate alternative courses of action  Evaluate the alternatives  Choose and recommend a course of action

2. Analyze Environment  Economic  Social  Political  Legal  Technological  OPPORTUNITIES  THREATS  Trends in disposables  Hygenic  Private  Globalization  Technological advances

3. Analyze Industry  Competitors  New Entrants  Substitutes  Strong Suppliers  Strong Buyers BIC vs the industry BIC within the industry

4. 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

5. 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

6. Analyze Industry: New Entrants  Financial Requirements  Brand Equity  Economies of Scale Not likely because  Financial requirements  BIC & Gillette names  BIC & Gillette’s size

7. Analyze Industry: Substitutes  Brand  Industry  Form  Generic  Strong brand substitutes  Strong industry substitutes  No generic substitutes

8. 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)

9. Analyze Company  Quantitative  Qualitative  Management Philosophy  Finances  Organization  Culture  STRENGTHS  WEAKNESSES Société BIC  Marcel Bich  Growing fast  Extending line  Worldwide  Strong finances  Dedicated business philosophy

10. 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%

11. 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

12. Société BIC Story: Business Philosophy  Cheaply made  Briefly used  Disposable 1953 – 1976: Pen, lighters, pantyhose, razor

13. 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

14. 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%

15. 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

16. 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

17. 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

18. Analyze Problems & Their Core Elements DON’T REPEAT THE CASE STORY! Case Material Synthesis Generalizations Implications  BIC story & shaver story  Justification of strategy  Mix decisions  Suggestions

19. Formulate & Evaluate Alternative Courses of Action  List Alternatives  Evaluate Each Alternative  Choose the Best Alternative  Detail the Implementation BIC Lady Shaver

20. Formulate & Evaluate Alternative Courses of Action: List Alternatives Generate 3-7 alternatives.  Don’t enter  Enter: penetrate  Enter: skim

21. Alternative Strategies  Innovation  Skim creaming  Prestige pricing  Broad product line

22. 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

23. 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

24. 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

25. Strategy: Marketing vs Corporate  Mass consumption  Disposability  Elastic demand  Universal usage  Convenience zEase of loss  Entry through emulation (imitation with development)  Penetration pricing  Saturated markets  Heavy advertising

26. 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.