THE CASE METHOD: Socit BIC

1
THE CASE METHODSociété 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 Gillettes 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 ladys 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

• DONT 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.

• Dont 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
• RD 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 ladys market

25
Strategy Marketing vs Corporate

• Mass consumption
• Disposability
• Elastic demand
• Universal usage
• Convenience
• Ease 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 BICs reason for being.
• Main success factor.
• All enterprises need a basic strategy.
• Basic strategy is subject to review.