When Gillette introduced its Mach3 razor in 1998, with an investment of more than $1 billion in development and advertising, it was attempting to redefine the rules of competition. The move forces competitors to play catch-up against a powerful new en-hancement of the value proposition. It means Gillette continues to dictate the rules in an industry in which it has created the world’s number one shaving system.1 It also suggests that Gillette’s intention is to disrupt the market periodically, implying that Gillette will eventually replace the Mach3 standard with another breakthrough product.
Through a series of major new product launches, driven by technology and branding innovations, Gillette has sustained leadership in defining the shaving game. In the 1970s, however, Bic’s disposable razors threatened to shift the dominant value proposition to low-cost convenience. Bic grew a small niche into a mass, worldwide market, cannibalizing Gillette’s cartridge approach by continually lowering the cost and increasing the value of its razors to attract customers from cartridges and stimulate new demand. The new rules were so foreign to Gillette that one executive commented, “We’d get samples and I would try them and wonder why anybody would compromise their shave to save a little money.”2 But consumers were willing to make this compromise.
For Bic, the move... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
