blue ocean strategy Noncustomer Exercise INSEAD Blue Ocean Strategy Institute

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Allen Parsons
6 years ago
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1 blue ocean strategy Noncustomer Exercise

2 Life in the 1900s

3 Life in the 1900s

4 Life in the 1900s

5 Life in the 1900s

6 Shaving in the 1900s

7 Shaving in the 1900s

8 Shaving in the 1900 s

9 Shaving in the 1900 s

10 Shaving in the 1900s

11 Shaving in the 1900 s

12 Shaving in the 1900s Obtained with permission from Roy Export Company Establishment

13 Shaving in the 1900s Obtained with permission from Roy Export Company Establishment

14 Who are the existing customers of the industry

15 Who are the existing customers of the industry Medium/high income

16 Who are the existing customers of the industry Medium/high income White collar workers

17 Who are the existing customers of the industry Medium/high income White collar workers Barbers

18 What are the key competing factors of the industry?

19 What are the key competing factors of the industry? Life lasting razors

20 What are the key competing factors of the industry? Life lasting razors Forged blades

21 What are the key competing factors of the industry? Life lasting razors Forged blades Size of blade

22 What are the key competing factors of the industry? Life lasting razors Forged blades Size of blade Price of razor

23 Who are the noncustomers?

24 Who are the noncustomers? Occasional shavers

25 Who are the noncustomers? Occasional shavers Low income

26 Who are the noncustomers? Occasional shavers Low income Women

27 The Three Tiers of Noncustomers Shaving Market

28 The Three Tiers of Noncustomers Shaving Market 1st Tier Noncustomers: occasional shavers

29 The Three Tiers of Noncustomers Shaving Market 1st Tier Noncustomers: occasional shavers 2 nd Tier Noncustomers: low income

30 The Three Tiers of Noncustomers Shaving Market 1st Tier Noncustomers: occasional shavers 2 nd Tier Noncustomers: low income 3 rd Tier Noncustomers: women

31 Shaving was not yet a common habit

32 Shaving was not yet a common habit Many people found it a hassle to shave

33 In 1900, less than 26 million people lived in metropolitan cities where there were barbershops

34 1 st Tier: Occasional Shavers The remaining 66 million lived in nonmetropolitan territory and could not easily go to the barbershop

35 2 nd Tier: Low Income 40% of total population had low incomes

36 2 nd Tier: Low Income 40% of total population had low incomes 2 million people unemployed

37 2 nd Tier: Low Income 40% of total population had low incomes 2 million people unemployed 30 million below the poverty level

38 3 rd Tier: Women 37 million (49%)

39 3 rd Tier: Women 37 million (49%) 12 million between 20 39

40 3 rd Tier: Women 37 million (49%) 12 million between Can they realistically go to the barbershop?

41 What are the factors that kept them from shaving?

42 What are the factors that kept them from shaving? Price

43 What are the factors that kept them from shaving? Price Safety

44 What are the factors that kept them from shaving? Price Safety Ease of use

45 What are the factors that kept them from shaving? Price Safety Ease of use Maintenance free

46 What are the factors that kept them from shaving? Price Safety Ease of use Maintenance free Fashion and image

47 Acting on our understanding of noncustomers ERRC Grid Eliminate Raise Reduce Create

48 Acting on our understanding of noncustomers ERRC Grid Eliminate Raise Life lasting razors Forged blade Reduce Create

49 Acting on our understanding of noncustomers ERRC Grid Eliminate Raise Life lasting razors Forged blade Reduce Create Size of blade Price

50 Acting on our understanding of noncustomers ERRC Grid Eliminate Life lasting razors Forged blade Raise Safety Ease of use Reduce Create Size of blade Price

51 Acting on our understanding of noncustomers ERRC Grid Eliminate Life lasting razors Forged blade Raise Safety Ease of use Reduce Size of blade Price Create Maintenance free Fashion & image

52 Gillette s Safety Razor

53 Gillette s strategic move In 1903 Gillette invented a safety razor with disposable blades

54 Gillette s strategic move In 1903 Gillette invented a safety razor with disposable blades The razor required a small initial investment

55 Gillette s strategic move In 1903 Gillette invented a safety razor with disposable blades The razor required a small initial investment Gillette changed the business model of the industry

56 Gillette s strategic move FROM FROM TO

57 Gillette s strategic move FROM High priced razor FROM TO Low priced razor

58 Gillette s strategic move FROM High priced razor Forged blade FROM TO Low priced razor Stamped steel blade

59 Gillette s strategic move FROM High priced razor Forged blade Thick and wide blade FROM TO Low priced razor Stamped steel blade Narrow and thin blade

60 Gillette s strategic move FROM High priced razor Forged blade Thick and wide blade Unsafe FROM TO Low priced razor Stamped steel blade Narrow and thin blade Safe

61 Gillette s strategic move FROM FROM TO

62 Gillette s strategic move FROM Difficult FROM TO Easy

63 Gillette s strategic move FROM Difficult FROM TO Easy Complex honing and stropping process Disposable blade

64 Gillette s strategic move FROM Difficult FROM TO Easy Complex honing and stropping process Disposable blade Unfashionable Fashionable

65 Strategy canvas High Low

66 Strategy canvas High Straight Razor Low

67 Strategy canvas High Gillette s Safety Razor Straight Razor Low

68 Strategy canvas High Eliminate Gillette s Safety Razor Straight Razor Low

69 Strategy canvas High Eliminate Reduce Gillette s Safety Razor Straight Razor Low

70 Strategy canvas High Eliminate Reduce Raise Gillette s Safety Razor Straight Razor Low

71 Strategy canvas High Eliminate Reduce Raise Create Gillette s Safety Razor Straight Razor Low

72 Breaking the value cost trade off

73 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Cost savings Low cost

74 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion & image Cost savings Low cost Differentiation

75 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion & image Low pricing Cost savings Low cost Differentiation

76 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion& image Low pricing Cost savings Low cost Differentiation High volume Attracting the mass

77 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of Use Maintenancefree Fashion& Image Low pricing Cost savings Low cost Create a blue ocean Differentiation High volume Attracting the mass

78 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion& image Low pricing Cost savings Low cost Create a blue ocean Differentiation Replacement of blades sales High volume High profitable growth Attracting the mass

79 Annual sales, Blades millions

80 Annual sales, Blades millions 6 6m m 3.4m m 847, ,

81 Annual sales, Razors thousands

82 Annual sales, Razors thousands , , , , , ,

83 Gillette s strategic move

84 Gillette s strategic move

85 Gillette s strategic move

86 Increasing the size of its blue ocean In the 1910s, hair removal for women started to become fashionable

87 Increasing the size of its blue ocean In the 1910s, hair removal for women started to become fashionable Lengths of skirts and dresses reduced

88 Increasing the size of its blue ocean In the 1910s, hair removal for women started to become fashionable Lengths of skirts and dresses reduced This triggered Gillette to introduce the Milady Décolletée

89 Gillette s strategic move

90 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly

91 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly It became imperative for them to shave

92 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly It became imperative for them to shave Gillette partnered with the US army, selling 3.5m razors and 32m blades

93 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly It became imperative for them to shave Gillette partnered with the US army, selling 3.5m razors and 32m blades When they returned home they were heroes. It became fashionable to be clean shaven.

94 Annual sales, Blades million m 3.4m 6m m 847,400 98,

95 Annual sales, Blades million 17 17m m 3.4m 6m m 847,400 98,

96 Annual sales, Razors thousands , , , , , ,

97 Annual sales, Razors thousands m , , , , , ,

98 Shaving Trivia: Origins of the barber pole Before 1745, barbers also performed surgery

99 Shaving Trivia: Origins of the barber pole Before 1745, barbers also performed surgery Bloodletting was a popular medical practice

100 Shaving Trivia: Origins of the barber pole Before 1745, barbers also performed surgery Bloodletting was a popular medical practice The spiraling red and white stripes symbolized blood and bandages

SHAVER CATALOGUE 2018

SHAVER CATALOGUE 2018 SOCIÉTÉ BIC (SUISSE) SA Via al Mulino 22a CH-6814 Cadempino Tel. : +41 (0) 91 985 11 11 Fax : +41 (0) 91 985 11 10 www.bicworld.com As a result of the ongoing development of our product