1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life-cycle challenges for Paramount’s current products as well as Clean Edge?
The non-disposable razor category has seen changes in the recent years. * Advertising expenditures increased significantly for newer and smaller players to grab the market share whereas established players did not increase it significantly. * Male grooming product seemed to be a bright spot in the industry with the advent of male-specific personal care products that outpaced the growth in women’s beauty market 2. 5% growth per year from 2007 to 2010, attributed to innovations and product introductions. * Diversified as better margin derived from the product brought in retailers in the form of club stores and other stores.
Competitive Position: * Global Consumer Product Giant with over $13 billion in worldwide sales and $7 billion in gross profits for 2009 since its entry into the market in 1962 * Respected brand in non-disposable razor market. * 23.3% market share by volume of overall non-disposable razor unit and market leader in moderate non-disposable razor unit both by volume and dollar. * New players with technologically improved products posing a threat to Paramount.
Strategic Life Cycle Challenges:
Clean Edge Razor – based on superior technology and 5 blade design would give enormous boost in sales provided the product does not cannibalize the existing non-disposable razor segment that is doing fairly good for the company. With this objective in mind, company had to choose between three alternative strategies which are:
Launching “Clean Edge” as a “mainstream” technology product to be a market leader
Advantages:
a) Increase in profits and market share.
b) Opportunity for higher profit margin with new “premium”