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Clean Edge Harvard Business Cases

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Positioning Analysis

Profitability

The introduction of Clean Edge as a niche product would yield an increase in operating profit of $3.62 million and $27.75 million (1st and 2nd year respectively) after taking into account the cost of cannibalization. In comparison, introducing it as a mainstream product would result in a decrease in operating profit of $14.22 million for the 1st year and an increase of $17.06 million in the 2nd year. From the aforementioned figures, we can conclude that introducing Clean Edge as a niche product would be more favourable from a profit seeking perspective.

Furthermore, going with niche positioning for Clean Edge would confer significantly lower cannibalization cost to Paramount, as compared to mainstream positioning.

Sustainability

The target audience of Clean Edge is mainly social/emotional shavers, ie. super-premium customers, who make up approximately 25% of the non-disposable razor market. With a growth in market share of 11% within the coming two years, there would be a reduction in the growth of market share in the following years due to the limited number of customers. Thus, there would be a need for Paramount to broaden the target audience to include other categories of users (eg. Involved Aesthetic shavers). However, this would require a change in marketing strategy.

Referring to the BCG Matrix, Clean Edge would be a “Star” since it is expected to attain high growth and high market share once it is introduced. In addition, given the increase in number of shavers switching to super-premium razors, there is most likely to be a high growth rate.

Cannibalization

Given that Paramount currently has no other non-disposable razor in the niche market, there would be less cannibalization by introducing Clean Edge as a niche product. As seen in the data provided, there would be only 35% cannibalization if Clean

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