The BIC Group is a publicly traded company, founded on October 25, 1945, under the name of PPP (pens, mechanical pencils and accessories) by Marcel Bich with the help of Edouard Buffard. The company launched the BIC Cristal pen. The company grew rapidly abroad, especially during the 50s, and extended its operations in the Asian market in the late 90s. BIC today operates in five continents, in over 160 countries, while maintaining its image as a family business (Bruno Bich is Chairman of the Board). Stationery represents the core activity of the group and also the company's most influential area in turnover. Indeed, over the years, BIC has diversified its business to two areas where its market share has become important: razors and lighters. Note that BIC also sells nautical equipment (windsurfing boards, surfboards etc), a sector which represents a small contribution to the turnover of the company.
The strategic decision to segment a clear line of razors for men according to the number of blades and respond by that offer the different needs of consumers in terms of comfort and price, BIC allowed positioning itself as an expert of razors. Market developments of recent years are expanding. Signs of "hard discount" are heavily implemented while retail brands continue their conquest of the market shares. Some retailers, especially positioned on low price products, place today, from 50 to 60%, their own brands as priority.
The first result of the price war is reducing the number of brands, including small local brands. The market is now balanced between the major brands, offering premium products, mostly manufactured in Asia. In its all-inclusive range, BIC combines quality and affordable prices and meets the needs of a wide number of consumers. The Group also has an active information policy vis-a-vis its customers in order to sensitize them to issues of quality and safety, notably through numerous visits to production sites.
The market for razors is highly competitive and dominated by three great leaders. The main features are: the importance of innovation, reputation, differentiation, and even low cost strategies. Final consumers of razors for men and women are different, but customers are essential to BIC which follows central distribution to supermarkets. The market with a high competitive intensity, the bargaining power of this company should be strong. There is no specific legislation about razors, but the influence of environmental factors and recycling with the subsistence of security policies exist.
We can name a few substitutes of manufacturing razors according to the two customer types differentiated by gender:
For men: electric razors.
For women: hair removal, laser hair removal, etc.
The market for razors is the battlefield of three main groups including Gilette which is by far the leader with 65% market shares. We are ultra competitive in a market where BIC, No. 3 market, has chosen a different policy from that of Gillette and Wilkinson with a concept based on the characteristic of disposable products and a pricing policy for products as much cheaper. Innovation and performance in technology are increasingly important that participates in the growth of the intensity of competition.
[...] Marketing: The importance of huge investments in advertising and the promotion of the razor in the market. The Commercial: The leading factor in the mass distribution of products. Research and Development: Constant innovation is needed and expected by increasingly demanding consumers. Bar: Points of Criteria analysis Very Low Middle Strong? Very low stron g Product Bic is that third portfolio world Highly competitive market Pressure leaders The price is not the first purchase criterion Innovation is the key differentiator Market share Geographical distribution. [...]
[...] PESTEL analysis • Policy The political factor is not significant in the market for razors. • Economic The market for razors is decreasing. Sales fell by in volume in 2004, while prices increased by 8%.Advertising investments remain very high. • Sociological Consumers are becoming increasingly demanding in terms of performance, technology and value added products. • Technological The elements of technology and innovation are heavily promoted on the razor market. Indeed, there have been many innovations in this sector, with an increasing number of blades, the addition of components (integrated lotion . [...]
[...] The threat is present, but remains low, the reputation of the disposable lighter is strong, while Bic lighters are known for quality, reliability, and for their life. The bargaining power of customers Bic has a policy of mass distribution in large and medium size, and distribution networks in proximity (tobacco, petrol stations . Producers are few, and the bargaining power of customers is low, as only two brands are recognized: Tokai and Bic. Asian producers can attract customers but they do not have the same reputation as Bic. [...]
[...] Note that the Swedish Match is positioned on Swedish quality articles related to tobacco and, has market share in the sector. Bic lighters axis therefore bases its strategy on communication in order to highlight the quality of its products, and thus differentiate itself from competitors with low quality products. The redemption of distributors is another important element in reducing consumer access to competitors. Finally, innovation and marketing of limited edition and utility lighters are also important factors. PESTEL analysis • Policy The political factor is crucial to the strategic business lighters. [...]
[...] • Technological The technology component does not really matter in the lighter segment. New methods for recycling and production tools have been developed which are less polluting. • Ecological New standards on environmental protection are emerging. They affect both production methods and the use of raw materials. • Legal New standards have emerged for child safety. All lighters are required to be provided with safety catches. (Standards ISO 9994). Study of the five forces Porter Threat of new entrants The threat of new entrants is high. [...]
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