The market, so accustomed to Gillette delivering quarter after quarter of golden growth, issued its penalty for missing a step. Perhaps Gillette's recent sales trends could have provided warning of the bottom line's vulnerability. Even Gillette may be finally succumbing to the traditional barriers to top line growth. The competitive retail environment has made it nearly impossible to pass through price increases, leaving acquisitions and innovative new product introductions as the only alternatives. Gillette is hoping that its new razor system, slated for introduction in 1998, will boost global sales and calm fears of stagnancy.
Experience is on the company's side.
Whenever Gillette has introduced a new shaving system, its growth has accelerated. It is reported that Gillette's research, development and manufacturing capability for the new system will be much bigger than that of Sensor. The launch costs, coupled with heavy marketing costs, could have a significant impact on margins. Gillette faces significant challenges in 1998. Share your views.