A light-hearted analysis of the wet shaving hardware market - i.e. razors.

1. Agenda
 Module 1: Razor Industry Analysis
10/1/2014 Week 2

4. Week 4
New Application
 Value Proposition Canvas
 A more detailed part of Business Model Canvas
 Described in Aug. 2012 post on “Business Model Alchemist” blog
 Based on “Jobs to be Done” approach
 Augmented by Customer Discovery (Blank) and Lean Startup
(Ries)
 Embodied in “Outcome Driven Innovation”
1/30/14 4

5. Our situation
 Our client thinks that the wet shaving market is ripe
for disruption.
 Overserved — “the blade wars”
 Too expensive — market dominated by CPG giants
 Disposables give lousy shaves
 Inconvenient to go out and buy replacements
 Hired CompStrat Student Consulting Corp. to help
define a new segment and/or value proposition
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6. A brief history of shaving
 Prehistoric times: sharpened rocks, clam shells
 6,000 BC: invention of metal straight razor
 1903: King Gillette introduces “safety razor”
 1965: Wilkinson introduces stainless steel blades
 1970: Wilkinson introduces single blade cartridge razor
 1972: Gillette introduces Trac II cartridge razor
 1975: Bic introduces single blade disposable
 1998: Gillette introduces the Mach3 cartridge razor
 2004: Schick introduces the Quattro 4-bladed razor
 2006: Gillette introduces the Fusion 5-bladed cartridge razor
 2010: Schick introduces the Hydro 5-bladed cartridge razor
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7. A brief history of shaving
 Prehistoric times: sharpened rocks, clam shells
 6,000 BC: invention of metal straight razor
 1903: King Gillette introduces “safety razor”
 1965: Wilkinson introduces stainless steel blades
 1970: Wilkinson introduces single blade cartridge razor
 1972: Gillette introduces Trac II cartridge razor
 1975: Bic introduces single blade disposable
 1998: Gillette introduces the Mach3 cartridge razor
 2004: Schick introduces the Quattro 4-bladed razor
 2006: Gillette introduces the Fusion 5-bladed cartridge razor
 2010: Schick introduces the Hydro 5-bladed cartridge razor
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8. Projecting forward…
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Gillette’s Law?

9. Breakout
Which of these innovations was
incremental?
Disruptive?
7/14/14 Week 1 9

10. Safety is relative
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And this probably
overstates it.

11. Industry Structure
Single brand for
hardware and software
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Wet Shaving = $16.7B global market
Source: Technavio
Separate brands for
hardware and software
Single brand;
hardware only

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13. 13

14. 14

15. 15

16. 16
Note: Harry’s bought the German factory that makes their blades.

17. 17

18. 18

19. 19

20. Let’s compare
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21. Software company
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22. Forces acting on a business
The Business
Power, vigor, and competence
of existing competitors
7/15/14 Week 1
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Power, vigor, and competence
of customers
Power, vigor, and competence
of complementors
Power, vigor, and competence
of suppliers
Power, vigor, and competence
of potential competitors
Possibility that what your
business is doing can be done
in a different way
Source: Grove, “Only the Paranoid Survive”, 1996; derived from Porter

23. Three Layer Model of Competition
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Reputation
Benefits
Commodity
Image
Features
Price

24. Breakout
Where do all these products
go in our model?
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25. Where they compete
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Reputation
Benefits
Commodity

26. Market Forces: Wet Shaving
Threat of
Entrants
Technology &
Pace of Change
Globalization
Supplier Power Industry Rivalry Buyer Power
Threat of
Substitutions
Government
Social and
Cultural Shifts
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27. The economics of shaving
 Develop a model
 2-blade shavers use 5 cartridges/month
 3, 4, 5, and 6-blade shavers use 4 cartridges/month
 Calculate total cost of shaving over a three-year period
 Include cost of handle upfront (if applicable)
 Normalize to most expensive solution
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28. Total Cost of Shaving (Hardware
only)
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29. Shave Duration Equivalents
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0.00
15.00
30.00
45.00
60.00
75.00
6 blade system
4 blade system
3 blade system
2 blade system
Men's 5 blade (24 pack)
Men's 5 blade (12 pack)
Men's 3 blade (30 pack)
Men’s 3 blade (15 pack)
The Executive
The 4X (“The Lover’s Blade)
The Humble Twin
Harry's Blades (16 pack)
Harry's Blades (12 pack)
Harry's Blades (8 pack)
Harry’s Blades (4 pack)
ST2 (disposable)
Xtreme3 (disposable)
Hydro3
Quattro
Quattro Titanium
Hydro5 (disposable)
Hydro5
Trac2
Sensor3 (disposable)
SensorExcel
Sensor
Mach3 (sensitive disposable)
Mach3 (turbo)
Mach3 (sensitive)
Mach3 (base)
Fusion Manual ProGlide
Fusion Power ProGlide
Number of Hydro5-D shave year equivalents

30. Breakout
Thoughts?
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