Clean Edge Razor
In August 2010, Paramount Health and Beauty Company (Paramount) was faced with a difficult dilemma. Paramount was a global consumer products company which focused their products around health, cleaning, beauty, and grooming. Paramount had spent considerable time and investment into a cutting edge non-disposable razor that was touted to provide the “closest, cleanest, and smoothest shave people had encountered.” Their dilemma was into which part of the non-disposable market they should introduce their “superior” razor into.
As we evaluate the environment in which Clean Edge will compete, we identified five key issues to analyze. The issues include new entrants into the ...view middle of the document...
Since 2005, the non-disposable razor market grew approximately 22% and the refill cartridge market grew approximately 12%. In the last three years, the non-disposable market has grown at a steady 5% rate each year and the refill cartridge market has grown at a steady rate of approximately 2%. The demand for products in this industry is high due to men’s preference for a wet shave, using either a disposable or non-disposable razor, versus using an electric razor. Approximately 73% of all men prefer using the wet shave technique that provides a closer shave over using an electric razor. The threat of new entrants is present, seeing two new entrants enter the market in the last two years. The new entrants have taken approximately 6.6% of the market share of the leaders.
Paramount is involved in a very competitive market. In the non-disposable market, Paramount currently is the leader as it relates to volume market share, but this has not always been the case. In 2007, they were last among the large players, at only half of the total market share versus the leader, Prince. But since 2007 they have steadily increased their market share making them the industry leader. Paramount’s two main competitors are Prince and Benet & Klein. Prince is a global company and had been a market leader in the non-disposable razors for the last 50 years. Prince currently sells non-disposable razors as well as refill cartridges in the super premium price point. Benet & Klein is a multinational company that just entered the non-disposable razor market some 25 years ago. In 2009, Benet & Klein introduced a new product with some innovative features, for example lubrication and anti-corrosive features on the razor. Benet & Klein compete in the super premium and moderate price points. New competitors recently entering the razor market in 2009 and 2010 have started taking some of the market share from the leaders. Radiance’s razor poses a large threat to the Clean Edge razor, entering the market 4 months prior to the Clean Edge razor and having similar technologies. The main point of differentiation for Clean Edge is its vibrating, ultra-thin five blade design which will stimulate hair follicles. In addition, the larger, heavier handle allowed for better grip and control and thus less irritation due to shaving. This new technology will set them apart from their competition.
From a customer stand point, Paramount is currently targeting the male segment and then will shortly penetrate the female side of the market as well. There are no real threats or concerns as it relates to their customers that we have identified. The demand is strong and will continue to strengthen as men continue to pay attention to their grooming habits.
After analyzing Paramount’s industry and competition, Paramount’s core problem is how to compete with Radiance’s new razor which will be introduced to the market approximately four months prior to Clean Edge and how Paramount will...