Competitive Intelligence

As Gillette Fights Schick over Mach 3 and Quattro, Rayovac Liked Remington So Much They Bought the Company

… Prompting Me to Ask, What’s the Deal with Batteries and Shaving?

As Gillette, the world's largest maker of shaving products (and owner of Duracell, by the way), went to court last week to counter a new competitive threat from its closest rival, Schick-Wilkinson Sword (owned by Energizer), another battery company (Rayovac) jumped into the shaving business as Rayovac bought out Remington for $322 million, plus debt. Here's an excerpt from the Gillette/Schick battle:

“Gillette filed a suit against Schick over Quattro, the first four-blade razor, for an alleged patent infringement. The suit, filed in a federal court in Boston, alleges that the new razor uses technology that Gillette developed to allow the three blades on its Mach 3 system to extend progressively closer to the face and provide a smoother shave. Gillette claims it spent $750 million to develop Mach 3. "We welcome honest and innovative competition but we will vigorously defend our valuable intellectual property," said Peter Hoffman, the president of Gillette's grooming division. The lawsuit is seeking preliminary and permanent injunctions and triple damages. Gillette has a commanding 70% share of the world market for wet-shaving products, with Schick a distant second, at 18%. But the lawsuit was viewed by analysts as a reaction to the increasing threat posed by Schick. In a market where new product development over the past few years has often hinged on the addition of further blades, Schick has stolen a march on Gillette with Quattro. While Schick was preparing the launch of the four-blade razor, the people in the research and development department of Gillette were still adding a third blade to its Sensor brand due for launch next year. The drug company, Pfizer, acquired Schick in 2000 as part of its takeover of Warner Lambert and had always intended to sell the business on. Analysts say that, in the interim, Schick received little management attention or marketing push, leaving it in a state of destabilizing uncertainty for two years. It was bought by Energizer, the U.S. battery maker, earlier this year and has since shown signs of renewed verve. Two weeks ago it reported a 27% jump in quarterly blade and razor sales. Schick is planning to launch Quattro in the U.S. market next month for $8.99. The company has already begun to make a dent in Gillette's U.S. women's market sales with the Intuition brand. The razor has three blades surrounded by a bar of soap and is more convenient for women to use in the shower. The brand is held to be behind a 2.9% gain in Schick's U.S. market share to 17%. Gillette at the same time has fallen 4.3% to 63%, according to market data firm Information Resources. 'I think this shows the seriousness with which Gillette takes the Quattro as a threat to its core blades and razors business,' said Joseph Altobello, an analyst at CIBC World Markets."

Here’re a few background links:

• The Guardian
• Yahoo News
• PRNewswire

- Arik