Duracell Asqusition

After enjoying record sales and profits in 1997, Gillette began to experience a reversal in the growth to which it had been accustomed. The company pointed to economic problems in Asia, Brazil, and Russia, as well as a decline in the value of the Euro currency, as reasons for sales and profit decreases. In addition, Gillette made several strategic changes that no doubt shaped the future direction of the company. In February 1999, Alfred Zeien retired as Chairman and CEO and was replaced by Michael Hawley, a 39-year veteran of Gillette. Later in 1999, the company announced that it would focus on three key segments: Grooming Products (blades, razors and related toiletries). Portable Power (alkaline and specialty batteries), and Oral Care (toothbrushes and plaque removers). At the turn of the century, Gillette operated two additional business segments – Braun products and the stationery division; however, these segments were not considered primary businesses for Gillette.

Gillette remains the world leader in blades and razors, and this business continues to grow. The company holds dominant market share worldwide for men’s blades, razors, and having preparations, as well as women’s wet shaving products and hair epilation devices. As case Exhibits 1 and 2 illustrate, sales and profits remain strong, with sales increasing about 7 percent in 2002. The blades and razors segment accounts for roughly 40 percent of Gillette’s sales and over 70 percent of the company’s profits. Sales in this segment have more than doubled since 1989, and the outlook for this segment is promising as the shaving population increases, particularly in such locations as Asia. Eastern Europe, and Latin America. The company’s progress in the principal line of business reflects the outstanding market success of its technologically superior products, including the Sensor family of shaving systems and more recently Mach3 system.

The original Sensor was introduced in early 1990 and is now sold in...