Final Strategic Analysis Report BIC

Résumé du document

BIC produces and commercializes stationery products, lighters, shavers, water sports items (BIC sports), and services with promotional items (BIC GRAPHICS). It is a multinational group established in 160 countries, with more than 8400 employees and 24 manufacturing facilities. More than 3,200,000 retail outlets offer BIC products.

BIC was founded in 1953 after Marcel BICH bought and improved a license which led to the creation of a disposable pen. From 1954 to 1957 the company entered foreign markets, primarily by creating subsidiaries and acquiring companies. BIC Italy and BIC Brazil were established in 1954 and 1956, and the company acquired England's Biro Swan Company in 1957. In 1958 BIC bought the Waterman Pen Company in Connecticut, marking BIC's first entry into North America. The company introduced its BIC pens to the US market in the following year. BIC diversified in 1971 when it bought Flaminaire, a French maker of traditional lighters.

In 1973, the company introduced its first disposable BIC lighters with the popular advertising slogan ‘Flick your BIC'. Disposable razors entered BIC's product basket by its single blade razor in 1975. Fashion house Guy Laroche joined the BIC family in 1979. In 1992 the company acquired White-Out Products, a US based manufacturer of correction fluid. Marcel Bich stepped down as chairman and CEO in 1993, and was succeed by Bruno his son. BIC added the Tipp-Ex brand, Europe's leading correction fluid products, in 1997. In the same year the company also acquired Sheaffer, a worldwide manufacturer of upscale writing instruments.

Extraits

[...] These laws have major implications as they imply changing production lines, production processes and pricing policies. BIC's strategy has always been to take the lead by implementing quality and safety innovations well before laws are proposed. Strategic Groups and competition analysis BIC has three major business units: stationary, lighters and razors. In all three of its major markets, disposable goods act as ‘sub-markets' entering in competition with high quality non-disposable products. Ability to produce disposable or non-disposable products is one of the two Critical Success Factor (CSF) common to all three branches. [...]

[...] Corporate-level strategy should create value. Therefore, what is the logic of value chain economies? - cost reduction - revenue enhancement Competitive advantage is created if the following criteria are met: - valuable - rare - costly to imitate The Value Chain Support activities Firm infrastructure BIC has a combination of structures that operate in tandem which take the form of: - product divisions (stationery, lighters, shavers and water sports equipment), - geographical divisions (North America, Oceania, Europe, Middle East, Asia and Latin America), - Functional structures (finance, marketing, legal, human resources and audit). [...]

[...] The brand addresses all classic segment types, from offices to children. GOVERNANCE Core competence In order to follow its vision of high quality and affordable products, BIC has implemented its own production processes as well as quality and safety tests. For instance, in 2005, a new BIC factory opened in China, with the aim of finding a way to manufacture locally produced quality products and develop products specifically for Asian markets. As 89% of BIC products are produced in BIC's manufacturing centers, the remaining 11% of the products are manufactured by the subcontracted ones and in these cases BIC compels its proper quality standards to its subcontractors. [...]

[...] Some of these manufacturers also participate in counterfeiting the BIC brand. The brand's quality-oriented branding makes it a key victim of such activities. Once again, this is true in developing economies, as law enforcements are stronger in developed economies. As 70% of BIC's turnover is made in dollars, exchange rate risks are high. The 2007 decline of the dollar could have had a drastic effect on BIC's financial stability. Pressure applied by international raw material markets (PESTEL, Five Forces frameworks) represents a threat as they are neither controlled by suppliers nor competitive rivals. [...]

[...] For this reason, it stands alone in its strategic group. Other western brands have products providing fair quality for disposable lighters Criquet). These brands compete by having a lower quality and slightly lower prices. This strategic orientation can become a danger for them, as stronger regulations and environmental preoccupations will hinder their cost reduction policies and, thus, their prices. This point will be detailed in the PESTEL framework. Still in the disposable products, Asian manufacturers continue to have growing market shares, thanks to their extremely low prices, especially in developing economies. [...]