Question

Business Model Innovation: How Dollar Shave Club Disrupted Gillette . How was Gillette initially able to gain a competitive advantage? Was Gillette able to sustain its competitive advantage? If so, how?

Answer 1

Dollar shave club saw an opening the low cost razor market due to gillette focus on high end,high margin market.They started using social media by use of a promotional video that went viral with 25 million views.They used a subscription based business model which charged members a monthly and then would mail them razors every month.Dollar Shave club used a innovation in the business to disrupt an existing market(Gillette).

Gillette initially able to gain a competitive advantage thorugh introdction of safety razor.When introduce,the safety razor was a radical innovation,allowing a gillette a temporary competitive advantage.To sustain this advantage,Gillette followed up with incremental innovations,mainly by adding more blades to its razor until there were not one but 6.

However,the razor offered by Gillette are priced high.This pricing exposed gillette to low cost disruption.And soon its loose its compeitive advantage because highly priced offering of the market leader is not only overshooting what the market demands,but also often price too high.