A BRIEF HISTORY OF SHAVING:

Since the first man arrived on the earth, a decision has had to be made -
whether to allow a beard to grow or to remove it. Cave painting have shown
that, contrary to popular opinion, early man went about his work clean-
shaven, making good use of pieces of sharpened flint. With the Bronze Age
and primitive metalworking came razors made from iron, bronze and even
gold. The civilizations of Rome and Greece used iron blades with a long
handle and developed the shape of the 'open' or 'cut-throat' razor, which was
the only practical razor until the 19th century. With improvements in steel
manufacture came blades that were really sharp and capable of re-
sharpening.
Advances in razor technology changed shaving habits in the 20th century. In
1900, most men were either shaved by the local barber (your trusted
confidante, wielding a cut-throat razor), or periodically at home when
required, rather than regularly. The barber's better-off customers would have
personal sets of seven razors, labeled 'Sunday' to 'Saturday'. Today, nearly
all men shave everyday in their own homes, using a wide variety of
equipment.
Development of the 'Safety' Razor:
The first 'safety' razor, a razor where the skin is protected from all but the
very edge of the blade, was invented by a Frenchman, Jean-Jacques Perret,
who was inspired by the joiner's plane. An expert on the subject, he also
wrote a book called 'Pogonotomy or the Art of Learning to Shave Oneself'.
In the late 1820s, a similar razor was made in Sheffield and from the 1870s,
a single-edge blade, mounted on a hoe-shaped handle was available in
Britain and Germany.
The idea of a use-once, disposable blade (which didn't need re-sharpening)
came from an American, King Camp Gillette in 1895. It was suggested to
him that the ideal way to make money was to sell a product part of which
would need replacing at frequent intervals, an early example of built-in
obsolescence. However, producing a paper-thin piece of steel with a
sharpened edge strong enough to remove a beard was a near technical
impossibility at that time. Although patents were filed in 1901, it was not
until 1903 that Gillette could go into business, with the assistance of his
technical adviser, William Nickerson, and the necessary financial backing.
He produced a grand total of 51 razors and 168 blades in that year. To
generate interest, many razors were given away to his friends.
By 1905, the year the Gillette razor came to Britain, 90,000 razors and 2.5
million blades were produced, rising to 0.3 million razors and 14 million
blades in 1908. In 1920, the Gillette razor was introduced as standard issue
to the British Army, replacing the old cut-throat. Gillette's early models had
a separate handle and clamp unit for the blade, but in the 1930s, he
introduced a single-piece version which had opening 'wings' in the top for
inserting the blade. Other razor manufacturers, such as Wilkinson, Ever-
Ready and Valet, produced similar safety razors but with resharpenable
blades. These used a new version of the old leather strop or a stropping
machine which through the blade was passed. Tiny safety razors for women,
using the Gillette system, appeared in the 1920s.
The increasing popularity of the rival electric razor prompted further
technical development in the late 1950s and 1960s onwards: long-life
stainless steel blades were introduced by Wilkinson Sword in 1956 and twin-
blade safety razors came in the 1960s, along with the completely disposable,
one-piece plastic razor introduced by Bic.
The first electric razors:
The concept of a powered razor was unknown until the 1930s. There were
some early experiments with clockwork and friction motors, but these
coincided with the increasing availability of electricity, and the invention of
the electrically-powered razor, both battery and main, eclipsed both of these.
The technology of the first electric razors was not new; the innovation was
in the housing of tiny electrical components safely inside a smooth, hand-
held casing. The electric razor was invented by a Canadian, Jacob Schick in
the 1920s. Schick was obsessed by shaving and believed that a man could
extend his years to 120 by correct, everyday shaving. He had already
invented a system of injecting blades automatically into a razor without
having to touch them. His first patent electric razor of 1923 consisted of a
large, hand-held, universal motor driving a remote cutting head via a flexible
shaft. This was clearly unmarketable without further development and, like
Gillette waiting for the perfection of his wafer-thin disposable razor blade
twenty years earlier, Schick had to wait until an electric motor had been
developed that was small enough to fit into a hand-held device, yet powerful
enough to cut through a beard.
In 1931, he sold his first electric razor in New York for $25 and managed to
sell another 3,000 that year. This greatly refined product consisted of an
oscillating induction motor (the most powerful in the world at that time for
its size) driving a sliding cutter inside a slotted shearing head. The motor had
to be 'kick-started' into life with an exposed turnwheel. All the components
were housed in a sleek, black Bakelite shell that could be held comfortably
in one hand. Schick's gadget caught the public's imagination and by 1937,
1.5 million were in use and the market for the new 'dry razor' was worth $20
million. Many competitors joined the field and a 'gold-rush' mentality
quickly developed with many patent infringements and lawsuits. Even the
well-established Gillette was forced to develop his own electric razor as it
was argued that the amount a man spent on blades, creams and lotions in a
lifetime, more than outweighed the initial high cost of the electric razor.
The Remington 'Close Shaver' and the Sunbeam 'Shavemaster' were
launched in 1937, the latter using a larger universal brush motor with a foil
shearing head, rather than the Schick's induction motor and slotted cutter.
The Philips razor or 'Philishave', launched in 1939 in the Netherlands, used
an alternative method of a rotating blade behind a circular shearing head.
The cutting area of these early electric razors was very small, typically only
one quarter of the size of those on modern razors.
The pioneer Schick razor came to Britain in the mid-1930s, followed closely
by similar, British-made examples. These included the Rolls-Razor 'Viceroy'
(of which there was also a non-electric, hand-cranked version), the
'Clipshave', the 'Kwik-Shave' the 'Smoothmaster', the 'Minute Man', the
'Zenith' and the 'Aristocrat'. These names conjure up the notion that in the
late-1930s, an electric razor was the most up-to-the-minute gadget that the
smart modern man could equip himself with. However, it was not until the
arrival of American servicemen during the war that the electric razor became
a more familiar item, although even then, their use was not permitted in
British army quarters.
Battery-operated electric razors:
Cordless, battery-powered razors arrived in the late-1940s, having a separate
power unit. These became totally self-contained in the early 1950s with the
perfection of a powerful motor that could be run from a large D-size 1.5-volt
battery included in the casing. Later, the development of smaller A-size
batteries allowed for a greater diversity in battery razor design. The first
cordless, rechargeable electric razor was produced by Remington in 1960,
followed by a model two years later that could be run either cordless or from
the mains.
Electric razor development after 1950:
After 1950 the progress of plastics technology allowed more stylized shapes
and brighter colours, although the simplicity and neatness of the pioneer
razors was replaced by bulkier casings and more features to increase sales.
More powerful motors enabled razors to have larger or multiple cutting
heads. Another change was in the way that electric razors were sold: pre-war
models had been sold on the benefits to the user of speed, safety and
convenience, with the new appliance clearly shown. By the late-1950s,
however, the public were familiar with the electric razor and the common
image of a smoothly shaven man with his adoring woman (and not a razor in
sight) spoke for itself. Throughout the 1050s, the razor continued to be
identified as a gadget for the modern man - top Hollywood actors used them
in big 1950s films such asThe Long Wait (Anthony Quinn), Rear
Window (James Stewart) and Sabrina Fair (Humphrey Bogart).
Electric razors for women:
Electric razors specifically designed for women did not appear as a separate
product until the late 1940s, although the earliest razors were illustrated
being used by women in their accompanying leaflets. In 1947, Remington
re-marketed their original 1937 model as the 'Lady Shaver', taking advantage
of the fact that their new, late 1940s models were bigger, heavier and more
'masculine'. This started the trend whereby colour and styling was used to
differentiate mens' razors from womens': by the late-1950s, Remington
were offering the 'Princess' in pink plastic and Sunbeam sold the 'Lady
Sunbeam Shavemaster', a circular design resembling a compact in jade green
with gold trim.


INTRODUCTION OF GILLETTE COMPANY
Every day, more than one billion people around the world use one or more
Gillette products. From blades and razors to toothbrushes, from alkaline
batteries to oral care appliances, Gillette is the worldwide leader in nearly a
dozen major consumer product categories.
And they are constantly challenging themselves to develop new products.
An example is Venus, their new shaving system for women. Gillette for
Women Venus combines breakthrough design with easy storage to redefine
womens shaving. In recent years, Gillette has introduced more than 20
new products annually. Among these new products were the Gillette Mach3
shaving system, the Duracell Ultra line of premium-performing alkaline
batteries, the Braun Oral-B 3D power toothbrush and the premium Oral-B
CrossAction manual toothbrush.
Their portfolio of world-class brands is organized into three core businesses
grooming, portable power and oral care.
The Gillette Company, a Delaware corporation incorporated in 1917, was
founded in 1901 by King C. Gillette, the inventor of the safety razor. Gillette
manufactures and sells a wide variety of consumer products throughout the
world. The following are Gillettes primary businesses: The Chairman of
Gillette James M. Kilts gives his views about the company in his
shareholders, letter as, There are few companies with more powerful
global brands than Gillette, and there are even fewer companies that have
so successfully used innovation to increase the market strength and
consumer appeal of their brands.
Grooming, including male and female, wet and dry, shaving
products and related toiletries.
Portable power, which includes alkaline and specialty batteries and
cells.
Oral Care, including toothbrushes and power plaque removers.
Gillette also manufactures and sells small household appliances. Gillette
has manufacturing operations at 38 facilities in 19 countries and distributes
products in over 200 countries and territories.
Grooming:
Gillette is the global leader in the Blade and Razor segment of its
grooming business. Its shaving systems include the Mach3,
SensorExcel, Sensor, Atra and Trac II brands, as well as disposable
razor brands such as Custom Plus and Good News. The company is
also the world leader in the womens wet shaving market. Gillettes
female shaving products include the SensorExcel for Women, Sensor
for Women, Agility and new Gillette for Women Venus brands.
The Company sells electric shavers and electric hair epilators as part
of the Braun Products segment. These products include the worlds
number one foil electric shaver for men and electric hair epilator for
women. The Toiletries segment includes shave preparations, after-
shave products, deodorants and antiperspirants, including the
Gillette Series, Satin Care, Right Guard, Soft & Dri and Dry idea
brands.
Portable Power:
Within the Duracell segment, the Company is the global leader in
alkaline batteries, including premium-performing Duracell ultra
batteries, as well as Duracell Copper & Black batteries, the best-
selling brand of alkaline batteries in the world. Duracell also markets
primary lithium and zinc air batteries, as well as rechargeable nickel-
metal hydride batteries.
Oral Care:
The Company holds the global leadership positions in toothbrushes,
under the Oral-B brand, and in power plaque removers, with its
Braun Oral-B plaque removers, which are part of the Braun Products
segment. The company manufactures and sells other oral care
products under the Oral-B brand.
Other Products:
The company also produces, markets and sells small household, hair
care and personal diagnostic appliances within the Braun Products
segment.
Distribution:
Gillette has 38 manufacturing facilities in 19 countries and their
products are distributed in more than 200 countries and territories
around the world. In major geographic markets, Gillette products are
sold directly to retailers and to wholesalers for resale through retail
stores. Braun personal diagnostic appliances are sold to retailers and
wholesalers, as well as to health care professionals. Oral-b products
are sold to retailers and wholesalers and directly to dental
professionals for distribution to patients. In some small geographic
markets, products are distributed through local distributors and sales
agents.
Patents:
Certain of the Companys patents and licenses in the Blade and Razor
segment are of substantial value and importance when considered in
the aggregate. Additionally, the Company holds significant patents in
its Toiletries, Duracell, Braun and Oral-B businesses. No patent or
license held by the Company is material to the Companys total
business. Gillette has licensed many of its blade and razor patents to
other manufacturers. In all of these categories, Gillette competitors
also have significant patent positions. The patents and licenses held
by the Company are of varying remaining durations.
Trademarks:
In general, the companys principal trademarks have been registered
in the United States and throughout the world where the Companys
products are sold. Gillette products are marketed outside the United
States under various trademarks, many of which are the same as
those used in the United States. The trademark Gillette is of
principal importance to the Company. In addition, a number of other
trademarks owned by the Company and its subsidiaries have
significant importance within their industries. The Companys rights
in these trademarks endure for as long as they are used or registered.
Competition:
All of the Companys markets are highly competitive. Many of the
Companys competitors are larger and have greater resources than
the Company. The grooming products business is marked by
competition in new technology, as well as in price, marketing,
advertising and promotion to retail outlets and to consumers. The
Companys major competitors worldwide in blades and razors include
Pfizer Inc., with its Schick product line, and, in North America and
Europe, its Wilkinson Sword product line; and Societe Bic S.A.
Toiletries is highly competitive in terms of price, product innovation
and market positioning, with frequent introduction of new brands
and marketing concepts, especially for products sold through retail
outlets, and with product life cycles typically shorter than in the
Companys other businesses. The portable power products business is
highly competitive in terms of product performance, innovation and
price, and in marketing, advertising and promotion, Competition in
oral care products is focused on product performance, price and
professional endorsement. Competition in small household appliance
products is based primarily on product performance, innovation and
price, with numerous competitors.
Employees:
At year-end, Gillette employed approximately 35,200 persons, about
70% of them outside the United States.
Research and Development:
In 2000, research and development expenditures were $179 million,
compared with $201 million in 1999 and $190 million in 1998.
Raw Materials:
The raw materials used by Gillette to manufacture its products are
purchased from a number of suppliers, and substantially all such
materials are readily available.
Description of Property:
The Company owns and leases manufacturing facilities and other real
estate properties in the United States and a number of foreign
countries. The companys executive offices are located in the
Prudential Center, Boston, Massachusetts, where it holds a long-term
lease.


GILLETTE IN PAKISTAN:
Gillettes products have been distributed in Pakistan since 1913.In 1982 however the Gillette
company made a more substantial commitment to doing business in this country by
formally appointing a distributor in Pakistan. This was followed by the incorporation of a
subsidiary, Interpak Shaving Products Limited in 1986 and the establishment of a double-
edge blade manufacturing facility at the Hub Industrial Area, Balochistan, which started
production in 1989. This facility was expanded in 1991 with the installation of a local
assembly plant for Gillettes premium quality shaving systems and disposable razors.
Later, the Pakistan Governments decision to deregulate the economy
allowed. The Gillette Company to acquire 75% of the equity of the
local company. As a consequence of this move, the company decided
to change its name from Interpak Shaving Products Limited to
Gillette Pakistan Limited. The company has the advantages of
participating in a global network that encompasses superior research
and development, production and marketing.
Throughout 1994, business performance was strong for Gillette the
world over, and in Pakistan as well. By November, Gillette Pakistan
Limited achieved a record monthly sales and a record monthly
production volume! However, the most important financial feat of the
year was that for the first time since Gillette Pakistan Limited (then
known as Interpak Shaving Products Limited) started operations in
1989 it garnered breakeven results.
Not surprisingly, it was not just our customers who knew they were
on to a good thing. The Gillette Blue II Cha Cha Cha Chan
commercial was awarded the Pakistan Advertising Associations
Excellence Award for the Best Mass Media Commercial in its
category. A fifth of Beethoven, and one hundred percent Gillette
now thats what we call the cutting edge. Another highly successful
Gillette Blue II advertising campaign was the Triangular Cricket
Series in October 1994. This was the first time Gillette decided to
venture into a major advertising opportunity connected with sports in
Pakistan. The company arranged a folk dance recital before the start
of play and during lunch break which was greatly appreciated by the
audience. In addition, we distributed placards amongst the
spectators, which were raised enthusiastically every time a six or four
was hit. Gillettes advertising in the Triangular Cricket Series had a
major impact on a wide audience both in the stadium and through
television.
Environmental Conservation Program in Pakistan:
Gillette Pakistan is committed to contributing to the welfare and well being
of the country, and we aim to achieve this end by involving ourselves in a
variety of community and national projects. The company contributes to
various charitable organization.
Gillette also is committed to a program of environmental conservation. The
Gillette Company has a long-standing, worldwide commitment to conserve
natural resources, to manufacture products that are safe for consumers to
use, to assure healthful and safe working conditions for employees, and to
minimize the impact of manufacturing processes on the environment as a
whole. In keeping with this commitment, all company employees are
educated in the concepts and importance of this program. Gillette Pakistans
environmental achievements include recycling of chemicals, treatment of
processed water for further use, and reduction of plastic materials in
manufacturing and packaging.
The Technological Edge:
There is a difference between a good company and great company. A good
company tries to make its way to the top and sometimes succeeds. A great
company strides ahead of the rest, and then refuses to rest on its laurels. The
nearly 1,000 members of our international scientific and engineering team
continually strive to expand the companys knowledge of the technologies in
which our products are based. Often complex in theory, yet simple in their
ultimate use in the hands of a consumer, Gillette products reflect a blend of
scientific understanding, sound engineering principle and peerless
manufacturing skill. At Gillette, we have the drive to find a better way, of
trying to make the satisfied consumer even more satisfied. For instance, how
can you make a great shave even greater? Or improve upon a toothbrush that
dentists all over the world swear by? The company has built its position as a
world leader in the consumer products industry by endlessly searching for
answers to the kinds of questions that many others may not ask. Because
part of being a great company is knowing that being good simply is not good
enough. You have to get better everyday.


GILLETTE AT A GLANCE:
In 1926, the year of the Company's 25th anniversary, King C. Gillette wrote
of the companys flagship product, the safety razor, "There is no other article
for individual use so universally known or widely distributed. In my travels,
I have found it in the most northern town in Norway and in the heart of the
Sahara Desert".
These words could just as easily be written today not just about our
razors, but about the wide range of top-selling Gillette products.
From Boston to Bangkok, Johannesburg to Mexico City to Berlin, the
modern traveler encounters a Gillette product portfolio far broader, and a
worldwide presence far stronger, than any envisioned by the Company's
founder. The Gillette Company today is the global market leader in nearly a
dozen major consumer products categories, principally in the grooming,
portable power and oral care businesses.
In the 100 years since the Company was founded, Gillette has gained, held
and strengthened leadership positions through the Company's strategy of
managing its business with a long-term, global perspective.
This demonstrated ability to generate long-term, profitable growth in a
changing global marketplace rests on several fundamental strengths. These
include a constantly increasing accumulation of scientific knowledge in core
businesses, innovative products that embody meaningful technological
advances and an immense manufacturing capability that produces billions of
flawless products every year reliably, efficiently and cost-effectively.
Transforming innovative ideas into useful daily products sold at a fair price
engenders another fundamental Gillette strength strong and enduring
consumer brand loyalty around the world.
Skillful marketing of superior technology to achieve worldwide leadership is
the goal of The Gillette Company. It is a goal pursued in global businesses
that are large and healthy, with tremendous potential derived from normal
market development, as well as from growth stimulated by new products.
Nowhere are these qualities more evident than in the Company's powerful
grooming, portable power and oral care franchises.
As its exceptional performance throughout the twentieth century has shown,
Gillette is without peer in the grooming business. The Company has the
scientific knowledge to create, and the technical ability to develop and
produce, hair removal products that deliver a superior shave, whether wet or
dry, whether for men or women. An array of premium quality shaving
preparations and after-shaves complements the shaving process and rounds
out the Gillette grooming franchise. Additional market presence and support
is provided by the Company's well-established deodorant/antiperspirant
brands.
Portable power is another thriving worldwide business in which the
Company competes successfully. Duracell, the most popular brand of
alkaline batteries in the world, has expanded its clear global leadership in the
rapidly growing alkaline battery market.
Today, consumers around the world are embracing a growing number of
portable digital electronic devices. Enhancing its growth prospects, Duracell
offers strategic power-consulting services to leading device manufacturers to
further the inclusion of alkaline batteries as a power source in these
increasingly popular consumer devices.
Another large global business offering sizable growth opportunities for the
Company is oral care. It has been Gillette's fastest-growing business in
recent years.
The Company's Oral-B and Braun brands hold the global leadership
positions in manual and power toothbrushes, respectively.
Within its powerhouse businesses of grooming, portable power and oral
care, the Company has a formidable portfolio of global brands. These seem
poised for growth as Gillette products across a spectrum of product
performance and price points are being used by new consumers all the time.
In the grooming business, for example, the great majority of male Gillette
shavers in developing markets use double-edge blades. The first step up the
performance/price ladder for these consumers is to advance to Gillette twin-
blade shaving systems or disposable razors. In more developed markets, the
movement may be entirely within the systems category, as consumers trade
up from twin-blade to triple-blade shaving.
Similarly, more than 75% of the world's consumers of portable power use
less costly zinc carbon batteries, rather than better performing alkaline. Once
converted to Duracell alkaline batteries, these consumers can then trade up
to the advanced technologies and premium performance of the Duracell
brand.
Oral care offers a comparable opportunity as consumers trade up from
regular Oral-B manual toothbrushes to the premium-priced CrossAction
manual toothbrush, and then move on to power-assisted Braun Oral-B
plaque removerswhich generate a highly profitable refill brush-head
business.
These leading global brands are the strength of The Gillette Company. They
demonstrate their global commitment to growth through innovation, growth
that will assure the Company's long-term competitive success as a world
leader in the consumer products marketplace.
To market and sell their portfolio of products, Gillette is organized into two
groups:
Global Business Management:
Global Business Management has worldwide responsibility for all research
and development, manufacturing and strategic marketing for all Gillette
product lines.
Commercial Operations:

Commercial Operations is responsible for all trade marketing and sales for
all of the Company's product lines worldwide.


GILLETTES VISION:
The Gillette Companys Vision is to build Total Brand Value by
innovating to deliver consumer value and customer leadership faster,
better and more completely than our competition. This Vision is
supported by two fundamental principles that provide the foundation
for all of their activities: Organizational Excellence and Core Values.
Organizational excellence:
Attaining their Vision requires superior and continually improving
performance in every area and at every level of the organization.
Their performance will be guided by a clear and concise strategic statement
for each business unit and by an ongoing Quest for Excellence within all
operational and staff functions.
This Quest for Excellence requires hiring, developing and retaining a diverse
workforce of the highest caliber. To support this Quest, each function
employs metrics to define, and implements processes to achieve, world-class
status.
Core values:
As they work toward their Vision, three core Values define the way
they operate:


BUSINESS MISSION STATEMENT:
The Mission Statement of Gillette Company is:
Our mission is to achieve or enhance clear leadership, worldwide, in the existing or new
core consumer product categories in which we choose to compete.
Achievements:
They are dedicated to the highest standards of achievement in all
areas of their business. They strive to consistently exceed the
expectations of both external and internal customers.
Integrity:
Mutual respect and ethical behavior are the basis for their
relationships with colleagues, customers and the community. Fair
practice is the hallmark of the Company.
Collaboration:
They work closely together as one global team to improve the way they do
business every day. They communicate openly and establish clear
accountability for making decisions, identifying issues and solutions, and
maximizing business opportunities.


GILLETTES CORPORATE STRATEGIES:
People oriented:
They will attract, motivate, and retain high-performing people in all areas of their
business. They are committed to competitive, performance-based compensation,
benefits, training and personal growth based on equal career opportunity and merit.
They expect integrity, civility, openness, support for others and commitment to the
highest standards of achievement. They value innovation, employee involvement,
change, organizational flexibility and personal mobility. They recognize value and are
committed to the benefits found in the diversity of people, ideas and cultures.
Customer Focus:
They will invest in and master the key technologies vital to category success. They
will offer consumers products of the highest levels of performance for value. They
will provide quality service to their customers, both internal and external, by
t4reating them as partners, by listening, understanding their needs, responding
fairly and living up to their commitments. They will be a valued customer to their
suppliers, treating them fairly and with respect. They will provide these quality
values while improving their productivity.
Good Citizenship:
They will comply with applicable laws and regulations at all government levels
wherever they do business. They will contribute to the communities in which they
operate and address social issues responsibly their products will be safe to make and
to use. They will conserve natural resources, and they will continue to invest in a
better environment.
They believe that commitment to this mission and to these values will enable the
Company to provide a superior return to their shareholders.
Diversifying Business:
Gillette is not stagnated on manufacturing male and female grooming products but
also going to conglomerate diversification as they are manufacturing alkaline
batteries and cells, oral care products including toothbrushes, household appliances
including coffee makers and food preparation products. In this way, they are highly
diversified in concentric and conglomerate categories.
Going Downstream:
After acquiring core manufacturing capabilities, they have gone downstream,
towards the customer end to tap into valuable economic activity that occurs
throughout the entire product life cycle. They believe on forward integration system
as they offer set of blades cartridges for their safety razors in shaving market and
they also provide maintenance facility for their household appliances. In this way,
they sell safety razors in order to open the door for capturing series of earnings by
selling cartridges of safety razors.
They are building customer allegiance. Their goal is not necessarily to gain the
largest share of customers but to gain the strongest relationship with the most
profitable customers. This also helps to gain customer loyalty.
Close Relationship with Customers:
They make direct contact to the customers. In their view, the customer is the most
important and they consider their customer as a king. They have particular strategies
to make close relationship with their customer. The Management visits Retail Stores
randomly every month in order to inquire the feedback from the Retail Stores about
their customers. They hire unanimous marketing research agencies who have
activities to record customers views about product performance and quality.
Focus On Differentiation:
They do not stick on a single product for longer period of time because they
believe on shorter product life cycle period as they consistently introduce
more and more new advanced technological products. They have very
efficient and effective research and development centers all over the world
where they continuously do research through their expertise and come up
with new innovative and more beneficial products for their customers.


GILLETTE IN A VIEW OF B.C.G. MATRIX:
If we analyze they Gillettes products according to the BCG matrix and
evaluate selection of strategies which should be followed by the company in
concern with the products we may indicate finally as:
1. Star:
According to the BCG matrix Mach 3 is the star of Gillette world
widebecause it has more market share and more market growth
opportunity as compared with its other products.
2. Cash cow
Blue stick razor is the cash cow of Gillette company because its
market share is high but now its market growth is low as Gillette has
launched its new products.
3. Problem child
The problem child of Gillette company is double edged blade because
it has low market share but it has market growth especially for the
markets of under developed and developing countries.
4. Dog
The Gillette company do not contain any dog brand currently but in
recent past they came with stationery products those products were
not profitable for the company and became a dog so the company used
divest strategy and closed their stationery products.


STRATEGIES FOR PRICING AND PRODUCT
DIFFERENTIATION:
Price and product quality has close relationship the Gillette company has
adopted the following strategies for setting prices and product quality
L - indicates low
M - indicates medium
H - indicates high
1. Low Price And Low Quality
2. Medium Price And Medium Quality
3. Low Price And High Quality
4. Medium Price And High Quality
5. High Price And High Quality
6. High Price And Medium Quality
7. High Price And Low Quality
8. Medium Price And Low Quality
9. Gillette company has adopted number 2 ,4,5 strategies because non of
its product is of low price and low quality.
10. Gillette Company has done following differentiation to make their
products unique.
Gillette MACH3Turbo:
Gillette MACH3Turbo is the best performing shaving system ever - even
better than MACH3. It delivers the closest and most comfortable shave with
less irritation, even when shaving against the grain.
Protected by 35 patents, MACH3Turbo combines several innovations,
including new Anti-Friction blades, an ultra-soft protective skinguard, a
new patented lubrication system and an improved razor handle.
Differentiated Features Of Mach3 Turbo:
Three Anti-Friction blades glide through beard hair with less
resistance than any other blades, for the closest, most comfortable shave.
The ultra-soft skinguard consists of ten thinner and more flexible
microfins that precede the blades and smooth out the skin, gently lifting
even stubborn hairs before the first blade cuts them.
The Indicator lubricating strip with Vitamin E features a new
patented lubrication system, which releases even more lubrication over a
greater number of shaves, improving razor glide and adding to shaving
comfort. The green stripe fades with use to signal when men are no longer
getting the optimal MACH3Turbo shave.
The MACH3Turbo handle features knurled elastomeric crescents and
metal grooves that provide better handling and control when shaving, and a
sleek, modern design with a titanium-like finish.
Superior forward-pivoting action, housed in the cartridge itself
instead of the blade handle, allows the three blades to glide effortlessly
along the surface of the skin while maintaining their progressive alignment.
Open cartridge architecture makes rinsing and cleaning the
MACH3Turbo blades easier than ever; the single-point docking system-
loading the cartridge at one point instead of two-makes it virtually
impossible for consumers to accidentally load a cartridge upside down.
Independently moving spring-mounted blades sense and adjust to
every contour of the face, adding to the closeness and comfort of the shave.
The shaving organizer holds both the razor and extra cartridges,
stands on end for convenient storage and packs easily for travel.
New Gile Seriestm Shave Gels And Foams :
New Gillette Series Shave Gels and Foams are premium, technologically
advanced products that have been designed specifically for the individual
skin care and protection needs of men.
New Gillette Series Shave Gels and Foams moisturize and soften beard hair;
create a protective layer of lubrication to maximize razor glide during
shaving; and feature skin comfort ingredients to provide the protection and
comfort needed for healthy looking skin.
Differentiated Features:
The new Gillette Series Shave Gels have been enhanced with anti-
friction lubricants for ultra smooth razor glide. New Gillette Series Shave
Gel and Foam for Sensitive Skin has added Aloe to gently soothe skin.
New Gillette Seriestm After-Shave Gels, Lotions And Splashes:
New Gillette Series After-Shave Gels, Lotions and Splashes are premium,
technologically advanced products that have been designed specifically for the
individual skin care and protection needs of men.
New Gillette Series After-Shave Gels, Lotions and Splashes provide
advanced comfort and protection, which helps restore skin to a healthy
balance after shaving. New Gillette Series After-Shave Cooling Gel has been
reformulated to provide a long-lasting skin cooling sensation, to calm
irritation and to help restore the skin to a natural balance.
New Gillette Series After-Shave Moisturizing Lotion has been
reformulated with soothing humectants for a comfortable feel and smooth
look.
New Gillette Series After-Shave Splash has been reformulated to
incorporate a combination of unique skin hydrating ingredients, with
masculine fragrances including Cool Wave, Wild Rain, Pacific Light and
Arctic Ice/Peak.
New Gillette Series After-Shave Gels and Lotions are available in Sensitive
Skin, Normal-Dry Skin, Conditioning and Protection Formulas in the following
fragrances: Cool Wave, Wild Rain, Pacific Light and Arctic Ice / Peak.
New Gillette Series After-Shave Gels, Lotions and Splashes feature
distinctive, ergonomically designed side grips to maximize product
identification and appeal.
Translucent bottles with easy flip caps have been developed to
differentiate the After-Shave Cooling Gel from the After-Shave Moisturizing
Lotion.
A new premium glass bottle has been developed for the After-Shave Splash
New Gillette Series Anti-Perspirant & Deodorant:
New Gillette Series Anti-perspirants and Deodorants are premium,
technologically advanced products that deliver long-lasting odor and
wetness protection in a variety of forms that meet the specific application
needs of men.
The Anti-perspirants and Deodorants are available in new Power Stripe,
Clear Gel, Clear Stick and Invisible Solid Stick forms.
The New Gillette Series Power Stripe is available in three new fragrances:
Surf, Breeze and Frost. The other Anti-perspirant and Deodorant forms are
available in the traditional Gillette Series fragrances: Cool Wave, Wild Rain,
Pacific Light and Arctic Peak.
Differentiated Features:
New Gillette Series Power Stripe features a breakthrough odor control system concentrated
in a distinct blue stripe. Power Stripe delivers strong, long-lasting protection against odor
and goes on clear with no residue. It also features a strong anti-wetness ingredient to keep
men's underarms dry.
New Gillette Series Power Stripe Anti-perspirants and Deodorants feature a clear cap that
provides consumers with direct views of the stripe, while light-reflective graphics
highlight the products' benefits.
MACH3
TM
Cool Blue From Gillette:

The new MACH3
TM
Cool Blue shaving system combines Gillettes most
advanced shaving technology from MACH3
TM
with an eye-catching, icy
blue-colored handle. MACH3
TM
provides men with the closest shave in
fewer strokes with less irritation, while the ergonomic handle provides a
secure grip for a fast, safe shave.
Differentiated Features:
The ergonomic handle in new "Cool Blue" features three rubberized
crescent-shaped grips, and is easy to hold and maneuver throughout the
entire range of shaving motions.
Three blades positioned in a proprietary progressive configuration give
men a closer shave in fewer strokes with less irritation. During the course
of a single stroke, each blade shaves closer than the one before.
The patented DLC
TM
comfort edges are thinner than any other Gillette
blade edges and glide through beard hairs more easily. With MACH3, the
consumer experiences less drag and pull for an extraordinarily
comfortable shave.
The cartridges superior forward pivoting action allows the three blades to
glide effortlessly along the surface of the skin.
The Indicator

lubricating strip, with Vitamin E, provides skin benefits to

address irritation. blue stripe on the strip fades with use to alert men
when theyre no longer getting the optimal MACH3
TM
shaving
experience.
Open cartridge architecture makes rinsing and cleaning the blades easier
than ever; the single-point docking system (loading the cartridge at one
point instead of two) simplifies the loading process and eliminates any
guesswork, since its impossible for consumers to accidentally load a
cartridge upside down.
Independently moving spring-mounted blades sense and adjust to every
contour of the face, adding to the closeness and comfort of the shave.
Gillette Right Guard Xtreme Sport Anti-Perspirants:
New Gillette Right Guard Xtreme Sport anti-perspirants are the latest
additions to the Right Guard brand and are targeted toward active young
men. These performance-driven anti- perspirants provide effective
protection without leaving a white residue and are available in Invisible
Solid, Ultra Gel and Clear Stick formulas in two new, long-lasting
fragrances -- Fresh Blast and Cool Peak. The products are designed to
keep performing even when men push themselves to their limit.
Differentiated Features And Benefits:
Right Guard Xtreme Sport Invisible Solid looks white, but goes on
clear. This stick solid form, which protects against wetness all day long,
is a favorite among young men.
Right Guard Xtreme Sport Ultra Gel features a new and improved gel
formulation with enhanced odor protection and a longer-lasting fragrance
that leaves men feeling cool and fresh. This clear gel incorporates a
powerful wetness- and odor-stopping ingredient, but leaves no white
residue.
Right Guard Xtreme Sport Clear Stick is a transparent stick that leaves
no white residue. The clear, drier formula glides on without any caking or
clumping, and protects against odor and wetness.
Right Guard Xtreme Sport anti- perspirants are available in two new
fragrances based upon the latest prestige scents -- Fresh Blast and Cool
Peak.
Cool Peak is a long-lasting masculine fragrance that leaves men feeling
fresh, clean and ready for action, while Fresh Blast has an appealingly
warmer, woody scent.
Right Guard Xtreme Sport anti-perspirants will be available beginning in
April 2000 in food, drug, and mass merchandise outlets across the U.S.
Gillette Series Arctic Peak Ultra Conditioning Shave Gel:
Gillette Series Arctic Peak Ultra Conditioning Shave Gel.
Differentiated Features:
Ultra Conditioning. Arctic Peak Ultra Conditioning Shave Gel contains a
unique blend of advanced lubricants and beard softeners for unsurpassed
razor glide and protection against nicks and cuts.
Extra lubrication. Arctic Peak Ultra Conditioning Shave Gel is specially
formulated with emollients, aloe and soothing moisturizers to help
protect against irritation and provide greater skin comfort.
Rich lather. Arctic Peak Ultra Conditioning Shave Gel foams-up quickly to
produce a rich, long-lasting lather.
Ergonomic dispensing. Arctic Peak Ultra Conditioning Shave Gel features
an ergonomically designed dispensing system that significantly improves
handling and control during use.
Arctic Peak -- the newest of the Gillette Series signature fragrances --
is bold, refreshing and adventurous. It features an oakmoss, warm woods
and musk base note combined with a geranium, cinnamon, sage and
honeyed mahogany middle note that is topped with a unique blend of
apple, bergamot, pineapple and basil. The Arctic Peak fragrance
capitalizes on the appeal of a clean, sporty scent that projects a well-
groomed, modern image.
The Arctic Peak fragrance was created by an advanced fragrance
technology called "head space analysis," used today in many of the
world's finest fragrances. This technology allows perfumers to extract the
aroma of a particular plant or flower while it is a living organism rather
than collecting the essential oil from dying or decaying flora.
Dry Shaving:

Braun Syncro System Factsheet Braun Syncro Shaver.
Differentiated Features:
World's first 4-way moving head: The pivoting and now oscillating
head shaves closer. The oscillation movement dynamically increases
the size of each foil hole, increasing the effective shaving area by 60%
to capture even more hair in fewer strokes, for a longer lasting, closer
shave. The movement also reduces friction between shaving foil and
skin by 30%, creating even less irritation.
Improved cutter block speed: The motor speed is increased by 10% to
8,500 R.P.M.
New Long Hair Trimmer: The higher trimmer position and upward
pointing angle gives better visibility of the trimmer contour in the
mirror.
New interactive display: Provides information on charge status,
cleaning, warning and key part numbers. The display is always
upright, it flips automatically when the shaver is place head first into
the Braun Clean & Charge.
New central switch with integrated lock: Prevents accidental switching
on e.g. in a suitcase.
New appealing ergonomic design Combining perfect function and top
design quality.
Accessories included: Travel case, cleaning brush, 12-volt cord, and a
wall mount (selected models only).
Introducing Mach3
tm
Cool Blue From Gillette:
Boston, January 8, 2001 -- The Gillette Company today introduced
MACH3
TM
Cool Blue, a new razor that combines the advanced shaving
technology of MACH3
TM
with an eye-catching, icy blue-colored handle and
organizer. The new razors color, which capitalizes on recent design trends,
was selected for its global appeal, particularly among young men.
"Our research has shown again and again that color -- when combined with
superior performance -- can play an important role in a mans choice of
razor," said Elena Fernandez-Bollo, Vice President, Grooming Products, The
Gillette Company. "With blue as the current color of choice for cutting edge
products from skiwear to personal computers and wristwatches, our choice
for a re-colored MACH3
TM
became an easy one."
MACH3
TM
provides men with the closest shave in fewer strokes with less
irritation, while the ergonomic handle provides a secure grip. The handle --
now available in "Cool Blue"-- features three rubberized crescent-shaped
grips and is easy to hold and maneuver throughout the entire range of
shaving motions.
The introduction of MACH3
TM
Cool Blue follows the Companys highly
successful introduction of MACH3
TM
in 1998, sales of which have reached
$1 billion. Today, Gillette holds more than two-thirds the dollar share of the
global razor market.
MACH3
TM
Cool Blue will be supported by a print and broadcast advertising
campaign with the tagline, "Move to the Cool Blue World of MACH3." The
razor will be available in North America and Europe beginning in February
2001, in food, drug, convenience and mass merchandise stores. The
suggested retail price in the U.S. is $6.49 - $6.99, including razor, organizer
and two cartridges.
Headquartered in Boston, Mass., The Gillette Company is the world leader
in male grooming, a category that includes blades, razors and shaving
preparations. Gillette also holds the number one position worldwide in
selected female grooming products, such as wet shaving products and hair
epilation devices. In addition, the Company is the world leader in alkaline
batteries, toothbrushes and oral care appliances.


GILLETTES CONTRIBUTION TOWARDS SOCIETY:
The Gillette Company has a long and proud tradition of corporate social
responsibility. In the Values portion of the Gillette Mission and Values
statement, the Company reaffirms its long-held view of good citizenship:
We will contribute to the communities in which we operate and address
social issues responsibly.
For a global leader like Gillette, fulfilling this traditional value of good
citizenship has meant reaching beyond the workplace, through corporate
contributions and employee involvement, to improve our communities. In
recent years, the Company's efforts have involved many initiatives around
the world, including:
School renovations for kindergarten children in Santiago, Chile.
Literacy programs for young people in South Boston, Massachusetts.
A swimming club for the disabled in County Kildare, Ireland.
Disaster relief for victims of the earthquake in Turkey.
Donations of personal care products to survivors of floods in the
Midwest of the United States.
Gillette is dedicated to supporting organizations that address critical needs
and work to improve the quality of life in the communities in which they
have operation. Their commitment to the neighborhoods where we live and
work is illustrated through our support
of Community, Environmental and Women's Cancers Programs.
The company awards financial grants in the following programs:
Education and jobs skills training.
Arts and culture.
Health care.
Housing and Community development.
Social services.
Environmental Programs:
Gillette has a long-standing, worldwide commitment to conserve natural
resources, to manufacture products that are safe for consumers to use, to
assure healthful and safe working conditions for employees and to minimize
the impact of manufacturing processes on the environment as a whole.
Gillette is the founder and national corporate chair of the Corporate
Wetlands Restoration Partnership, a first-of-its-kind public-private initiative
to restore America's environmentally valuable wetlands.
Non-Animal Testing Methods:
For the past six years (1996 - 2001), no laboratory animals have been used to
test Gillette personal care or other consumer products or ingredients. Gillette
continues to focus on developing non-animal testing methods and supporting
other organizations in their efforts to develop and validate alternative testing
methods.
Womens Cancer Program:
Recognizing the importance of emotional wellness to cancer care, Gillette
launched The Gillette Women's Cancer Connection, as a means to address
the profound emotional and social issues brought on by breast and
gynecologic cancers. A first-of-its-kind program, the Gillette Women's
Cancer Connection provides women cancer patients, and their families and
friends, with vital connections to people and resources needed to ease the
journey through the treatment of women's cancers. Following are the core
elements of the initiative:
In 1997, The Gillette Company awarded a $5 million grant to Dana-
Farber / Partners CancerCare to help establish The Gillette Centers
for Women's Cancers, an adult oncology service that combines the
strengths of three world-class institutions: Dana-Farber Cancer
Institute, Brigham and Women's Hospital and Massachusetts General
Hospital. The Centers offer unprecedented patient-focused,
multidisciplinary care in a sensitive and supportive environment. The
grant is being used to underwrite research and innovative clinical
therapies for the prevention, early detection, and cure of breast and
gynecologic cancers.
Web site:
The Gillette Women's Cancer Connection
site,http://www.gillettecancerconnect.org/, provides critical tools,
resources and information including local support group listings, a
highly interactive online support community, and articles specifically
designed for women, partners, children, parents, siblings, friends and
co-work
Educational Brochure Series:
The Gillette Women's Cancer Connection brochure series - A Road
Map to Emotional Wellness and When Someone You Love Has
Cancer: A Guide For Families - addresses the emotional and social
issues women and their families face with a cancer diagnosis
including: how to cope with changes in their everyday lives, and
feelings of confusion, fear and helplessness. The brochures are also
available in Spanish.
Kids Konnected:
Through a special partnership grant, the Gillette Women's Cancer
Connection helps Kids Konnected, a national nonprofit organization
with chapters nationwide, meet its mission of offering friendship,
understanding, education and support for kids who have a parent
with cancer.


GILLETTES PRODUCTS:
Their mission is to achieve or enhance worldwide leadership in the
consumer product categories in which they choose to compete. Their focus
is on placing resources behind Gillettes three core businesses: grooming,
portable power and oral care. Their core businesses account for nearly 80%
of their sales and 90% of their profits. They are in all three the
undisputed global leader.
Each of their core businesses contain power brands that:
Engender strong consumer loyalty.
Are perceived to be the best by consumers.
Command premium pricing due to our technical leadership.
Compete in growing global categories.
Have a high profit margin.
Some of their core brands include:
Gillette Mach3 turbo
Gillette Mach3
Gillette for Women Venus
Gillette Series
Gillette Satin Care
Duracell Ultra
Oral-B Toothbrushes
Braun Oral-B Plaque Removers
Braun Electric Shavers
New Gillette Series Shave Gels and Foams:

New Gillette Series Shave Gels and Foams moisturize and soften beard hair;
create a protective layer of lubrication to maximize razor glide during
shaving; and feature skin comfort ingredients to provide the protection and
comfort needed for healthy looking skin.

The new Gillette Series Shave Gels have been enhanced with anti-friction
lubricants for ultra smooth razor glide.
New Gillette Series After-Shave Gels, Lotions and Splashes:

New Gillette Series After-Shave Gels, Lotions and Splashes, designed
specifically for the individual skin care and protection needs of men, provide
advanced comfort and protection, which helps restore skin to a healthy
balance after shaving.
New Gillette Series Anti-Perspirant and Deodorant:

New Gillette Series Anti-perspirants and Deodorants are premium,
technologically advanced products that deliver long-lasting odor and
wetness protection in a variety of forms that meet the specific application
needs of men.

The Anti-perspirants and Deodorants are available in new Power Stripe
TM
,
Clear Gel, Clear Stick and Invisible Solid Stick forms.

The New Gillette Series Power Stripe is available in three new fragrances:
Surf, Breeze and Frost. The other Anti-perspirant and Deodorant forms are
available in the traditional Gillette Series fragrances: Cool Wave, Wild Rain,
Pacific Light and Arctic Peak.
Gillette MACH3Turbo and Gillette Series will be available to consumers in
North America beginning in April 2002, in food, drug, convenience and
mass merchandise outlets. A global rollout for both products will follow.
Satin Care:

Gillette for Women Satin Care, the first soap-free shaving gel for women,
was introduced in the U.S. in 1995. It is now available in four formulas, and
a nonaerosol version in an innovative soft-touch bottle was introduced in late
1997. As a brand extension, Satin Care deodorants/antiperspirants for
women were introduced in selected international markets in 1998.
Right Guard:

In its original aerosol form, Right Guard deodorant was introduced in 1960
as the first deodorant marketed for the family. Right Guard has been an
important brand, in many forms and variations, for the past 40 years. Right
Guard antiperspirant was added to the line in 1968; first roll-on, in 1975;
first pump, in 1977; Right Guard solid antiperspirant in 1981; and Right
Guard clear gel in 1993. Right Guard Xtreme Sports, designed specifically
for active people, was launched in 2000.
Soft & Dri:

Soft & Dri was launched in 1969 as a non-sting aerosol antiperspirant for
women. A roll-on version was introduced in 1975. Soft & Dri solid, with
twist-up dispenser for durability and ease of application, was introduced in
1982, and a clear gel version was launched in 1994.
Dry Idea:

Dry Idea antiperspirant, a specially formulated roll-on containing almost no
water, was launched in 1978. Solid and aerosol forms of Dry Idea were
introduced in 1985, with a clear gel version in 1994.
MACH3 Turbo:
The Gillette Mach3Turbo, Gillette's next generation triple-blade shaving
system, is the most technologically advanced shaving system in the world.
Extensive testing among men has established conclusively that
MACH3Turbo is the best-performing shaving system ever, significantly
outperforming Gillette's own MACH3, the world's leading razor.
MACH3Turbo provides men with the closest and most comfortable shave
with less irritation, even when shaving against the grain.
The Mach3Turbo shaving system provides a number of important design
features and benefits, including:
Protected by 35 patents, MACH3Turbo combines several innovations,
including new Anti-Friction
TM
blades, an ultra-soft protective
skinguard, a new patented lubrication system and an improved razor
handle.
Three Anti-Friction
TM
blades glide through beard hair with less
resistance than any other blades, for the closest, most comfortable
shave.
The ultra-soft skinguard consists of ten thinner and more flexible
microfins that precede the blades and smooth out the skin, gently
lifting even stubborn hairs before the first blade cuts them.
The Indicator lubricating strip with Vitamin E features a new
patented lubrication system, which releases even more lubrication
over a greater number of shaves, improving razor glide and adding to
shaving comfort. The green stripe fades with use to signal when men
are no longer getting the optimal MACH3Turbo shave.
The MACH3Turbo handle features knurled elastomeric crescents and
metal grooves that provide better handling and control when shaving,
and a sleek, modern design with a titanium-like finish. Superior
forward-pivoting action, housed in the cartridge itself instead of the
blade handle, allows the three blades to glide effortlessly along the
surface of the skin while maintaining their progressive alignment
Open cartridge architecture makes rinsing and cleaning the
MACH3Turbo blades easier than ever; the single-point docking
system--loading the cartridge at one point instead of two--makes it
virtually impossible for consumers to accidentally load a cartridge
upside down.
Independently moving spring-mounted blades sense and adjust to
every contour of the face, adding to the closeness and comfort of the
shave.
The shaving organizer holds both the razor and extra cartridges, stands
on end for convenient storage and packs easily for travel.
Gillette MACH3Turbo and Gillette Series will be available to consumers in
North America beginning in April 2002, in food, drug, convenience and
mass merchandise outlets. A global rollout for both products will follow.


Gillette Mach3:

The Gillette Mach3, the first triple-blade razor was introduced in 1998 and
has become the world's leading razor.
Three independently suspended blades, each equipped with patented
DLC

comfort edges, give you the cleanest and smoothest shave you've ever
experienced. Not only will your shave be more comfortable, you'll also be
able to shave closer in fewer strokes, with less skin irritation especially in
the sensitive neck area.
The Mach3 system provides a number of other important design features and
benefits, including:
Forward pivot - for a closer, more comfortable shave.
Single-point cartridge docking - for easy loading.
Indicator lubricating strip - to let you know when you're no longer
experiencing the optimal Mach3 shave.
Open cartridge architecture - for easy rinsing.
Ergonomic handle design - for improved handling.
Comfort Blades:

The Gillette Company recently introduced Gillette Comfort Blades
improved, thinner blades designed to cut hair more easily than traditional
Gillette blades for an extraordinarily comfortable shave.
Branded with a unique new quality seal, Comfort Blades will be featured
throughout the Company's complete line of twin blade male and female
shaving systems and disposable razors. They will be available in the U.S.,
Canada and Europe beginning in early November 2000, with worldwide
distribution completed in early 2001.
Sensor:


After its unveiling in late 1989 to trade and media, the Gillette Sensor
shaving system was introduced in January 1990 in 16 countries, marking the
Company's first pan-Atlantic product launch. The Sensor system has won
many awards (for product innovation, design, advertising excellence) and
has been accepted into several museum collections.
The Sensor system features twin blades that are individually mounted on
highly responsive springs and that automatically adjust to facial contours.
SensorExcel:


Introduced in 1993, the SensorExcel twin blade cartridge incorporates a
revolutionary skin guard composed of five soft, flexible microfins that
deliver at the time unprecedented shaving closeness and comfort. It
debuted in Western Europe, with a U.S. launch in 1994.
Atra:


The Atra automatic-adjusting twin blade razor and cartridge were introduced
in the U.S. in 1977 and became the best-selling razor in the country that
year. It features a pivoting, rather than fixed, twin blade cartridge head. The
Atra Plus system-- which is the Atra razor, plus the new Lubrasmooth
lubricating strip-- was introduced in 1985.
Trac II:

The world's first twin blade shaving system, lightweight and easy to handle,
Trac II was introduced in 1971. GII, its international version, was introduced
in Germany, its first overseas market, in 1972.
Custom Plus:

The Custom Plus line of twin blade disposable razors for men and women
was introduced in 1994, featuring an improved lubricating strip and longer
handle for greater control.
Good News:

The Good News twin blade men's disposable razor, introduced in 1976,
became the top-selling disposable razor in the U.S. that year and has
remained number one since then. The line has been improved and broadened
several times, including the 1984 launch of Good News Pivot, which
features a moving cartridge head that automatically adjusts to facial
contours.
Gillette for Women Venus:

The new Gillette for Women Venus shaving system combines breakthrough
design with easy storage to redefine the womens shaving experience.
Gillette for Women Sensor:

Introduced in the U.S. midyear 1992, this breakthrough shaving system
became an immediate hit, with sales and market share far surpassing
expectations. By year-end 1992, it was the country's top-selling razor. The
Gillette for Women Sensor system combines the technological innovation of
the Sensor cartridge with a unique razor and lubricating strip specifically
designed to meet women's shaving needs.
Gillette for Women SensorExcel:

Introduced in 1996, the Gillette for Women SensorExcel combines the
innovative design of the Gillette for Women Sensor razor with cartridges
featuring five flexible microfins for a close, comfortable shave.
Gillette for Women Agility:

Introduced in late 1997, this twin blade disposable razor for women features
a lubricating strip and new handle design for greater control and
maneuverability.
Gillette for Women Daisy:

The first version of this disposable razor for women was introduced in 1975.
Daisy Slim was introduced in 1991, featuring a slimmer shaving cartridge
and a Lubrasmooth lubricating strip.
Appliances Household:

Braun offers a wide array of distinctive kitchen appliances, including food
processors, handblenders, coffee makers and grinders, press and spin juicers,
water kettles and steam irons. Braun holds the number one position
worldwide in the large handblender market
HairCare:

The Braun hair care appliance business, a leader in Europe, consists of a range of top-selling
hair dryers, as well as hair stylers in both electric and cordless models.
Duracell CopperTop:

Quality that lasts! Duracell's most popular alkaline battery in the world is
now even better. Duracell has incorporated select breakthrough technologies
used in the original DURACELL ULTRA and put them into the new and
improved DURACELL to give it increased performance and dependability-
all at an excellent value.
The CopperTop is best suited when you need reliable, long-lasting life from
your everyday devices like remote controls, toys, personal stereos,
flashlights, radios and pagers.
In tests, the new and improved DURACELL has shown up to a 125%
increase in performance compared to original DURACELL Batteries!
Duracell Ultra:

DURACELL ULTRA with M3 Technology is the most powerful
DURACELL Alkaline Battery ever made especially in high drain devices.
The secret is in the revolutionary M3 Technology:
MORE FUEL Packed with even more active ingredients
MORE EFFICIENCY Reformulated to improve electron flow
MORE POWER Devices run longer and work better
As for performance, you'll get faster flashes from your camera*, brighter
light from your halogen flashlights*, and more music from your super
boombox*. The more features a device has, the more power it requires to
run.
All DURACELL ULTRA Alkaline Batteries come with PowerCheck
TM
,
Duracell's patented battery tester, which lets you know when it's time to buy
more DURACELL Batteries.
Oral-B:

Recognized worldwide for its outstanding oral care products, Oral-B is the
leader in the fast-growing global toothbrush market.
Oral-B toothbrushes, the foundation and largest category of Oral-B's thriving
oral care business, are the brand used by more dentists and consumers than
any other in the U.S. and many major international markets.
For adults, key brands include the new premium performance Oral-B
CrossAction toothbrush, as well as top-selling Oral-B Advantage Control
Grip toothbrushes. Oral-B is also the market leader in children's
toothbrushes, including Oral-B Stages, Blues Clues, Nickelodeon, Rugrats
and Sesame Street models.


Oral-B Stages:

Developed by Oral-B with the input of hundreds of pediatric dental
professionals, parents and children, Oral-B Stages recognizes that oral care
needs evolve dramatically as children grow. Differences in the development
of teeth and gums, in motor skills and coordination, and in levels of
motivation and interest inspired Oral-B to design toothbrushes for children
at four key stages: four to 24 months (Stage 1), two to four years (Stage 2),
five to seven years (Stage 3) and eight years and up (Stage 4).
Each Oral-B Stages toothbrush addresses the 3Ds of childrens oral care:
dentition, dexterity and development.
Dentition - The specific characteristics of a child's jaw and teeth.
Each Oral-B Stages toothbrush features a brush head and bristle
configuration that addresses such dental developments as teething, the
transition from baby teeth to permanent teeth and the growth of the jaw
and mouth.
Dexterity - A childs ability to effectively reach and clean different
areas of his or her mouth. Handle sizes are designed to suit a childs hands,
while handle configurations and non-slip grips improve dexterity and
reach.
Development - The factors that motivate children to brush. Brush
colors, shapes and designs -- and the exclusive use of beloved Disney
characters such as Winnie the Pooh, Mickey Mouse, Buzz Lightyear and the
Disney Princesses -- make brushing fun and exciting.
Oral-B CrossAction:

The Oral-B CrossAction premium performance toothbrush is clinically
proven (in one-time brushing studies) to remove more plaque than today's
leading toothbrushes. It makes a bold departure from traditional vertical-
bristle toothbrush design with its unique CrissCross bristles angled in
opposing directions.
More Angles, More Action, More Effective:

Consumers want a toothbrush that does the best cleaning job - one that most
effectively removes plaque, the bacterial film that causes tooth decay and
gum disease. Until the Oral-B CrossAction, no leading toothbrush had
claimed to remove more plaque than other leading toothbrushes. Then Oral-
B developed a breakthrough design giving the CrossAction toothbrush
measurably superior plaque removal capability over today's leading
toothbrushes.
The CrossAction toothbrush combines Oral-B's latest, proprietary advances
with several trademark bristle features. The CrossAction features four types
of specialized bristle tufts:
Raised, thin, green CrissCross bristles, which work in opposing
directions, actively penetrate between teeth and along the gum line to
provide a more effective brush stroke.
Patented Micro-Textured bristles (first introduced by Oral-B in 1996)
are designed for whole-bristle cleaning, to remove plaque with the
sides as well as tips of the bristles.
Patented wear-sensitive blue Indicator bristles (a 1991 Oral-B
innovation) fade to signal the need for toothbrush replacement.
Extended, dense Power Tip bristles reach to clean back teeth.
The Oral-B CrossAction toothbrush is available in four colors: teal, mint
green, sky blue, and azure. Consumers can also choose from three different
brushhead sizes: 35 (compact), 40 (regular), and 60 (full). And between two
levels of bristle stiffness: soft and medium.
For more information on Oral-B products
visit http://www.oralb.com/ orhttp://www.oralbkids.com/.

Braun Oral-B 3D:

The Braun Oral-B 3D plaque remover is the first product to combine two
distinct brushing motions high-speed pulsations with ultra-speed
oscillations to create a unique three-dimensional brushing action.
The brushhead pulsates in and out at 20,000 movements per minute to gently
loosen plaque, while the side-to-side oscillations at 7,600 movements per
minute sweep the plaque away. The result is gentle, deep cleaning clinically
proven to be superior to a manual toothbrush in removing plaque and in
reducing gingivitis.
The Braun Oral-B 3D plaque remover comes with numerous features
designed to enhance safety, effectiveness and convenience:
Blue FlexiSoft bristles in the center of the brush utilize a spring-like
ability to give way under pressure. This optimizes brushing action by
cupping around teeth and allowing the interdental tips to reach more
deeply into the areas between teeth.
The brushhead's interdental tips feature Indicator bristles whose color
fades with use, signaling the proper time to replace the brushhead.
A pressure sensor automatically stops the plaque remover's pulsations
when users apply more pressure than necessary for optimal cleaning.
A memory timer memorizes elapsed brushing time - even if briefly
interrupted - and signals after two minutes of actual brushing time, as
recommended by dentists.
Other features include a control grip, a hygienic brushhead storage
compartment, and an environmentally-friendly battery.


BOARD OF DIRECTORS:
Warren E. Buffett,
Chairman and Chief Executive Officer, Berkshire Hathaway Inc.
Edward F. DeGraan,
President and Chief Operating Officer, The Gillette Company
Wilbur H. Gantz,
Chairman and Chief Executive Officer, PathoGenesis Corporation
Michael B. Gifford,
Former Chief Executive, The Rank Organisation Plc
Carol R. Goldberg,
President, The Avcar Group, Ltd.
Dennis F. Hightower,
Former Chief Executive Officer, Europe Online Networks, S.A.
Herbert H. Jacobi,
Chairman of the Supervisory Board, HSBC Trinkaus & Burkhardt KGaA
James M. Kilts,
Chairman of the Board and Chief Executive Officer, The Gillette Company
Henry R. Kravis,
General Partner, Kohlberg Kravis Roberts & Co., L.P.
Jorge Paulo Lemann,
General Partner, GP Investimentos
Richard R. Pivirotto,
President, Richard R. Pivirotto Co., Inc.
Marjorie M. Yang,
Chairman, Esquel Group of Companies
Chairman of the Board and Chief Executive Officer:
James M. Kilts
President and Chief Operating Officer
Edward F. DeGraan
Senior Vice Presidents
Charles W. Cramb Finance
Edward E. Guillet - Human Resources
Peter Klein - Strategy and Business Development
John F. Manfredi - Corporate Affairs
Richard K. Willard - Legal and General Counsel


ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS:
RESULTS OF OPERATIONS:
Discontinued Operations:

Effective June 30, 2000, the Company decided to sell the Stationery
Products business. As a result, this business is accounted for as a
discontinued operation in the financial statements. The sale of the business
to Newell Rubbermaid Inc. was finalized on December 29, 2000. The after-
tax loss on the disposal of the business was $428 million, and the after-tax
loss from discontinued operations, up to the measurement date of June 30,
2000, was $1 million. The loss on the disposal of the business includes a
charge for direct transaction costs, employee severance, assets not
transferable and disposed of and for other employee benefits, including
fringe benefits, outplacement fees and special termination benefits related to
pensions. Additional details are provided in the Notes to Consolidated
Financial Statements.
Net Sales:

Net sales from continuing operations in 2000 were $9.30 billion, 2% above
those of 1999. Excluding the adverse effects of exchange, 5%, and the
divestiture of the White Rain hair care line, 1%, sales climbed 8%. The 8%
sales growth was attributable to favorable volume/mix of 6% and pricing of
2%, as increased marketing support contributed to good volume growth
across all categories, except Duracell. Net sales in 1999 were $9.15 billion,
essentially even with those of 1998. Pricing contributed 3% and volume/mix
1%, favorable factors that were offset by 4% unfavorable exchange.
Excluding the adverse effects of exchange and the 1998 divestiture of Jafra
Cosmetics International, sales rose 5%.
An analysis of sales by business segment for continuing operations follows.
Sales of blades and razors were 8% higher than those of the prior year, due
primarily to strong sales of the Mach3 shaving system in North America,
Europe and Latin America. In Europe, sales were aided by a 39% increase in
Mach3 cartridge shipments. Sales in Latin America were boosted by the
successful launch of the Mach3 system in Brazil. In 1999, blade and razor
sales were 5% above those of a year earlier, buoyed by the Mach3 shaving
system, which was launched in all major markets, except Brazil, by year-end
1999. Sales in North America, reflecting the steady growth of the Mach3
system, were 14% above those of 1998. The Companys trade inventory
reduction initiative contributed to lower sales in Europe and Latin America.
Toiletries sales were 8% below those of the prior year, due primarily to the
divestiture of the White Rain brand in April 2000. Sales of pre- and post-
shave products were 6% above those of the year before. In 1999, toiletries
sales were 13% below those of the previous year, due in part to the
divestiture of the Jafra business in April 1998. Excluding Jafra, toiletries
sales declined 7%.
Sales of Duracell products declined 5%, as a 37% increase in sales of
Duracell Ultra batteries was more than offset by lower sales of both
Copper & Black and non-Duracell branded batteries.
Contributing to the lower sales were increased competition faced by the
Copper & Black brand in North America, depreciation of the Euro and lower
overall battery sales in Korea, as well as low-priced alkaline competition in
China. In 1999, sales of Duracell products rose 6%, led by a 15% sales gain
in North America that reflected improved volume/mix in a period of
heightened consumer activity due to Year 2000 concerns. Higher volume in
the AMEE region and better mix in the Asia-Pacific region also contributed
to the increase in Duracell sales in 1999.
Sales of Oral-B products were 10% above those of 1999. Sales growth,
which was achieved in all geographies except Europe, was paced by Latin
America, where economic conditions improved and the rollout of the
premium CrossAction toothbrush to the regions largest markets was
completed. In North America, sales growth also reflected new product
activity, including the third-quarter launch of the Oral-B Advantage Plus
toothbrush. In 1999, sales of Oral-B products were 4% below those of a year
earlier. Gains in North America, driven by the success of the CrossAction
toothbrush, were more than offset by shortfalls in Latin America that
resulted from the regions economic weakness.
Braun sales rose 5% from those of 1999. Aided by broad-based advertising
support for core product categories, sales increases were achieved across all
geographies except Europe, where sales were restrained by the depreciation
of the Euro. Sales of the Braun Syncro electric shaver drove growth in
Germany and Japan, while improving economic conditions and increased
distribution led to strong advances in the AMEE region and Latin America.
Sales in 1999 were 9% below those of the year before, due to economic
softness in Europe and lower sales in North America.
Gross Profit:

Gross profit from continuing operations was $5.91 billion in 2000, $5.76
billion in 1999 and $5.70 billion in 1998. As a percent of sales, gross profit
was 63.6% in 2000, compared with 62.9% in 1999 and 62.0% in 1998.
Margin improvement in both years was due to several factors: favorable
sales mix; continued manufacturing efficiencies; and the benefit to our
product cost structure of savings from the 1998 reorganization and
realignment program.
Selling, General and Administrative Expenses:

Selling, general and administrative expenses from continuing operations
amounted to 41.2% of sales, compared with 40.1% and 37.9% in 1999 and
1998, respectively. In absolute terms, these expenses increased 4% in 2000
and 5% in 1999. In 2000, $608 million was spent on advertising, including
sampling, and $1,268 million on sales promotion, for a total of $1,876
million, an increase of 12% over the 1999 spending level. This spending
compares with 1999 amounts of $580 million, $1,087 million and $1,667
million, respectively. In 1998, these amounts were $593 million, $1,055
million and $1,648 million, respectively. The spending in 2000 represented
20.2% of sales, compared with 18.2% and 17.9% in 1999 and 1998,
respectively. Other operating expenses declined 3% in 2000, reflecting a full
year of benefits from the reorganization and realignment program, and
increased 9% in 1999.
Profit from Operations:

Profit from continuing operations was $1.51 billion in 2000, compared with
$2.09 billion in 1999 and $1.78 billion in 1998. Profit from operations in
2000 was $2.08 billion before a restructuring and asset impairment charge of
$572 million. Profit from operations in 1998 was $2.22 billion before a
reorganization and realignment charge of $440 million. Profit from
operations in 2000 represented 22.4% of sales, compared with 22.8% in
1999 and 24.1% in 1998, excluding the restructuring and asset impairment
charge in 2000 and the reorganization and realignment charge in 1998.
Operating profits in 2000 were almost even with those of 1999, as improved
gross profit margin and cost savings from other operating expenses were
offset by significant increases in marketing expenses. The decrease in
operating profits in 1999 was due to a $30 million increase in marketing
support and a $14 million increase in research and development for new
product programs. Further, the Company incurred $61 million of
incremental expenses related to the reorganization and realignment program,
primarily for equipment and employee relocation and training. These
expenses were not included as part of the original reserve, due to the
requirements of the accounting standards. In addition, a gain of $22 million
on the sale of land and a building was recognized in 1999.
In the following table, the 2000 restructuring and asset impairment charge
and the 1998 reorganization and realignment charge are included in
Corporate / Other.
An analysis of operating profit by business segment for continuing
operations follows.
Blade and razor profits were 11% higher in 2000, due primarily to the sales
growth of the Mach3 shaving system in North America, Europe and Latin
America. Blade and razor profits were 5% higher in 1999, due to the sales
growth of the Mach3 shaving system.
Toiletries profits were 11% below those of the prior year, in line with lower
sales. Toiletries profits in 1999 were 57% above those of the previous year,
due to unmatched new product launch expenses in 1998.
Duracell profit from operations was 28% below that of the year before,
reflecting both lower sales and increased marketing spending and related
strategic actions in North America designed to regain market share, restore
growth momentum and increase profitability. In 1999, Duracell reported
profits 2% above those of the previous year, reflecting higher marketing
expenses behind the geographic rollout of Duracell Ultra batteries and
increased promotional support in North America.
Oral-B profit from operations was 3% below that of 1999, due primarily to
higher marketing expenses to support new product launches. In 1999, Oral-B
profits declined 24%, due to marketing expenses supporting the CrossAction
toothbrush launch in North America and Europe.
Braun profit from operations was 41% above that of 1999, reflecting sales
growth, improved mix and lower overhead expenses. Braun profits were
$154 million in 1999, compared with $291 million in 1998, primarily the
result of lower revenue to cover fixed costs.
Non-operating Charges / Income:

Net interest expense amounted to $218 million in 2000, $129 million in
1999 and $86 million in 1998. Net interest expense rose in 2000, reflecting
increased borrowings to fund the share repurchase program and higher
interest rates. Net interest expense rose in 1999, due to higher borrowings to
fund the Companys share repurchase program. A net exchange gain of $8
million in 2000, which compared with 1999 and 1998 losses of $35 million
and $23 million, respectively, was due primarily to subsidiaries in highly
inflationary countries. Translation adjustments resulting from currency
fluctuations of net foreign investments in non-highly inflationary countries
are accumulated in a separate section of stockholders equity, as noted on
page 30. In 2000, the unfavorable translation adjustment was $249 million,
compared with $205 million in 1999 and $36 million in 1998, reflecting
significant exchange rate movements.
Taxes and Income From Continuing Operations:

The effective tax rate was 36.3% in 2000, compared with rates of 34.8% in
1999 and 35.3% in 1998. The effective tax rate increased in 2000, due to the
non-deductibility of certain asset impairment charges. Excluding the impact
of these nondeductible charges, the tax rate declined to 32.8%. The decrease
was primarily attributable to the reduction of the tax rate in Germany and the
Companys tax management strategies.
Income from continuing operations was $821 million in 2000, compared
with $1,248 million in 1999 and $1,073 million in 1998. Fully diluted net
income per common share from continuing operations was $.77 in 2000,
compared with $1.13 and $.94 in 1999 and 1998, respectively.
Excluding the charges in 2000 for restructuring and asset impairment and in
1998 for reorganization and realignment, income from continuing operations
was $1,251 million in 2000, compared with $1,248 million in 1999 and
$1,358 million in 1998. Fully diluted net income per common share from
continuing operations was $1.18 in 2000, compared with $1.13 and $1.19 in
1999 and 1998, respectively.
Financial Condition:

The Companys financial condition continued to be strong in 2000. Net debt
(total debt net of associated swaps, less cash and cash equivalents) decreased
$82 million during 2000, despite additional spending under the Companys
share repurchase program, due to improved cash flow from operations,
proceeds from the sale of the Stationery Products business and the favorable
exchange impact on foreign currency debt. Net debt at December 31, 2000,
amounted to $4.45 billion, compared with $4.53 billion and $3.18 billion at
December 31, 1999 and 1998, respectively. The market value of Gillette
equity was $38 billion at the end of 2000, compared with $43 billion at the
end of 1999. The Companys book equity position amounted to $1.92 billion
at the end of 2000, compared with $3.06 billion at the end of 1999 and $4.54
billion at the end of 1998. The decreases in book equity in 2000 and 1999
were due primarily to the Gillette share repurchase program, as well as to the
effect of foreign currency translation.
Net cash provided by operating activities in 2000 was $1.60 billion,
compared with $1.43 billion in 1999 and $.96 billion in 1998. The current
ratio of the Company was .86 for 2000, compared with ratios of 1.39 for
1999 and 1.40 for 1998. The decrease in the 2000 current ratio was primarily
attributable to the Companys reclassification of all commercial paper
borrowings to short-term debt, due to the Companys credit facility
agreements expiring within 2001. Capital spending in 2000 amounted to
$793 million, compared with $889 million in 1999 and $952 million in
1998. Spending in all three years reflected substantial investments in the
blade and razor, Duracell and Braun Products segments.
In 2000, the Company sold the Stationery Products business for $528
million. In 1998, the Company made acquisitions in the Duracell Products
segment for $100 million and sold the Jafra business for $200 million.
Share repurchase funding in 2000, net of proceeds received from the sale of
put options on Company stock, amounted to $921 million, compared with
$1,949 million in 1999 and $1,010 million in 1998.
Strong cash inflows from operations, proceeds from the sale of the
Stationery Products business and alternate financing sources enabled the
Company to reduce its $2.0 billion revolving credit facility in 2000 to $1.4
billion, expiring October 2001, and its $1.1 billion credit facility, expiring
December 2001, to $550 million in January 2001. Both facilities are used by
the Company to complement its commercial paper program.
In order to increase flexibility in sourcing short-term borrowing, the
Company launched a $1 billion Euro commercial paper program in 2000. At
year-end 2000, there was $586 million outstanding under this program and
$1.45 billion outstanding under the U.S. program, compared with $2.41
billion at the end of 1999 and $1.66 billion at the end of 1998.
During 2000, the Company issued Euro-denominated notes for $228 million,
due December 2002, and entered into a $264 million Euro-denominated debt
obligation, with redemption rights in December 2001. During 1999, the
Company issued Euro-denominated notes for $343 million, due February
2004, and entered into a $325 million Euro-denominated debt obligation,
with redemption rights in March 2002, and a $437 million Euro-
denominated debt obligation, with redemption rights in January 2003. The
net proceeds were used to refinance existing short-term debt associated with
the Companys share repurchase program.
During 2000, both Standard & Poors and Moodys maintained the
Companys current credit ratings. Standard & Poors rates the Companys
long-term debt at AA, while Moodys rating is Aa3. The commercial paper
rating is A1+ by Standard & Poors and P1 by Moodys.
Gillette will continue to have capital available for growth through both
internally generated funds and significant credit resources. The Company
has substantial unused lines of credit and access to worldwide financial
market sources for funds.
Market Risk:

The Company is subject to currency and interest rate risks that arise from
normal business operations. The Company regularly assesses these risks and
has established business strategies that offset exposures, supplemented by
the use of financial instruments, to protect against the adverse effects of
these and other market risks.
To manage the impact of currency changes on foreign-denominated profits,
the Company primarily uses product sourcing and pricing strategies,
supplemented by purchases of foreign currency options when considered
appropriate.
The Company uses foreign-denominated debt and forward contracts to
hedge the impact of currency changes on its net foreign investments,
normally in currencies with low interest rates.
Most of the Companys transactional exchange exposure is concentrated
through centralized cash management and inter-company invoicing. The
Company hedges net residual transactional exchange exposures primarily
through forward contracts.
The Company uses primarily floating rate debt in order to match interest
costs to the impact of inflation on earnings. The Company manages its mix
of fixed and floating rate debt by entering into interest rate swaps.
More detailed information about the strategies, policies and use of derivative
financial instruments is provided in the financial instruments note. The
Company has established clear policies, procedures and internal controls
governing the use of derivative financial instruments and does not use them
for trading, investment or other speculative purposes. Financial instrument
positions are monitored using a value-at-risk model. Value at risk is
estimated for each instrument based on historical volatility of market rates
and a 95% confidence level.
Based on the Companys overall evaluation of its market risk exposures
from all of its financial instruments at December 31, 2000 and 1999, a near-
term change in market rates would not materially affect the consolidated
financial position, results of operations or cash flows of the Company.
Restructuring and Asset Impairments:

On December 18, 2000, the Company announced a restructuring program
and impaired certain intangible assets. This resulted in a fourth-quarter
charge to operations of $572 million ($430 million after taxes, or $.41 in net
income per common share, fully diluted).
The worldwide restructuring of operations is expected to significantly
improve the Companys operating efficiency, streamline the supply chain
and further decrease costs. The program will result in a net reduction of
approximately 2,700 employees across all business functions, operating
units and geographies.
Pretax cash outlays are estimated at approximately $235 million. Cash
severance payments may extend beyond 2001, due to the severance payment
deferral options available to terminated employees. When the program is
fully implemented by the end of 2001, the annual pretax savings will
approximate $125 million.
Specific program activities include consolidating management functions;
reducing factory locations, in part through outsourcing production of low-
volume non-core products; streamlining the supply chain via warehouse
consolidation and other actions; and downsizing and centralizing corporate
functions. These actions will result in the closure of eight factories and 13
distribution centers and will be completed within 12 months.
The amount of impairment is approximately $125 million for the
restructuring and closure of factories and distribution centers, as well as the
write-off of manufacturing, distribution and office equipment assets. Until
the affected facilities cease operations, revenue-generating activities will
continue. Buildings that are owned will be sold, and equipment will be
disposed of through either sale or abandonment. The extent of the
impairment was based on discounted cash flow analyses for the operating
period up until closure and included an estimate of residual value.
In addition, the charge included $212 million for the write-down of impaired
goodwill relating to certain under-performing brands. This write-down was
determined based upon a year-end impairment analysis necessitated by new
evidence that indicated that the carrying amounts of the assets relating to the
Thermoscan personal diagnostic appliance brand and certain national battery
brands might not be fully recovered through undiscounted future operating
cash flows. Such analysis indicated that impairment existed equivalent to the
carrying amount of the acquired goodwill for one brand in the Braun
Products segment, and the carrying amount of the acquired goodwill and
identifiable intangible assets for certain brands in the Duracell Products
segment. This analysis did not indicate impairment of the carrying amounts
of any related tangible long-lived assets associated with these under-
performing brands.
Additional details are provided in the Notes to Consolidated Financial
Statements.
Reorganization and Realignment:

On September 28, 1998, the Company announced a reorganization and
realignment program that resulted in a third-quarter charge to operations, for
the total program, of $535 million ($347 million after taxes, or $.30 income
per common share, fully diluted). For continuing operations, the charge to
operations was $440 million ($285 million after taxes, or $.25 in net income
per common share, fully diluted).
The total program resulted in the closure of 14 factories, 13 warehouses and
34 office facilities, as well as a reduction of 4,623 employees across all
business segments, geographies and employee groups. Activity in 2000
consisted of the closing of three factories, two warehouses and five office
facilities, as well as a reduction of 1,173 employees. Project activity was
essentially complete at March 31, 2000.
Pretax cash outlays were $16 million in 1998, $197 million in 1999 and
$113 million in 2000. Cash severance payments extended beyond the
completion of program activities, due to the severance payment deferral
options available to terminated employees. In 2000, cash benefits generated
from the program were in line with original estimates.
Additional reorganization and realignment details are provided in the Notes
to Consolidated Financial Statements.
Euro Conversion:

A multifunctional Euro project team is responsible for ensuring the
Companys ability to operate effectively during the Euro transition phase
and through final Euro conversion. Total program costs are not expected to
be material. Among other factors, conversion to the Euro may affect
competition between markets, due to the existing pricing structure. The
Company has developed marketing and pricing strategies for
implementation throughout the more open European market. The Euro
project team will further enhance these strategies as part of the ongoing Euro
initiative. The Company is currently able to make and receive payments in
Euros and will convert financial and information technology systems to be
able to use Euros as its base currency in relevant markets prior to January 1,
2002. Based on the analysis and actions taken to date, the Company does not
expect the Euro conversion to materially affect the consolidated financial
position, results of operations or cash flows of the Company.
Responsibility for Financial Statements:
The Company is responsible for the objectivity and integrity of the
accompanying consolidated financial statements, which have been prepared
in conformity with accounting principles generally accepted in the United
States. The financial statements of necessity include the Companys
estimates and judgments relating to matters not concluded by year-end.
Financial information contained elsewhere in the 2000 Annual Report and
Form 10-K is consistent with that included in the financial statements.
The Company maintains a system of internal accounting controls that
includes careful selection and development of employees, division of duties,
and written accounting and operating policies and procedures augmented by
a continuing internal audit program. Although there are inherent limitations
to the effectiveness of any system of accounting controls, the Company
believes that its system provides reasonable, but not absolute, assurance that
its assets are safeguarded from unauthorized use or disposition and that its
accounting records are sufficiently reliable to permit the preparation of
financial statements that conform in all material respects with accounting
principles generally accepted in the United States.
KPMG LLP, independent auditors, are engaged to render an independent
opinion regarding the fair presentation in the financial statements of the
Companys financial condition and operating results. Their report appears on
page 23. Their examination was made in accordance with auditing standards
generally accepted in the United States and included a review of the system
of internal accounting controls to the extent they considered necessary to
determine the audit procedures required to support their opinion.
The Audit Committee of the Board of Directors is composed solely of
independent directors, as defined by the New York Stock Exchange. The
Committee meets periodically and privately with the independent auditors,
internal auditors and financial officers of the Company, as it deems
necessary, to review the quality of the financial reporting of the Company,
the internal accounting controls and the scope and results of audit
examinations. The Committee also reviews compliance with the Companys
policies relating to proper accounting and financial reporting systems and
the independence of the independent auditors. In addition, the Committee is
responsible for recommending the appointment of the Companys
independent auditors.


SWOT ANALYSIS:
Strengths:
They are undisputed market leader as they have the greatest market
share all over the world.
They have been performing for more than hundred years so they have
very sound goodwill in the market.
They have a very big distribution system. Their products are sold all
over the world and people purchase their products by asking the
name of Gillette.
Their research and development centers are very efficient effective.
They are very innovative. All the time they are introducing new
differentiated products with high quality and more customer
satisfaction.
They are financially very strong.
They provide quality products.
They have very experienced and expert staff which serves as a
competitive advantage in the market.
Their advertising campaigns are very attractive and customer attention
seeking.
They focus target markets.
They are very much concerned about their customers.
They have close relationship with their customers.
They have diversified business with 85 product categories that reduces
risk and increases profitability.
Good displays and presentation of their products in Retail Stores make
them prominent among their competitors.
They have a very formalized system for getting the feedback of the
customers.
They upgrade their products according to the changing environment
keeping in view their customers need. For example, they launched
shaving foams, dry shaving systems which are time efficient and easy
to use.
They are very much strict in their values and their management gives
value to the organization.
They take maximum social responsibilities for environment and
society. In this way, they contribute a lot to the society. They are
highly appreciated in their social contribution.
They have no head to head competition in the market.
They have latest inventory management system, which is all
computerized. As the inventory of the stock touches to the lower limit
through computers. Reorder point is easily indicated.
The company believes on total quality management and try to add
value in their products at each and every step.
They have open and strong communication system which helps their
stakeholders to get informed every time.
Weaknesses:
They lack low price products.
They are ignoring the underworld countries and developing countries,
which may be a greatest source of generating revenue.
Buying capacity of Gillette products is low in many areas.
They are ignoring niche markets. For example, they have not focused
on designing their products according to the specifications of
commercial shaving services centers.
They have not given attention to Muslim community who need some
special type of razors for trimming their beards.
Due to smuggling effect, the distribution system is very much disturbed
in various countries. As Gillettes most of the products are lighter in
weight and smaller in volume, smuggling process is easier.
Opportunities:
Today, consumers around the world are embracing a growing number
of portable digital electronic devices that require high-power
batteries. Enhancing its growth prospects, Duracell offers strategic
power-consulting services to leading device manufacturers to further
the inclusion of alkaline batteries as a power source in these
increasingly popular consumer devices. More than 75% of the worlds
consumers of portable power use less costly zinc carbon batteries,
rather than better performing alkaline. Once converted to Duracell
alkaline batteries, these consumers can then trade up to the advanced
technologies and premium performance of the Duracell Ultra brand.
So this will be the great opportunity in future.
Another large global business offering sizable growth opportunities for
the Company is oral care. It has been Gillettes fastest-growing
business in recent years. Oral care offers a comparable opportunity as
consumers trade up from regular Oral-b manual toothbrushes to the
premium priced CrossAction toothbrush, and then move on to power
assisted Braun Oral-B plaque removers which generate a highly
profitable refill brush-head business.
They have high margin for diversifiable business because they are
always committed to high quality products and people know it very
well whenever they launch a new product or start a new business.
They take good response by the people due to their hundred years
goodwill.
They have lot of opportunities if they expand their business as forward
integration. For example, customer services by providing them
cartridges and maintenance facilities.
Threats:
As their products are distributed globally, every country has its own
rules and regulations about taxation and custom duties which may
disturb the companys pricing policies and consumer may be facing
extra ordinary contradiction in pricing at different places. This is a
threat for companys products selling.
In Islam, shaving of beard is forbidden so the growing Islamic Culture
may be a threat in their way.
Open market operation is becoming a threat for Gillette Company as
they are quoting different prices in different regions of the world so
people purchase their stock in bulk from the countries where they
have to pay minimum price and they black market their products.
Dollar value is unstable in relation with other countries currency
conversions which disturbs pricing of the companys products. Due to
worst political conditions all over the world, the economic activity
and economic stability is in trouble which may become a threat to
companys future policies.


SUGGESTIONS:
They have manufacturing units in limited countries but they should
have manufacturing units in other countries also. This may help them
in getting success in the business by reducing transportation cost and
getting other benefits also.
They should introduce low price and medium quality products so that
lower economic community may also enjoy their products.
They should also take into consideration their target market for lower
income people.
They should come up with better promotional programs for the
identification of their products blended with advisory services for
their consumers through electronic media, in which they may give
solutions to their health problems and the remedy by the Gillette
products.
They should also consider niche markets and make product for small
markets too.
They should form their own feedback system for getting information
from the customers. For example, through Internet media, it will be
quick, easy, efficient, effective and direct responding.