Gillette’s Billion-Dollar Business Case Study

Gilette is one such brand that you have almost certainly heard of, either through your parents, friends, or various commercials.

King Camp Gillette and his fantastic razor were the first innovators of the grooming and barbershop industries.

Gilette razor production began in 1903, and on November 15, 1904, Gillette received his patent.

Everyone is familiar with Gillette's business model.

The Razor Blade Model entails giving away or heavily discounting a core product in the hopes that customers will purchase the more expensive dependent products.

The razor-blade model is a straightforward pricing strategy in which a dependent good is sold at a loss (or at cost) while the profits are generated by a linked consumable good.

The razor and blades business model is intended to generate consistent, recurring revenue by tying a customer for an extended period of time to a platform or proprietary technology.

The greatest threat to the razor and blades business model is competition.

Companies in various industries have long used razor-and-blades pricing to lock in customers.

Financing (rather than price), value proposition, and value delivery innovations have the potential to disrupt the razor-and-blades pricing strategy.

Gillette’s Billion-Dollar Business Case Study