Gillette's Restructuring in India
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Case Code: BSTR129 Case Length: 15 Pages Period: 1984-2004 Pub Date: 2004 Teaching Note: Available |
Price: Rs.400 Organization: Gillette India Ltd. Industry: Consumer Products Countries: India Themes: Corporate Restructuring |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
With manufacturing plants in 51 locations in 20 countries, Gillette catered to the need of more than 200 countries around the world. Globally, Gillette's portfolio of brands was organized into five business units: Blades and Razors, Personal Care, Oral Care, Duracell, Braun. (Refer Exhibit IV).
It was the market leader in alkaline batteries, toothbrushes and oral care appliances. Gillette started its Indian operations through a joint venture with the Kolkata- based Poddars in 1984. The venture was called the Indian Shaving Products Limited (ISPL) and Gillette had a minority stake of 24% in ISPL. In 1985, ISPL came out with an IPO for funding its manufacturing operations. ISPL's commercial production started in 1986 with the 7 O' Clock brand. Gillette increased the equity stake in ISPL from 24% to 40% in 1989 and further to 51% in 1993. It was with the launch of the Gillette Presto Readyshaver in 1993 that ISPL started selling products under the Gillette brand name.
Till then, ISPL was marketing products under the 7 O' Clock brand. In 1996, the Gillette Company started Gillette Diversified Operations Private Limited (GDOPL) in India to market the electrical and kitchen appliance brand, Braun. The merger of ISPL, Duracell India Limited7 and Wilkinson Sword India Ltd8 in 2000 resulted in the formation of GIL.
By 2002, Gillette had a stake of 75 per cent in GIL. The equity capital of GIL was Rs 325.9 million with Gillette holding 45 per cent. Another 30 per cent was owned through the investment vehicle, Gillette Group India Private Limited (GGIPL), thereby making the total group stake in GIL 75 per cent. The remaining shares were owned by the Poddar group and the general public. GIL had manufacturing units for razors and blades in Bhiwadi (Rajasthan) and Mysore (Karnataka), and one for oral care in Chennai (Tamil Nadu). Gillette Presto, Sensor Excel, Gillette Mach 3, Gillette Mach 3 Power and Gillette Series Shaving Gel were GIL's brands in the grooming segment. The grooming and oral care business contributed the bulk of the company's profits (Refer Exhibit V).
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