During the 1970’s, BIC entered the U.S. market with a disposable razors and basically destroyed the market for the rather unchanged Gillette razor. As a result, Gillette went into the disposable razor market aggressively.
But over the next 20 years, disposable razors became a commodity business where price ruled and Gillette’s profits fell so dramatically that it aggressively diversified while attempting to come up with a differentiated razor product.
Gillette invested 10% of its then-annual sales of $10 billion in developing and bringing to market the the Mach 3 razor system that used cartridges of 3 spring loaded blades. These yielded major improvements in the three factors its customers considered highly important: 1) speed of shaving, 2) quality of the shave and 3) lack of nicks and cuts.
During 2009, Gillette introduced the Mach 3 which was a tremendous success, generating $1 billion sales worldwide in the following 18 months.