Marketing Management E2 Adolfo del Río Dutú

1_INTRODUCTION

1.1. Short description of the company

Bic is a world leader company in stationery, lighters

and shavers. That family-owned company based in
Clichy (France), was founded in 1945 by Baron
Marcel Bich. The first product of the company, the
Bic Cristal Pen, revolutionized the pen industry being
a new benchmark for pen industry. The Bic pen is
cheap and an easy-use pen.

Société Bic S.A. is a multinational company with more than 1.500 employees and a Net
income of €249,7 million. The current CEO is Gonzalve Bich since 2018.

1.2.Brands

Bic has different types of products such as pens, shavers and lighters. However, there are
different types of Bic brands in the stationery industry.

- Tipp-Ex
- Wite-out
- Cello
- Kids
- Conté
- Graphic

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1.3.Strategic Business Unit and Product Market

A Strategic Business Unit is composed from one to several Product-Market satisfying a

common need of the market or a group of different needs. In Bic case, the strategic
business unit is composed by all these low manufacturing costs that allow the company
offer simple product like a pen or a shaver with a very cheap price. Bic offers products
that a common customer normally uses every day taking advantage of the low costs and
the simple designs in order to establish low sales prices.

This SBU is composed by lighters, shavers and stationery.

The Product-Market can be explained following three questions: What, Who and How.

WHAT

Bic offers different products for the consumers:

- Cristal Pens, markers and all kind of stationery.

- Modern design lighters.
- Flex razor than delivers up to 10 shaves.

The objective of the company is offer to the customer cheap products with high quality
that are normally used every day. Lighters, pens and razors are normally used and lost by
loads of people every day; the company is conscient of that fact, that’s why the price is
low, and the product is simple.

WHO

Bic focus on all kind of customers, from children to adults. The company focus on that
customers with common needs like writing or shaving supported on a very low price and
a high quality. However, the main generation are adults if we focus on lighters and razors.

HOW

Bic production is based on low cost materials and simple models in order to make cheaper
the manufacturing. The slogan “the success of simplicity” shows us how important is the
manufacturing following a way of simplicity of all Bic products

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1.4.PESTEL Analysis

In order to study all the macro environment factors that can impact in the company is
necessary to analyze the following external factors: Political, Economic, Social,
Technology, Environmental and Legal.

Political Economic Social

- Tobacco prices are - Low cost products - Trends of man to

increasing 6%; that arriving on the not shave the beard.
would affect to the market from Asiatic - Not smoking
lighters sales. Less countries tendency and
smokers, less - Fluctuation of raw advertising against
lighters sold. materials prices smoking.
- The trade world such as plastic - Purchase of pen is
between USA and which reduces usually related with
China are operating margins. a corrector
increasing the - Digitization of purchase (Tipp-
uncertainty feeling economic Ex).
and affect to the transactions are - In some
entry to the Chinese decreasing the use geographical areas
market. of pens in business like Asia they use
- New policies that industry. special pens a
make easer for - Exchange rates can special paper.
people to study. If impact BIC - Woman razer
the number of investments plans. products are getting
students increase, more specialized.
will also increase
the pen sales.
- Regulatory
practices that could
affect the activity of

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the company in
different countries.

Technological Environmental Legal

- Increasing of - Throwing-away - Regulatory laws
substitutes such as products are more that prohibit
electric razors and pollutant than long smoking in public
more practical life products; and places. Less
technology such as customers are more smokers, less
tablets that conscious about lighter buyers.
decrease the that fact. - Environmental
traditional writing. - Gas produced by laws that punish the
- More specific and lighters use of too much
qualified shavers. manufacturing are plastic on
- Technology unhealthy. production.
implemented by - Plastic Bic
competitors could productions have
reduce their cost. polluting
emissions.

1.5.Porter Five Forces Analysis

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Marketing Management E2 Adolfo del Río Dutú

In order to analyze the industry where Bic acts,

I’m going to use the Porter’s Five Forces. To
determine the industry structure, we must focus
on the following facts: Threat of new entrants,
bargaining power of buyers, Threat of substitute
products, bargaining power of suppliers and the
competitive rivalry.

THREAT OF NEW ENTRANTS

- There is a control of the products of these markets on manufacturing.

- Bic has the partnership of the pen design; so, it’s difficult for a competitor no enter
into the industry because of the pen design partnership.
- Scale economies

BARGAINING POWER OF BUYERS

- Necessary for the companies to seduce the consumer constantly because of the
low switching cost.
- Big number of costumers demanding the product. Everybody needs a pen.
- Huge power of the buyers to demand different changes on the Bic product such
as long-live pens or more razor blades.
- Bic product is similar to competition products. That makes buyers more powerful.

THREAT OF SUBSTITUTE PRODUCTS

- The substitutes to Bic pens are the non-disposable pens; which are getting more
demanded because of the increasing environmental thinking.
- The substitutes to Bic lighters are the Zippo lighters whose life is longer than
disposable lighters.
- The environmental world situation is making people think about buying non-
disposable products.

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- The substitute to Bic razor is the Gillette razor. Gillette is more specialized in
razor industry, so they sell reusable razors in order to reduce the pollution.

BARGAINING POWER OF SUPPLIERS

- Suppliers of raw material.

- The power of the suppliers is short because they can’t offer specific suppliers to
Bic.
- Possibility to create vertical association.

COMPETITIVE RIVALRY

- An opportunity is the possibility of growing in stationarity and razor industry.

- The lighter market is more competitive because of the private label lighters.
- There is a huge competitive in the industry: Pilot, Gillette, Zippo, Chinese
razors…

2_SEGMENTATION

2.1. Key segments

Segmentation consist in dividing the company’s customers depending on their needs. As

I said, Bic has a lot of types of product that offers to the consumers. However, the PM I
am going to analyze is the Bic Pen.

In order to make a good segmentation analysis it’s necessary to focus on four key
segments: Geographic, Demographic, Socioeconomic and Behavioral.

a) Geographic: It’s a fact that the area where the Bic pen is sold affects to the sales
of the product. In urban areas like Madrid or Tokyo, there are so much office work
than in small towns. Office work needs more pens because of the pace of work
and because most of these jobs are concentrated in urban areas. There are also
loads of schools in urban towns that makes an everyday use to Bic pens. It’s

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necessary to say that in underdeveloped countries there is not common the use of
pens as a day routine.

b) Demographic: BIC recognizes that different retailers appeal to different types of

consumers who seek specific products based on age, gender, income and other
factors. Promotion, advertising and presentation of products are therefore tailored
to these differences. However, there is not a huge demographic segmentation;
most of the persons between the ages from 14 to 65 uses pens every day.

c) Socioeconomic: One of the most important characteristic of Bic pens is the low
price due to the very low costs. That’s why the is not a huge segmentation on
socioeconomic concept; Bic pen isn’t bought depending on the socioeconomic
situation of the buyer because that is a basic object to use regularly.

d) Behavioral: Bic has divided their stationary department into three market
segments: Best value for money (purchase made by offices and families) which
consists in low prices and purchases made because of need, Seeking specific
benefits (personalized item) which consists in comfort, writing capacity and kept
in private place for individual use
and Impulse buyers (unplanned
purchase) which consists in
attractive innovated designs and
emotional purchase.

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2.2. Are they valid segments?

There are segments more meaningful than others on Bic company. From my point of
view, geographical and behavioral are the most significant segments. Bic pens sales
depend a lot if they are sold on urban area in developed cities or in rural area. There is
also an important fact in the behavioral as I said before. The demographic and the
socioeconomic are not as important as the rest of the segments because of the very low
costs and the basic need that involves using a pen.

2.3. Market Attractiveness and Competitive Position

GEOGRAPHIC

Market Attractiveness

Factor Weight Rating TOTAL

Customers needs 40 10 400
and behavior
Entry barriers 30 7 210
Market size 30 6 180
TOTAL 100 790

Competitive Position

Factor Weight Rating TOTAL

Competitive 30 6 180
advantage
opportunity
Product 20 8 160
differentiation

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Industry 50 9 450
attractiveness
TOTAL 100 790

DEMOGRAPHIC

Market Attractiveness

Factor Weight Rating TOTAL

Customers needs 20 5 100
and behavior
Entry barriers 10 5 50
Market size 70 8 560
TOTAL 100 710

Competitive Position

Factor Weight Rating TOTAL

Competitive 40 7 280
advantage
opportunity
Product 10 6 60
differentiation
Industry 50 8 400
attractiveness
TOTAL 100 740

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SOCIOECONOMIC

Market Attractiveness

Factor Weight Rating TOTAL

Customers needs 30 8 240
and behavior
Entry barriers 30 7 210
Market size 40 7 280
TOTAL 100 730

Competitive Position

Factor Weight Rating TOTAL

Competitive 10 4 40
advantage
opportunity
Product 20 6 120
differentiation
Industry 70 6 420
attractiveness
TOTAL 100 580

BEHAVIORAL

Market Attractiveness

Factor Weight Rating TOTAL

Customers needs 70 8 560
and behavior
Entry barriers 20 5 100

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Market size 10 4 40
TOTAL 100 700

Competitive Position

Factor Weight Rating TOTAL

Competitive 50 9 450
advantage
opportunity
Product 10 6 60
differentiation
Industry 40 9 360
attractiveness
TOTAL 100 870

2.4. General Electric Matrix

Geographic
Demographic

Socioeconomic

Behavioral

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2.5. Target segment

Once these steps have been completed, we can affirm that the segment that Bic has in
mind when selling their products are the following. They make their promotion searching
for young people and adults living in urban areas and having that necessity to buy Bic
products or with an impulsive buyer behavior.

Europe and Asia are the areas where Bic sells most of their pens.

The most attractive segment is the geographic and the behavioral because of the reasons
exposed before. As we can see on the GE matrix, these two segments are the most
representatives.

3_POSITIONING

3.1. Products to consider

Of all the products corresponding to the BIC brand, I have decided to base my analysis
on the lighters of that brand. Firstly, because the main competitors of the BIC company

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are cigarette lighter sellers. Also, because the variety offered by the companies selling
this product in question is more remarkable.

Referring to the competition, I have decided to base the decision on the three largest
companies that dominate this sector in question. Zippo tops the list, one of the most
recognized lighter companies today. Then I want to highlight the company Calico for its
innovative way of designing lighters. Finally, Zuhoye, a company responsible for much
of the exports of lighters.

3.2. Determinant attributes

There are several elements that differentiate different lighter companies from each other.
To begin with, the company Zippo produces high quality, metal, self-charging and
resistant lighters. The life of this product is long, and they are based on the classic style
that the company has. They are often compared to the company Harley Davidson but
instead of producing motorcycles, produce lighters. The fact of being able to design your
own cigarette lighter and the price of the product are very outstanding attributes. In
addition, the buyer of the Zippo product and any of the other brands do not usually
coincide.

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On the other hand, Bic stands out for being lighters manufactured with a
low cost; a factor that allows them to be sold at a very reduced price. The
lighters sold by Bic are usually small, of medium quality and made to carry
in your pocket comfortably. They differ from the rest because they are
smaller and for their massive sale in any tobacconist. Other brands such as
Calico or Zhuoye are usually sold in small shops and usually have a larger
size. The lighters of these last two commented brands is usually associated
with the kitchen or home, not usually lighters that an average buyer carries
everywhere.

To summarize, we have from high quality lighters and high price to medium quality
lighters and medium-low at a low price. It is necessary to take into account the materials
and manufacturing costs and the consumer to whom the product is targeted. As I have
already mentioned, Zippo is usually for a more adult public and veteran smokers. On the
other hand, Bic relates more with young public where the lighter becomes an object to
use during a certain period and to throw it once it is empty of gas.

Despite the diversity of brands, you must consider what factors the consumer gives
importance when buying a cigarette lighter. That is why the company must anticipate this
search and select the essential attribute: quality, brand or price. These three factors are
what I have considered to be most relevant in the choice of purchase. After having
searched for information about the company I have conclude that most consumers who
buy a Bic lighter consider two variables: low price and quality. In any case, among
smokers, the Bic brand is usually associated with medium quality lighters despite its low
price.

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Bic has achieved a surprisingly high quality (within the market for cheap lighters). This
quality influences the consumer's purchase. The price of a Bic lighter is around 1€, as
well as 90% of lighters sold in tobacconists. So, the question that may arise is: What is
the difference between a Bic cigarette lighter and other brands
such as Calico or Zhuoye? The answer is in the quality of the
burner and, especially, in the format of that product. The
lighters of the company Calico tend to be larger and are
usually recognized by the ones used in the kitchen. However,
the Bic lighters are more comfortable to carry in your pocket
and have a more attractive appearance to the eye due to its
opaque style.

3.3. Building a Positioning Map

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Marketing Management E2 Adolfo del Río Dutú

As you can see from the positioning map, I have structured the brands
of lighters according to quality and price variables. I have captured the
comments in the previous section in the map getting the previous figure.

The Zippo brand is the most separated from the rest because it consists
of high quality but also a very high price. On the other hand, the other
brands stand out for their low price (with small variations within this
variable) and for their medium and medium-low quality. I have tried to
highlight the superior quality of Bic lighters before a price very similar
to its competition: Calico and Zhuoye.

3.4. Current situation

In order to begin this analysis of the current situation of the company Bic, it is necessary
to highlight the situation in which it finds itself with respect to its consumers. Bic lighters
are generally associated today with low price and "decent lighter". After having
researched people's opinions about Bic lighters and based on my own opinion I have come
to several conclusions.

The first conclusion is that most buyers of lighters turn to Bic before any of the other
brands of lighters. The consumer associates the quality of the cigarette lighter with the
recognition of the Bic brand, being a company known worldwide. Therefore, consumers
prefer this brand when buying a low-priced cigarette lighter.

The second conclusion covers the entire Bic company. The company's main competitors
are companies that sell lighters. Bic needs to grow more in this industry and focus on
differentiating itself even more from other competitors. Chinese brands of lighters are
growing and are able to produce more and more at very low costs. However, the design
of Bic lighters is still characteristic: striking colors, simplicity, quality ... are
characteristics that are not only associated with the sale of lighters, also to the ideals of
the company. Nowadays, Bic is one of the leading companies in the sale of lighters. This

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position in the sector has been maintained over the years and the consumer prefers to buy
a Bic cigarette lighter rather than a Calico cigarette lighter.

Finally, I believe that Bic is in an optimal position for quality and price; in addition, it has
a great brand recognition that favors it in the sales of lighters. Therefore, I believe that
Bic should continue to invest in improving the quality of its lighters without incurring
many costs and maintaining that style of simplicity and attractiveness. Such an investment
would be simply to maintain or increase the consumer's recognition of the brand. Bic
should not compete with companies such as Zippo as they are not in the same segment,
Bic should compete against companies of low-priced lighters and emerging Chinese
brands that allow even more remarkable price reduction.

3.5. Ideal Positioning

As you can see from the positioning map, I have pointed out the area through which, in
my opinion, Bic should move. You can see a slight growth in quality without highlighting

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a large movement in price. This ideal positioning is based above all on maintaining the
image of a large corporation that the consumer has over Bic.

For the rest of things to modify on the sale of lighters of the company, I have nothing to
add. I consider that the rest of factors are being done in an appropriate way to the brand
image, both the design and distribution to the buyer.

In addition, Bic is responsible for leaving the quality and safety message to buyers. The
following phrase can be found on their website: BIC® lighters are manufactured to the
highest standards of safety and durability. The end product is not only very well designed,
it is light, safe and reliable.

Finally, Bic is improving the durability of its lighters, not only to differentiate itself from
the competition, but also to give an image of sustainable. All this effort is reflected in the
new television ad in Mexico, where they claim: “The fire of 3000 matches in a single
Bic”.

3.6. Product + Segments

As you can see on the map, I've linked the segments to the products. I have structured the
segments into three: young smokers, adult smokers and non-smokers.

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Firstly, I have placed young smokers as the main consumers of Bic and Calico as they are
usually people with a low income and base their purchasing choices on price. They are
also people who have not smoked for many years so they still do not take into account
the money they spend on lighters over time or the image that can give that type of cigarette
lighter. Anyway, there are always exceptions, which is why I have extended a little the
range of young smokers.

Afterwards, you can see how the range of adult smokers is very wide and includes above
all the Zippo brand. I have considered that adult smokers are people who have been
smoking for many years, so they already have their own cigarette lighter as a sign of
identity or simply in the long term it is cheaper to buy a cigarette lighter brand Zippo. I
have also taken into account the budget of an adult to personalize a cigarette lighter or
pay a minimum of 40€ for a cigarette lighter. In addition, a Zippo gives a more serious
and mature image than a plastic cigarette lighter. Anyway, I have extended the range of
adult smokers to lighters such as Calico or Bic because most adults also use these
products. Not all adults buy a Harley Davidson, but the target audience are mostly adults.

3.7. Results interpretation

After having carried out all the segmentation of these companies of lighters I am going
to make a brief summary of the interpreted results.

First, Zippo is not a direct competitor of the company as it sells to a different public than
the other lighter companies. Calico and Bic fight to stand out in the market. However, Bic
leads the way in the sale of lighters worldwide. The company Bic has prestige and quality
with which it is difficult to compete. Also, you can see how these two companies focus
on young people with low budget to spend on lighters. Bic is more eye-catching and has
a simpler design making it easier for buyers to distinguish their product from the rest.

Bic considers itself a company in good position in the market. Bic is a clear example of
business success based on specialization. A specialization that has always been associated

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with simplicity and quality. BIC products have nothing special at a glance, but rarely fail,
during the manufacturing process, lighters are subjected to exhaustive quality controls. In
1973 Bic started in the business of pocket lighters and today are the world's leading brand
in this type of lighters.

3.8. Target Positioning

Bic’s target positioning is defined by reliable products, value for money for regular
household purchasers, premium high-quality products for the customer and novel, eye-
catching products, sometimes with a fairly short life-cycle for impulsive buyers.

The value of the most important proposition is the one addressed to the clients, since they
are our main source of financing. The value that Bic provides, as we have already
mentioned, is quality products, attractive and at a very low price. Bic's quality is
unquestionable, and not only with its lighters, but also with the rest of the company's
products. Therefore, Bic's value proposition is clearly a high quality compared to its
competition and a very low price. Also, Bic has a consumer confidence associated with
the huge company image reflected in Bic.

To continue growing as a corporation must continue to provide that image of quality and
simplicity to the public. With reference to lighters, it must increase its distribution to cigar
stores in order to increase its advantage over its competitors.

`l

4_PRODUCT & BRAND

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The products chosen from the company BIC to analyze through

the studied matrices will be those related to stationery, lighters,
razors, Bic sport and Bic technology. I have chosen these
products from the company for their variety and for having all
kinds of products with different characteristics so that the
matrices have a more optimal analysis.

4.1. BCG Matrix

The BCG matrix is a method of analysis that allows us to study a company's product
portfolio, growth and market share of products.

This matrix is composed of two key variables: growth rate and market share. In order to
place each product according to its route through the variables, we use four elements: star,
question mark, cow and dog.

The star represents those products of great growth and participation in the market; this
product must be strengthened.

The question represents those products with great growth and little market share. The
strategy must be re-evaluated.

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The cow represents those products that are mature and established in the market. High
market share and low growth.

Finally, the dog represents those products with little

growth and little market share. These products bring
little or no profitability to the company, being in the
last stage of the product life cycle.

In the previous matrix we can see the distribution of the company's products according to
their market share and growth. I have made a search of what each product represents for
the company and the sales of each one and I have elaborated a distribution between the
four clearest cases.

Firstly, in the question mark section, I have placed the Bic tablet. This product is one of
the latest products launched by Bic and is a very different product that the company
usually trades with. This product in question was launched as an option to adapt to new
technological trends. The diversification of this product was related to people being able
to write and draw without wasting paper or using disposable materials. It was also Bic's
strategy to clean up the image generated by its range of disposable products. Referring to
the reason for my placement, I have decided to name it as a question mark because it is a

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product with little market share since it does not have many sales. However, the growth
studied since its launch has increased very considerably. This is a product that still has a
long way to go and it is necessary to study its strategy and how the market is responding
to it.

The product I've linked to the star is the Grip Pen Crystal. This product was launched by
Bic a few years ago and currently its growth and market share continue to increase. The
key to this product is the fineness of its layout and its resemblance to pen writing. The
launch of this product has led to an exponential increase in Bic's sales and has become
very popular among large European offices. It is very true that this product is being
perfectly accepted by the consumer and is leaving its mark on the market.

In the dog section I have located Bic Sports. Bic sports focuses mainly on the sale of
windsurf boards. This product is totally stagnant in the market because it does not offer
any kind of profitability to the company. The market share is very low and sales decline
at a high rate. The origin of Bic sports was not strategic; the founder of the company
entered this industry because he had always felt a lot of attraction for water sports. This
type of business decision has a bad impact on the company's sales. This product has been
causing losses in the accounts of Bic since it had only a few years acting in the market
and is the best example of dog that the company has.

Finally, the best example of a mature and established product in the market is the one that
starred in the first launch of the company Bic: the classic crystal Bic. This product does
not have an annual sales growth. However, sales of Bic crystal are very high, and its
market share is very large. This is the company's best-selling product and has a worldwide
presence. It is absolutely clear that if a product must be found in the cow section it is this
one.

4.2. McKinsey Matrix

McKinsey's parent company, or General Electric, is a strategic marketing tool that helps
us make investment decisions about our product portfolio.

In one of the two axes we have the variable "competitive position" and we give it 3 values:
weak, medium or strong.

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In the other, we place the variable "market attractiveness" that analyzes the attractiveness
of the market in which the product operates and then classify our products in market
attractiveness: low, medium or high.

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First of all, we can see two products that should not be invested in. The first one is the
Cristal Grip Pen Bic; the product that we have previously pointed out as the one that had
more growth and market share; now we mark it as a product in full expansion, in an
attractive industry and in a good competitive position. This is why this product should be
allowed to continue growing before considering a re-investment. The other case we have
is that of Bic Sports; as I mentioned before, it is not a product with much future in the
company. Despite being in a moderately attractive industry, the product should be sold as
it is not being managed well from the company.

On the other hand, there are two products that should be invested in growth: the Bic tablet
and the company's most mature product. We are talking about two products that can still
be exploited more, that are in an attractive industry and that have a good competitive
position. Firstly, the Bic tablet needs a strong investment to increase the number of sales
and to better adapt to consumer demands. Finally, the classic Bic pen needs to have that
hypermaturity and be associated with optimum quality on the part of the consumer.

4.3. Brand Portfolio

Bic is a company with a very broad portfolio of brands. From the moment of the
foundation of the company Bic started in the business of the stationery investing above
all in the optimization of its base product: the pen. From that moment on, the owner of
the company decided to continue increasing its brand portfolio.

First, he began to invest in simple and low-cost products, so came the Bic razors and Bic
lighters. These last two products were a success because they followed Bic's principles:
simplicity, efficiency and quality. From that expansion of brands there were a series of

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investments and purchases that did not favor the growth of the company as for example
the acquisition of a brand of clothing, the creation of a line Bic perfumery or the already
commented Bic Sports.

These first two were sold after the death of the founder and acquired Tipp-Ex and other
brands of stationery, thus returning to take into account the principles of the company. As
we can see, Bic is a company with a great variety of brands; many of them successful,
others in the process of growing and others stuck. The matrices studied are important in
order to know or analyze the future of a company's product and what presence it has in
the market.

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5_DIAGNOSIS

5.1. SWOT Analysis

In order to study the internal characteristics of the company and external situations that
may affect its operation, I will make use of SWOT analysis.

This analysis basically consists of four concepts: Strengths, Weaknesses, Opportunities

and Threats. These concepts are applied to the external and internal environment of the
company making reference to the strengths that the company has and from which it can
take advantage, the weaknesses that the company has to improve, the external
opportunities that Bic should try to take advantage of and the threats that should reduce
and minimize its effect on to the company.

STRENGTHS

- Differentiated products with differentiating characteristics in packaging.

- Excellent reputation and good customer service
- Global reach (160 countries)
- Cost-effective production on scale
- Broad product portfolio

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- Great employee/company relations and employee benefits

- Speed and efficiency in rolling-out new products
- Robust, simple and functional products
- Improved product life and durability
- Business experience

WEAKNESS

- Known for having low quality, disposable products

- Weak social media presence on razors
- Need for a stronger sales force
- Price well below the competition which can generate distrust of the customer
- Prefers not to borrow money; slowing expansion

OPPORTUNITIES

- Products with no expiration date which gives more time to rotate.

- Expansion. Yet to expand to markets like China or India.
- Possibility of acquiring smaller companies.
- Commercialization of other products
- High demand for products
- Bic's high reputation can allow the company to succeed in other markets.
- Continuous development of local activities in reference to the environment

THREATS

- Entrance into the market of similar products with lower costs.

- Global instability can lead to an increase in tariffs on imported products.
- Compete with companies that offer higher product quality or are more
environmentally sustainable.
- Increase in substitute products.
- Increasing trend against disposable products.
- The sale of razors can drive away young audiences.

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- Incrementing costs such as labor costs or resources.

5.2. Potential VS Vulnerability Analysis

In the following analysis the data exposed in the SWOT analysis will be extracted and
compared with their influence on the company. These data will be separated and
explained in two concepts: the analysis of potential and the analysis of vulnerability.

Referring to the Potential Analysis, it is necessary to relate the strengths with the
opportunities to evaluate possible strategies to be developed. Expansion into the Asian
market is a clear opportunity to export the company's products and globalize at a higher
rate. This strategy can be carried out by acquiring a smaller Asian company to get to know
the culture and to be able to enter the market more directly. Bic is a company that can
take advantage of countless strengths such as the clear differentiation of its products or
the excellent reputation in terms of useful products that the company has. In addition, it
is necessary to emphasize how Bic can enter to commercialize other type of products
without leaving aside its policy of selling products that are used daily as they can be the
razors of shaving or the lighters; it is for that reason that thanks to the enterprise
experience of the company it can study another type of products that to launch to the
market. This analysis can also consider the fact that your products have a much higher
life cycle, i.e. that your disposable products are much more durable. Thanks to the
company's low manufacturing costs, it is also possible to allow this type of product
modifications that would clean up the brand image that currently remains in the business
environment.

Finally, a clear measure that the company can take advantage of is that differentiation of
the characteristics of the typical Bic product. This combination of colors makes it stand
out from the competition, which is why it has the opportunity to develop new products
that the consumer will associate with the brand due to these commented characteristics.
The company has the experience and the work team that can provide a good market study
and new products to develop in the countries in which it operates. Bic's worldwide
presence makes it have a serious and important company image and at the time of
launching a new product to the market can take advantage of this image that provides him
to have been so many years in the business.

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Vulnerable analysis exposes the weaknesses and threats that have been analyzed in the
company. These concepts are interrelated in order to develop strategies to reduce these
vulnerabilities. The first is Bic's absolute dependence on its materials and suppliers that
provide it with a low manufacturing cost. One threat that Bic must control is that this
dependence on suppliers or cheap raw materials may come to an end due to taxes or
changes in political regulations; it must therefore ensure that these costs can be
maintained over time or study other possible alternatives. It is clear that such a high
dependence on the sale of products is not good and can lead to a small change in
regulation or an increase in tariffs on the import of raw materials that will cause this
manufacturing process to fail. Another analysis to highlight is the possible entry into the
market of growing Chinese companies that offer retail prices lower than those of Bic and
even lower manufacturing costs that allow them to justify such prices. The entry of this
type of companies is a clear threat to the company, not in the short term, but in the long
term may end up harming the company.

5.3. Competitivity Analysis

The competitive advantage is the ability of a company to overcome others in the same
industry or sector through capabilities and resources that make it unique and valuable.

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When it comes to studying Bic's competitive advantage and knowing what differentiates
it from the rest of the competitors,
it is better to know the key
elements of the value chain. These
elements that make Bic stand out
from the rest of the competition
could be summed up in four:
quality, low costs, pioneering and
simplicity.

In terms of quality, it is clear that Bic has one of the best quality/price ratios between all
its competitors, since thanks to its low manufacturing costs, it can set very low prices in
relation to its average quality. The quality of Bic's products is a good quality that is made
so that the products are disposable and last just as long as they have to last. Quality and
low costs are closely related as the fact that costs are low allows Bic to set low prices
which in comparison to these prices their quality is high.

Bic's low costs position it well above its competition because thanks to its suppliers and
the optimization of its manufacturing process, it gets the public to pay much less for its
Bic product, and this in front of its competition is a factor that stands out... In addition, a
large part of the company's investments is aimed at continuing to optimize these low
costs.

Bic is remembered as the first company to introduce the pen we know today in the market.
Before Bic was founded, the writing object used was feathers; these objects stained a lot
and had a relatively high price. At the time when Bic's famous ballpoint pen the writing
market underwent a revolution and Bic expanded for years to come at a very intense pace.
Since then everyone knows the company as the pioneer of this type of pens that marked
an era in writing around the world.

Finally, Bic's simplicity has been one of those values that has remained in the company
since its foundation. It is very easy to recognize a Bic product by its colorfulness and
simplicity; that is why this element is also considered as one of the most distinctive among
the competition since these characteristics have been constantly maintained in the
company since its inception.

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Quality Low costs Pioneer Simplicity

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6. STRATEGIC ACTIONS

6.1. Objectives and Strategic GAP

The primary objectives are those necessary for the continuous operation of the project or
activities to be developed while the secondary objectives are those whose function is to
improve efficiency in relation to the public.

PRIMARY OBJECTIVES

 Products made to last: The fundamental characteristic on which Bic products have
been based is simplicity always in accordance with innovation. In addition, they
are light and accessible products, since Bic is currently operating in more than 160
countries, adapting to each market and to the purchasing power of each country.
However, lately Bic's products are not getting a good reputation because they are
disposable and harmful to the environment. That's why Bic must invest in
sustainable materials and durable products.
 Entry into the Asian market: As mentioned above, Bic's expansion has entered a
period of slowness due to difficult market entry in China and India. The diversity
of cultures and the different policies make it difficult for a company like Bic to
enter such countries that tend to work also with low costs.

SECONDARY OBJECTIVES

 Reduction of the environmental footprint: Bic strives to reduce this environmental

impact through a series of commitments and guarantees that its factories are
evolving towards "environmentally responsible" production. Also, in the field of
logistics is responsible for optimizing routes and shipments to reduce emissions
of CO2 into the atmosphere. However, more sustainable measures are needed in

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order to improve the brand image and provide CSR. The goal is to increase sales
by improving the company's image.
 Work climate improvement: Referring to the state of the workers; another
measure to be taken by Bic to improve its brand image and Corporate Social
Responsibility. The company's corporate culture has been the key to BIC's
success, as it has managed to maintain a corporate culture and shared values
despite the diversity of cultures between the countries in which it operates. BIC
wants to prioritize safety at work above all else, adopting measures that guarantee
a good working environment for its workers.
 Education Commitment: BIC is committed to achieving access to education for
all through the implementation of various projects. In spite of having the BIC
Foundation, it is necessary to increase the number of projects and the publicity
towards this foundation since the improvement of the brand image is essential for
the differentiation of this company with respect to its competitors. BIC and its
employees contribute time and donations to support access to education. In 2016,
BIC made 112 donations to promote education for a total amount greater than 1.5
million euros. This foundation is not known by the majority of consumers and its
existence should be further promulgated and the number of donations increased.

Referring to the manufacture of products with a longer life and ecological products. Bic
should invest and carry out market studies on this type of materials to be used and know
how much expenditure will mean for the company this change in production. It is
necessary to bear in mind that this strategy aims to increase the number of sales and
improve the brand image of the company so a reduction in profit margin due to increased
costs is not so important as it would be backed by an increase in sales given by these more
durable products. Since the beginnings of the company disposable products have been
produced with cheap material such as plastic. However, the consumer trend towards this
type of product has changed; now the consumer is concerned about the environmental
footprint and is not fully satisfied using products of short duration and harmful to the
environment. That is why I consider that an investment in better and more ecological
materials will increase the number of sales thanks to the production of ecological and
more durable products without losing the faithful style of simplicity of BIC products.

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The strategy to be followed to meet the second primary objective would be the acquisition
of an Asian company. This acquisition would be aimed at increasing sales in countries
such as China or India. These countries have very diverse regulatory policies and cultures
that make it difficult for companies such as BIC to enter. I consider it appropriate to
acquire a company to enter these markets due to the policies and mentality of these
countries to support the national product rather than the entry of large multinationals.

The strategy would consist of studying the various paper companies operating on the
Asian continent of relative importance. Once this company has been studied, negotiate a
price, acquire it and start distributing Bic products in the countries mentioned.

The secondary objectives discussed are based on reducing the environmental footprint
and improving the company's brand image. The strategy that would be connected to the
first related to the change of ecological materials in the frication of products. Packages of
ecological materials would be implemented in the distribution of Bic products. They
would use an ecological package only those products in which it was absolutely essential
to transport them in this way; those who did not need a box would do without it.

It is necessary to emphasize that with respect to the optimization of routes with the aim
of reducing CO2 emissions there is also a more expensive measure to study; the
incorporation of electric trucks to carry out the distribution of BIC products.

With respect to improving the work environment and collaboration with education, BIC
would prioritize work safety above all else, adopting measures that would guarantee a
good work environment for its workers. In addition, they would develop programs to
improve the quality of working life, through which employees can benefit. Finally, BIC
employees would have the opportunity to continue to develop and promote themselves in
the company, regardless of their position, responsibility and experience. Finally, the BIC
Foundation would focus its investments mainly on the financing of social
entrepreneurship and innovation in the company education.

STRATEGY EXPECTED REQUIRED GENERAL

RESULTS RESOURCES EVALUATION
1 Increase in High An investigation
sales and investment in is needed.
improvement materials Immediate

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of the research and adaptation to

company's lost costs in consumer
image. profit margin preferences.
2 Entry into the Expenses in High cost, big
Asian market research and step in
high expansion.
investment in Long-term
acquisition. strategy.
3 Improvement Costs in Weak strategy.
of the brand publicity and It does not
image and investment in generate profit
increase in the the own image.
number of
donations

It is clear that the strategy to be followed by the company is the one that implies the
change from disposable products to more durable products, the investment in ecological
materials, the change in logistics when distributing BIC products.

6.2. Timeline

The strategy that consists of implementing the most ecological and durable materials and
sustainable production can be carried out in a year or two in which the different materials
to be implemented will be studied according to their cost and sustainability. Small

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changes such as ecological pens, sustainable boxes and finally the optimization of
sustainable production will begin to be implemented.

The acquisition of the company is situated in about five years due to the great work of
research and projections that causes. Mainly, a study will be carried out of the companies
to be acquired and to measure their presence in that country. After that, the projections
and the possible return of the investment will be calculated and finally the price of the
acquisition will be negotiated. Once this is done, the distribution points of Bic throughout
the Asian continent will be studied.

1 2 3 4 5 6

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