Assignment on Dollar Shave Company

   5c’s analysis of Dollar Shave Company

5c’s analysis is used to learn about the situation, which is used to identify the issues which are related to the research. A condition that includes the analysis of the different factors that impact the abilities of the company that how it is being operated in the society. It is a framework that is considered to know about the internal and external environment. 5c’s analysis is explained as:

·         Company of Dollar Shave

The company is being operated in 2016, which is facing issues in the market. The Dollar Shave Company was launched in 2012 and disrupted the shaving industry in with its entrants in the market. The company is working with approximately 3.5 billion members, according to the survey of 2016.

·         Customers of Dollar Shave Company

Before the entrance of the Dollar Shave Company, the customers were using P&G products, and most customers were shifted towards Dollar Shave when the company introduced their product. The main target area of Dollar Shave Company was men who are used to go office and on a professional platform. DSC based on the relationship with customers who have the ultimate target to get the membership of these customers. The relationship between customers and the company is informal and simple which allows the customer to treat the people as friends. With the high performance and providing quality products in the market, the company is getting 4.7 ratting out of 5.

·         Competitors of Dollar Shave Company

There are a number of competitors who are working in the market to deal with the need of customers, and their competitive analysis is explained below: 

Collaborators are the external stakeholders who are outside the organization but affected by the activities of the organization directly or indirectly. In the case of Dollar Shave Company, there is a collaboration of the supplier who is engaged in working with the company in the manufacturing process.

·         Climate

Climate includes the situation of PEST analysis in which the environment company is being processed. The pestle analysis could be explained how the political, economic, social and technological factors are included in the production and marketing of razors (Adams & Royl, 2011).

2.      Customer lifetime analysis for DSC:

There are two scenarios, in which customer lifetime value is calculated in this case,

Ø  Where the customer is subscribed to DSC

The customer value is calculated to get to know about the per,formance of the company. In this case, it needs to multiply with the average value of the customers. If the average lifespan is assumed as 20 and the value of a customer is $8 million;

Customer lifetime value = customer value × average customer lifespan

= 20 × $8

= $160 million

Ø  Where a customer has migrated to Gillette fusion

In case if the customer shifts their demand from Gillette or any other brand and the life span of the customer is 10, and the customer value is $8:

Customer lifetime value = customer value × average customer lifespan

= 10 × $8

= $80 million

 The street price of DSC on the website is $8 in a month, which could be different in different countries or websites.

a)      Profile of Typical Customers of Dollar Shave Company

Typical customers of Fusion 5/ Proshield and DSC are men from age 20 to 45 above. Customer characteristics vary in the market as it depends upon the choice rather than need.  However, it is equally common in urban and rural areas. Typical customers belong to America, China, India, Pakistan, Australia, and Germany. Company sell out its products in 200 countries. Typical profile is presented below:

 CLV values of Dollar Shave Company

Calculating CLV:

To calculate annual profit total cost and revenue values are required. Cost per product is calculated as $2.26 for Fusion 5/Proshield and $4.4 for DSC. In this cost, all marketing and operating expenditures are also included which are presented above in the table.

Annual profit per customer:

For Fusion 5/Proshield:

c)      Explanation about assumptions of Dollar Shave Company

Some values are assumed to calculate customer lifetime value for Fusion 5/Proshield and DSC for instance, values of retention rate, marketing cost, number of blades per month, and grooming products per month. While street prices are taken from internet sources. Retention rate is set high as company have strong customer equity and builder loyalty. While marketing cost is set same for both products. Although, number of blades per month, and grooming products per month are assumed based on previous statistics available at internet sources and case study.    

d)     Reflection on difference of Dollar Shave Company

Customer lifetime value for Fusion 5/Proshield and DSC has a huge difference. In fact, customer lifetime value for Fusion 5/Proshield is almost double from DSC. The key reason behind this is high profit margin set out for the sale of each unit DSC. Another reason is high street revenue price for DSC.  

3.      Marketing strategy of Dollar Shave Company

If you were in charge of Gillette, what would be your strategy in the US or UK against DSC?

 Gillette is a well-known P&G product which is considered as best product in the market which men are using with the phenomenon that it is the best product in the market but when there is launching of the Dollar Shave, it captures the market with large portion and with the passage of time dollar shave capture the market with strong command, and there was a grooming product in the market. To get back in the market Gillette has to adopt different policies that could give back the market position which was Gillette enjoying the benefits in the market. The best policy to adopt is considered as online marketing and e-commerce. It means that the company should increase its sale on the internet with the benefits which are related to the product so that the customers could true position in the market (Matthew Corey.Cataudella, 2009).

There must be online transactions of razor blades that are required by the customers. The company should offer its customers for the product only $1 which is very reasonable in the market for daily use. It could be only implemented in certain areas to test that if this policy is going to succeed or not; therefore, it should be implemented in the U.S. or U.K. although this strategy is not helpful for Dollar Shave Club, it would be a reason of competitive market in the history.

What will DSC do to stop that?

 As above discussed that this online policy is not suitable for the DSC, so there should be steps that are helpful to stop these situations that the customer will start to shift their demand to the P&G. The policy of Gillette is to sell the razor at low prices, which is about $1. As it is the lowest price, but DSC has to control it. For this purpose, DSC should introduce different packages on the internet such as a pack of 3 razors in $2 with an attractive sentence that it would be easy for the customer to spend one month. There should also have a policy to give awareness to the customers that the DSC is providing the best quality at the same price. It means that the company should increase its sale on the internet with the benefits which are related to the product so that the customers could true position in the market. This will also stop the customer from consuming the DSC product as they will prefer the best quality at the same price. All this could be possible with effective marketing.

4.      Implementation plan of Dollar Shave Company

The marketing strategy is adopted that it should be advertised that the customer could access the product using the internet. There should be a budget plan for online marketing, which is about to sale the razors in $1 or $2 with a pack of the razor, which attracts the customers. For the implication of this strategy, there must be steps such as:

Ø  Formation of the policy

Ø  Allocate funds for this strategy

Ø  Give a practical view to the model which is created to online marketing

Ø  Review the plan

These steps should be followed by the Dollar Shave Club to adopt the e-commerce business, which is helpful in making the best competition in the market. The formation of policy depends upon many factors purchase cost of production of Gillette razor, demand of product, and specific needs of customers from the product.  Specific funds will be allocated for the strategy. The product will attract the customers as it will fulfill the needs of customers. A practical model will be created to check the online marketing of Gillette razor. The online services will attract the customers to provide low-cost services according to the demand and needs. On completion of the plan before implementation complete review will be conducted to analyses different aspects of the plan. After the implementation of the plan the analysis will be conducted continuously for 3 years five years base to analyses if the plan is successful for the product and revenues. different alteration on the basis of needs will be implemented to make the plan more successful.

Conclusion of Dollar Shave Company

In the present report 5C analysis conducted for Dollar shave company measured ability of company under defined framework. The Framework analyses the external and internal environment including company, customer, competitors, collaborators, and climate. Two scenarios for customer lifetime were considered the customer lifetime is observed as 160 million dollars while migrated Gillette fusion customer life is 8 million dollars. The typical customers of the company are from China, Germany, Australia, Pakistan and America. The report also includes calculated annual product profit, cost, and revenue. The report considered assumed customer lifetime for the future and reflect differences between the DSC and Fusion 5 shield. The marketing strategy of Gillette in UK and US is different. The online transactions of razor blade are also considered. The history of company is very competitive it is generating revenues with the high efficiency of product. Implementation plan for the product include formation of the policy allocation of funds, review on the plan and practical view of the model. According to analysis different steps can be followed by dollar shave club to adopt E-Commerce business.

References of Dollar Shave Company

Adams, I. J., & Royl, T. G. (2011). "Shaving razor.". U.S. Patent Application 29/380,578,

Matthew Corey.Cataudella. (2009). "Shaving razor handle. U.S. Patent Application 29/329,087.