Devoted to Managers and those that seek to improve their management skills

Warren Buffett and Secrets of Management - 38

What is it that Warren Buffett sees in Gillette that makes him such a fan of it for his Berkshire Hathaway (BRK-A) shareholders? On the surface it really doesn't seem to be a company that has a steady, secure future because of it having a unique product or service to offer.

The company sells razor blades. How unique can it be to do that? A lot of companies exist in the same market, yet Gillette still manages to continually hold a large share of the razor market.

There are several things that it does well that keeps the company the market leader.

First, it's the marketing itself. They're experts in getting their message out about who they are and what they represent.

Second, they are branded strongly in the minds and hearts of consumers. They're a company that is trusted by those that use their products.

Third, they continually make improvements on their product. It seems like it would be impossible, but the combination of razors and blades is continually reinvented by the company to the delight of those using the products.

Fourth, the products are high quality and reliable.

Fifth and last, the product must be used on a continuous basis for the life of the customers who shave daily.

These things sound very simple, and they are. But executing these simple things over a period of years is something that very few companies in the world do well. Gillette's got it down to a science, and they produce one winner after another.

Occasionally the company has had periods in the past where the stock didn't do much for a while, and then it would take off in response to its consistent performance.

Even thought they're part of Proctor & Gamble (PG) now, they still continue to put out high-quality products that people use over and over again. They've never been a commodity company and probably never will be.

Other Buffett Resources:

Wisdom of Warren Buffett

Warren Buffett, investor

Warren Buffett: The trouble with being a legend

Warren Buffett: 'I told you so'

Company growth

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