© David O’Sullivan and Lawrence Dooley

International Case Study

BIC Pens
Bic is a world leader in the production of stationery, lighters and shavers and has become
a worldwide recognized brand with products sold in more than 160 countries worldwide.
The Bic philosophy is to ‘honor the past, invent the future.’ It all began in 1945 when
Marcel Bich set up a factory and began to produce ballpoint pen for the European market.
In 1956, Bic Corporation began operations in Brazil and launched the M10 Clic Retractable
Ballpoint Pen. In 1958 Bic acquired the Waterman pen company in Seymour, Connecticut.
The company also began operations in Africa and the Middle East and soon after, in 1959,
it acquired Ballograf, a Swedish ball pen company. In 1963, Bic moved to its present site in
Milford, Connecticut: its headquarters are still located there today. In 1965 Bic entered
the Japanese market, and on November the 15th 1972 Bic became a publicly traded
company on the Paris stock exchange.
Bic achieved another major success in 1973 by launching the Bic lighter with an
adjustable flame. Then in 1975 the company launched its one-piece shaver. It continued to
expand and in 1997 it acquired two more companies: Tipp-Ex and Sheaffer. In the year
1998, Bic launched ten new products in their stationary range including the erasable ball
pen. New lighters and shavers were also added to the market such as the child resistant
lighter known as ‘A Sure-Start’ and the ‘Bic Plus’ shavers. In 1999 Bic expanded their
stationary range even further by launching many more new products. The Marne-La-Vallee
factory opened in the year 2000: making state of the art writing instruments.
Nevertheless, to this day, Bic is still best known for its disposable ballpoint pen.

The Evolution of the Idea

Many say the history of the ballpoint pen dates back to the 1800s when John J Loud
developed an instrument for marking leather; this however was not suitable for writing on
paper. In 1938, a patent for a ballpoint pen was registered by two Hungarian brothers,
Laszlo Biro (a journalist) and George Biro (a chemist) with the European Patent Office. The
idea for their ballpoint pen stemmed from ongoing problems associated with conventional
fountain pens. At the time, fountain pens regularly clogged, smudged easily, could
sometimes tear the paper and were expensive to purchase and maintain.
Many of these problems with fountain pens aggravated Laszlo Biro as he went about
his work as editor of a small newspaper. Biro’s inspiration for the eventual patent came
when he noticed that ink used in newspaper printing dried quickly and did not smudge.
Armed with this knowledge, and frustrated with existing standards, Biro set about
designing a new writing instrument using newspaper ink. He hoped that his pen would
alleviate the problems associated with the fountain pen and thus revolutionize writing
technology. The Biro brothers produced a pen that used a tiny rotating metal ball to
deliver ink to the paper, and which used capillary action to deliver a steady flow of ink to
the ballpoint. In comparison to the conventional fountain pens, Biro’s pen was much
studier, but still had some teething problems. In 1944, Laszlo and his brother moved to
Argentina where they acquired venture financing for their invention and established a
company called ‘Biro pens of Argentine’ and sold their pens as Birome. One of the initial
markets for the new product was the military as the ballpoint pen was renowned for its
toughness and the ability to function in harsh environmental conditions. Unfortunately for
the Biro brothers, they neglected to register their patent in the United States, and as a
result, a number of competitors sprung up once the commercial viability of the ballpoint

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pen became evident. Milton Reynolds managed to beat the competition, and following a
visit to Argentina, was the first to introduce the ballpoint pen to the American market.
This pen went on sale in New York for $12.50. Other companies such as Eversharp also
released their versions of the ballpoint pen for the American market. The influx of
competitors resulted in frequent price wars and high marketing costs that resulted in
significantly reduced profits and the quality of the product.

Birth of the Disposable

Meanwhile in France, a man named Marcel Bich and a fellow businessman Edouard Buffard
were running a thriving business that produced parts for mechanical pencils and fountain
pens. Although Bich started his career, as a door-to-door salesman in Paris; he went on to
become manager of an ink-manufacturing factory, and it was in this context that he
became aware of certain design flaws in Biro’s ballpoint pen. He believed that if the
quality was improved and the price reduced, then sales of ballpoint pens would grow
exponentially. Driven by this belief, Bich together with Buffard, raised $1,000 to establish
the Bic Corporation. Their goal was clear: to manufacture inexpensive, reliable ballpoint
pens that were disposable. Bich purchased the patent rights to the ballpoint pen from
Laszlo Biro and set about modifying the design. He imposed rigorous quality standards
throughout the production process to ensure that the quality and reliability of his
products remained high (especially given that many customers were beginning to view the
new product as unreliable as a consequence of the US price wars).
Although by no means the first to offer ballpoint pens to the market place, Bich’s
contribution was to develop the mass production industrial process which ensured output
of a standardized, reliable pen significantly lowering the unit costs. Bich had developed a
disposable writing instrument that was not only affordable to a much larger market but
was also more rugged and dependable than that of his competitors. As a trade name, Bich
decided to drop the ‘h’ from his name in order to avoid pronunciation problems and
launched his ballpoint pen (the Bic Crystal) to the European market in 1950. Sales
exceeded everyone’s expectations and just three years after the pen was first introduced,
it was selling over a quarter of a million units each day in France alone: Bic had succeeded
in bringing the ballpoint to the mass market.

‘Nibbed’ in the Bud

Almost ten years after Bic first entered the European market the company made its
assault on the American market. Although Bic pens sold for just 29c, customers were
reluctant to buy the pens. To offset the uncertainty of consumers, Bic launched an
advertising campaign to inform them that their ballpoints ‘write first time every time.’
Their adverts depicted the Bic pen being fired from a rifle and strapped to an ice skate
illustrating the sturdiness and reliability of the product. Slowly, their US market share
began to increase. In 1958, Bic purchased 60% of Waterman Pens, a New York based
company and by the 1960s, Bic dominated the US market, pushing other competitors such
as Parker and Sheaffer into the niche upscale market of more expensive ballpoint pens.
Their dominance was further highlighted when in late 2005, BIC announced that it had sold
its 100 billionth disposable ballpoint pen, establishing it as the world's best-selling
ballpoint pen.

At the End of the Day

Laszlo Biro’s vision has become a reality; ballpoint pens being the writing instrument of
choice used throughout the world. The world still pays homage to its inventor, the word
‘Biro’ often being used as the generic name for all ballpoint pens. While the memory of
the Biro brothers lives on; there is no doubt that Bich’s contribution to bringing the
ballpoint to the mass market realized Biro’s initial vision.
Throughout the years the Bic Corporation has grown form strength to strength. It
has diversified into other product ranges where its core competencies offer it competitive
advantage. These areas include disposable lighters and razors, as well as other stationary
products. Despite this diversification, the company continues to make most of its profits
through its stationary products. The Bic Corporation has worked extremely hard
throughout the years on the processes needed to develop such an innovate product as the
ballpoint pen, while maintaining the highest standards of quality. Due to Bic’s clear focus,

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the company has become as synonymous with success as it will always be for its famous
ballpoint pen.

Questions
1. What drove the development of Biro’s ball-point pen?
2. Why did Biro enter niche markets in the first instance?
3. Discuss the role that intellectual property played in the evolution of the ball-point?
4. In your opinion, why did Bic succeed in global domination when other firms were in
the market before them?
5. To what do you attribute the success of the Bic Company?