Group C Alexander Kuchin Sandeep Joy

Opportunity:
P&G saw three alternatives for SK-II product:

To diversify into new products as an extension to the success of its product in home Japanese market. To penetrate the vast Chinese market. To introduce the product to highly competitive European market.

Facts- P&G
Engine of growth was the setting up of Overseas Division in 1948. By 1980, P&G internationalized in over 27 countries-Europe, Latin America & Asia. Setting up of local country subsidiaries as a replica of main headquarters. In 1986, the structure of P&G was redefined. From 7 divisions to 26 categories.

Adopted the mother-daughter structure.

1. Subsidiaries reporting directly to corporate headquarters.

2. Relatively autonomous Global Business Units.

3. International rotation of personnel used heavily as a co-ordination mechanism.

The Organizational structure further adopted a hybrid structure.

Product structure: supporting global products Geographic structure: emphasizing local adaptation.

P&G Multinational often adapted both abilities.

Use hybrids (such as matrix structures)

As a result
The success of strong regional organization - Changed its International division into four main entities. - North America,Europe,Latin America & Asia for responsible for their own profitability. Major new expansions shrinked the companys growth. The matrix structure adopted seemed complex.

Strategic Alternatives:
First step in developing a programIchidai Hiyaku (The Great Flying Leap) in 1985. Depending on its strength i.e SK-II huge success and venturing out with new products. Led to the findings to main causes for failure in Japan. Launch of O2005 process.

#1. Extension of the product-Japan

For Against

#2. Penetrate in Mainland China.

For
Importance of being the first in the market

Against
Lower profit margin

The third China is a big customer group as in big markets. (Ram)

Existence of counterfeit prestige products

High growth of prestige beauty market

High import duties

Huge market.

Distraction to P&Gs main strategy in China

#3. Introduce it in European market

For Against

FINAL SOLUTION:

1st Solution - To continue gripping more in the Japanese market.

2ND Solution - To officially launch SK-II product in China.

Final words
Definitely believe that SK-II has the capacity to go global. The O2005 program would strengthen its organizational structure. Being one of the Giant MNE in world, has innovative strategies that can help to balance the break evens with stronger GBUs.

THANK YOU FOR YOUR ATTENTION