Profile P&G japan

Organization 2005
Blue print for global growth : 1. New product Development as the key of P & G future growth 2. Increasing the budget for R & D from marketing Expense 3. Closing 10 plans and loss 15000 worldwide workforce

organizational change Changing on culture

P&G culture from slow, conformist and risk averse to stretch, innovation and speed.

organizational change Changing on Process

Performance based component of compensation increased from tradisional range of 20 80 % Extended the reach of stock option to virtually all employees Integrated business planning proess reviewed and approved together

organizational change Changing on Structure

shifted from Primary profit responsibility 4 Regional organization to & GBU Increasing efficiency by : Standardizing manufacturing process Simplifying brand portfolio Coordinating marketing activities Eliminate bureaucracy and increase accountability Committee responsibility were transferred to individuals

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

1.

2.
3.

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.

Industry Enviroment Analysis Five porters model

SK II Global brand in opportunity in japan

Benefit

SK-II has already a strong position in this market, good brand awareness, high profit, high quality Japanese beauty market has a high capacity /low cost production Innovative BIS system

Risk

Brand growth rate had slowed over the past years Customers are very demanding and unpredictable

SK II global brand to penetrate in chinese market

Benefit
Chinese prestige-beauty segment is growing fast (30-40%) Huge marke

Risk

Lower profit margin Customer might not be ready for SK-II six-step regimen Existence of counterfeit prestige products Such expansion does not suits O2005 strategy (might not agreed by GLT)

SK II global brand entry European Market

Large & sophisticated beauty benefits concious customer

Risk

Such expansion does not suits O2005 strategy (might not agreed by GLT) High losses would occur during start-up period (pressure on SK-II budget) Only UK market perspective No brand awareness Large variety of establish brands

Recomendation
Japan: SK-II has a good position on massive Japanese market and the most attention should be paid to it. The brand slowed growth rate could be overcome with the more attention on developing of new innovative products and well-coordinated marketing. Mainland China: SK-II should be expanded at least to the main citiesBeijing, Shanghai and Guangzhou where the wealthy Chinese consumers have the highest concentration. Moreover, SK-II is successfully presented Japanese counselor model in Taiwan and Hong Kong and there is a little doubt that this model will not applied to above mentioned mainland cities.

Recomendation
The UK (European) The UK expansion is the least likely to be approved by the GLT. To get consumers loyalty SK-II would need to make massive expenses on advertising and adapting to the European distribution model. Definitely believe that SK-II has the capacity to go global. The O2005 program would strengthen its organizational structure. Finally, SK-II is recommended to concentrate on the core Japanese market and expand to Mainland China market. This strategy will perfectly suit the