P&G Japan: The SK-II Globalization Project


P&G Japan: The SK-II Globalization Project

Question 1 The current intense competition in various business lines have forced entrepreneurs to venture into global market places through business expansion. The case in point refers to P&G Japan: The SK-II Globalization Project which considers whether P&G have the capacity to make one of their line, SK-II products, a global brand. Paolo de Cesare, being the president of Max Factor Japan, had various strategic factors to consider before laying down recommendations to make to the global leadership team.

To start with, P&G global organization is in the midst of extensive restructuring which could be disruptive in various aspects. Trying to implement such a project at this time would mean being exposed to a number of risks one of them being immature collapse. Secondly, whereas SK-II was very successful in Japanese market, taking it to global levels would be challenging because the tastes and preferences of the consumers could be different.

It is important to bear in mind the fact that other firms have already ventured into the markets in other countries and they already know their culture. No one would be certain that the local success could be automatically reflected in global levels. Thirdly, it was very clear the cost of running local manufacturing labs and plants was in the long-run limiting the profits. The idea of coming up with such a project would be greatly opposed to the local managers because it could further reduce the returns of local companies.

Lastly, there is a high likelihood that SK-II, having accrued much success locally would as well reflect the same in global levels probably through application of product development technology previously recommended for Japanese consumers. Question 2 Whilst Mr. Jager, the chief operation manager anticipates that there would be a growth of between 13% and 15% which would result in an estimated value of $900 million in annual savings (Bartlett), there are various implications of P&G post 2005 organization.

In general, Mr. Jager wanted the traditional systematic way of operation in the company mainly through increasing pay-based performance. On the other hand, employees were motivated through extension of stock option from senior management to the lower level staff. In his endeavor to create an integrated process in business planning, he ensured that all plans were sanctioned together. The most drastic implication was changing the profit responsibility from only four regional organizations to seven business units. Manufacturing process were standardized with the same case applying to market activities coordination and brand portfolios.

Question 3 In order to have a proper use of available resources, firms that would like to venture into global markets must come up with the right strategy in order to get insight of all the arrangements done in this quest. When a consumer need was identified in global market level, various options were considered to strategically get into the market. Firstly, a technical model was developed to efficiently respond to this need. In simple terms, there was a special need in facial cleansing products globally, which immediately posed a technological challenge.

Secondly, qualified expertise was brought in to evaluate and formulate the right marketing strategies to penetrate the market with this new technology. Because this was a new-product concept in the market, there was need to radically enter into the market which was done through development of the Olay version whereby they identified the ultimate facial cleansing experience for women in US. Lastly, both the marketers and the technologists were designated with the obligation of making sure that the variation in ingredients of the facial cleansing products was appropriately adapted in the new markets.

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