Procter and Gamble Japan: the SK 2 Globalization Project

Résumé du document

Procter and Gamble have been operating internationally for decades.

Number of countries in which P&G has been operating over years

As we can see, there had been brisk development during the ‘50s and the ‘60s. Then, the internationalization process stagnated during the ‘70s. A second wave of development occurred in the ‘80s, which can be explained by the collapse of the Communist system and the opening of new markets. However, as internationalization opportunities will be hard to come by in the 21st century, P&G has to find new prospects for growth.

This is also illustrated by itsfinancial results
It is interesting to note that at the beginning of the ‘80s, as P&G internationalization was slowing down, it experienced a sluggish growth in sales, which resulted in stagnation. A similar phenomenon was witnessed at the end of the ‘90s, and this might be related to a decline in the internationalization opportunities for Procter and Gamble.

Extraits

[...] Indeed, targeted consumer groups already shop in these stores, and some well targeted point-of-sale communication, as well as some publicity in high-end magazines, should be sufficient to drive the consumer to the SK-II counter where he would receive service and advice. In this case, word-of- mouth has a great role to play. Once SK-II has gained a foothold in the UK market, it will be easier for the brand to position itself as a global prestige skincare brand, and access to other markets such as USA and Ireland would be made easier. How does SK-II development fit into P&G global organization? [...]

[...] It planned the creation and development of new products on a global scale and not anymore on a local one. Close collaboration between GBUs and the GMs was highlighted. Simplification was the key word. It is important to highlight that the MDOs of developing markets were at first responsible for profit: is this not an obstacle to innovation and risk-taking attitudes? Furthermore, objectives were expanded and initiative budgets were integrated more among services, so as to enhance motivation and communication. [...]

[...] To begin with, products are now supposed to be developed globally at P&G. This is not a problem for luxury products, wheras mass market products are much more frequently linked to national preferences. Moreover, When it comes to cosmetics, Japan is well known as the most demanding country in the world, both because of legal requirements as well as customer expectations. Therefore, a product developed for the Japanese market might be sold much more easily anywhere else in the world than the opposite. [...]

[...] As we shall see later, it is important that SK-II maintains a close relationship with its roots. The fierce competition expected from firms such as Shiseido can be overcome more easily than from any other competition abroad, as SK-II is well- acquainted with its market. Therefore, investments on product innovation and service improvement have to be done. It will serve as a crucial step to build on the current loyalty towards SK-II, and gains in market share can be expected. [...]

[...] Procter and Gamble Japan: the SK 2 Globalization Project 1. Issues faced in the internationalization A structure and a culture that prevent the quick spread of innovations The Japanese Failure Can SK-II become a global brand? SK-II concept and the reasons of its success SK-II international potential Dramatically Different Opportunities to develop SK-II further Developing further in Japan? Going into China to benefit from its growth? Some opportunities in Europe? What are the most important markets to enter? How does SK-II development fit into P&G global organization? [...]