P&G Japan: The SK-II Globalization Project Harvard Case Solution & Analysis

Answer 1:

As both the leaders are convinced on expanding SK-II globally, but in order to achieve this objective, they should consider the threats and risks associated with this move. The R&D has to play its role as well, and extensive research is required to identify the possible opportunities and the reasons that will lead to the success of this move. On the other hand, research will also identify the possible threats and causes of failures that are likely to occur along with the associated risks.

The three options available must be analyzed properly, and the industry analysis with respect to the country should be done to analyze the possible threats and opportunities in that country. From the options available, the best country should be selected to avoid product cannibalization and to complete the task of making SK-II a global brand. The product is successful in countries where the cultural differences are less and is considered as a lucrative market for skin care products.

Targeting new markets for SK-II will be a challenging task and the product may not witness the same success as it has in Japan. The product has a firm competitive advantage in Japan as the product is serving the needs of the consumers and also achieving customer satisfaction. The three options are analyzed below, and the most preferred one is expanding the brand in Japan. The reasons for attractiveness and restrictions are discussed. It is suggested that expanding in Japan should be a priority, followed by a move towards China in the coming years, but not so quickly.

Exploiting Japanese Market

The sales of SK-II are growing and have a strong position in Japan and the company holds the maximum market share in the market. Therefore, the company should go for an extensive exploitation of the Japanese market since the market is expected to grow more and with innovation, the product is estimated to double its sales in the coming 6-7 years. With this move, an additional market share for Max Factor Japan can be gathered that will further increase the revenues and strengthen its hold on the Japanese market.

On the other hand, the product is best suited for the Japanese consumers, also the women in Japan have made a strong relationship with the brand. The market’s attractiveness is another factor for which the company should opt for staying in Japan and take hold of the market through research and innovation. Customer loyalty for SK-II can be identified by analyzing the expense a customer spend on SK-II annually that is more than the total expense of consumers on the other products of P&G combined.

This shows how attractive the Japanese market is for SK-II and why the need of exploiting this market can prove to be significant in the coming years. Making a firm hold in the Japanese market and then going global is a less risky move as the company will be able to suffice the initial loss in the global market through high sales in the Japanese market. On the other hand, moving the product outside Japan and searching for a global market is quite expensive. Compared to expansion in global markets, expansion in Japan is less expensive and has other advantages as well.

The consumer is aware of the market and marketing expenses are very low as there is no need of creation required. Only the marketing strategy needs to cater the market presence and keep the consumer informed about the presence of the brand. Besides that, since De Caser is the head of the Japanese market and he has the authority in Japan, where he can monitor the progress and bring necessary changes while in the global market this advantage is not there therefore, staying in Japan and expanding is the best move.

China as the Second Alternative

The Chinese beauty market is growing with a rapid pace, and the analyst shows that the annual growth rate of the market is 30%-40%. Olay is still catering the Chinese market and by launching SK-II as an individual premium brand in the Chinese market, P&G can gain an edge of serving the spaces that are left and not catered yet..............................

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