P&G Japan Skii Case
P&G Japan: SK-II Globalization Case
SK-II is a high-end skin care product, which has proven to be a success in the highly selective and competitive Japanese cosmetics market. It fits in the Japanese environment nicely. For starters, the wealthy Japanese society gives P&G a large market to target. Also, the uniquely sophisticated habits of Japanese women means they are more likely to accept the more complicated procedure required by SK-II. SK II involves six to eight steps, which is more than the number of steps of any other skin care products used in the rest of the world (1, p.8).
Overall strategy of the of the organization
Given this product’s success in Japan for 1999 ($150 million in sales), P&G is considering expanding its SK-II into a global brand. When doing this, management has to consider how the Japanese market compares to the other markets being proposed (China and Europe) as part of their international expansion. They should also do a thorough analysis of each of the markets being considered for this product, and an analysis of their competitors’ firm wide international strategy. Because the Japanese market is very different from these other markets, the same level of success cannot be guaranteed. This includes the distribution channel and the supporting industries, e.g., TV advertising is relatively cheaper in Japan than in Europe.
Models and Theories
P&G’s International Business-Level Strategy.
Porter’s model suggests that international business-level strategies are usually grounded in one or more of these home-country factors (1, p. 274). Based on Porters model, the firm’s strategy, structure, rivalry and demand conditions seem to be significant for P&G’s international business-level strategy.
Firm strategy, structure, and rivalry: SK-II is the result of the combined ingenuity of P&G’s most talented technologists from its worldwide labs, as well as the specific expertise from a Japanese group. This combination worked
SK-II is a high-end skin care product, which has proven to be a success in the highly selective and competitive Japanese cosmetics market. It fits in the Japanese environment nicely. For starters, the wealthy Japanese society gives P&G a large market to target. Also, the uniquely sophisticated habits of Japanese women means they are more likely to accept the more complicated procedure required by SK-II. SK II involves six to eight steps, which is more than the number of steps of any other skin care products used in the rest of the world (1, p.8).
Overall strategy of the of the organization
Given this product’s success in Japan for 1999 ($150 million in sales), P&G is considering expanding its SK-II into a global brand. When doing this, management has to consider how the Japanese market compares to the other markets being proposed (China and Europe) as part of their international expansion. They should also do a thorough analysis of each of the markets being considered for this product, and an analysis of their competitors’ firm wide international strategy. Because the Japanese market is very different from these other markets, the same level of success cannot be guaranteed. This includes the distribution channel and the supporting industries, e.g., TV advertising is relatively cheaper in Japan than in Europe.
Models and Theories
P&G’s International Business-Level Strategy.
Porter’s model suggests that international business-level strategies are usually grounded in one or more of these home-country factors (1, p. 274). Based on Porters model, the firm’s strategy, structure, rivalry and demand conditions seem to be significant for P&G’s international business-level strategy.
Firm strategy, structure, and rivalry: SK-II is the result of the combined ingenuity of P&G’s most talented technologists from its worldwide labs, as well as the specific expertise from a Japanese group. This combination worked