P&G Japan Case(rocky)

P&G Japan Case(rocky) - Rakesh Nallavalli...

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Rakesh Nallavalli MGMT-6543-01 28 th October, 2009 Executive Summary This case examines P&G and whether or not they have the ability and means to make their SK-II product a global brand. In this case, we examine P&G's need for a new global strategy and their ability to develop SK-II into a worldwide beauty product. Ultimately we will see that P&G needs to expand their hold in the Japanese market while becoming more familiar with the needs of potential markets. In recent years Paolo de Cesare was very successful at the head of the European and Japanese Max Factor divisions, but the idea of taking the SK-II that was so successful in the Japanese market global is very risky. Up until the 1980's, P&G Japan was only a minor contributor to the P&G international growth. In 1985, Durk Jager found that the key reasons for the failure lied in the fact that they had not recognized the distinctive needs of the Japanese consumer. Over the next four years under his management changes were made to research, advertising and distribution resulted increase in sales which in turn reduced unit production cost by huge margin. Early expansion In early 1980’s vice president of P&G set down some principles to make their product globalize. He taught that their products must tailor our products to meet consumer demand in each nation, must create local country subsidiaries whose structure, policies and practices are as exact a replica of the US P&G organisation as it is possible to create and built a portfolio of self- sufficient subsidiaries run by country general managers who grew their companies by adapting P&G technology and marketing expertise to their knowledge of local markets.
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1980s – 2 problems 1. Cost of running all the local product development labs and manufacturing plants was limiting profits 2. Ferocious autonomy of national subsidiaries was preventing the global rollout of new products and technology improvements Resistance due to negative impact on profits, for which the country subsidiaries were held accountable Consequence – regional headquarters became more active i.e. Euro Technical teams were formed to eliminate needless country-by-country product
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P&G Japan Case(rocky) - Rakesh Nallavalli...

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