50184194-SKII - 1 As Paolo DeCesare what factors do you...

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1] As Paolo DeCesare, what factors do you need to consider before deciding what to recommend in your SK-II presentation to the global leadership team (GLT)? What kind of analysis will you need to do in preparing for that meeting? 1) This is P&G’s first-ever proposal to expand a Japanese brand worldwide. Other countries have a different culture than that of consumers in Japan which is why this is a big risk. 2) P&G’s global organization is in the midst of a 2005 restructuring program; it can be disruptive. 3) Local general managers’ resisted emergence of new products because of the negative impact on local profit. 4) Lafley’s POV was that most of the advertising budget should be spent on two products- MaxFactor Color and SK-II; SK-II had such a high margin. 5) De Cesare’s POV was there is a great opportunity for SK-II to break into the $9 billion worldwide prestige skin care market. 6) Jager’s POV was that a major product development technology center was needed for demanding Japanese consumers; this would also support product development throughout Asia and other parts of the world. 7) Ram’s POV was SK-II should be introduced into Chinese department stores as Oil of Olay moves into “second-tier stores”; also predicted China to be the 2nd largest market in the world for prestige beauty products. 1) How would the cultural and organizational changes of O2005 affect SK-II in becoming a global brand? 2) The analysis should be based on the business model of SK-II and it shall be very important to understand if the business model of SK-II aligns with the cultural and organizational changes of O2005. 3) Which countries are most attractive? 4) Which entry strategies should be implemented?

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