Kao Corporation

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Problem Identification
Even though Kao Corporations high accomplishments in Japan and South-East Asia markets, it still encounters difficulties in expanding into foreign markets especially beyond South-East Asia. Expanding into foreign market refers to a company expanding its business to a new territory, location or country. This problem arose mainly due to the fact that they are not ready to expand into the foreign market and there are too many strong competitors. Expanding into new markets require a lot of resources, planning, and expertise. As such, Kao faced difficulties in expanding into the United States market. As stated in the case study, Kao’s competitors were using Kao’s products as a benchmark to develop their own products. This indicates that Kao is able and ready to produce innovative products but are not ready to implement and market it due to its lack in capital resources. As stated above, one of the sub problems being faced by Kao is the inability to implement successful advertising activities due to a lack of capital resources. Advertising plays an important role in ensuring that the product is marketed well among consumers especially in a foreign market. If there is no strong or effective advertising activity implemented, the brand awareness in the foreign market will be very low and thus, this will cut down on profit gained from venturing into the foreign market. Not only that, Kao’s unsuccessful advertising activity also created a gateway for competitors to copy their product ideas and market the products in more effective methods than Kao. This prevented Kao Corporation from expanding its products into the foreign market. Apart from that, Kao Corporation’s products are widely diversified and this weakens focus on marketing the individual products. Kao Corporation produces nearly 550 different products worldwide ranging from soap products, cosmetic products to food products. Because it is so widely diversified, Kao Corporation’s target market will span over a wide range of different types of consumers. Because of this, the focus on marketing each of the products is also diversified and this causes the marketing effectiveness into a foreign market to be weakened and more difficult.

The SWOT Analysis
The SWOT analysis is a method which is used to evaluate a company’s overall strengths, weaknesses, opportunities, and threats. The SWOT analysis can help the company to further understand its internal and external environment. The internal environment of a company can be analysed through its strength and weakness while the external environment of a company can be analysed through its opportunities and threats. Under Kao’s internal environment, several strengths can be observed. Firstly, Kao’s research and development department is very productive. In line with Kao’s slogan, “create products of superior quality that provide consumers with wholehearted satisfaction”, it is no doubt that Kao emphasizes and focus a lot of its attention in product innovation. With a productive research and development department, Kao easily responds to its market demands efficiently. This is also proven when other companies in Europe copied and developed its products as stated in the case study. Apart from that, Kao’s strength also lies in its reputation of having breakthrough products such as “Attack”, which was a combination of compact packaging with extra-cleaning power. Not only that, Kao’s reputation is further enforced when four of its other brands were listed as the top twenty of the “Brand Power Ranking”, researched by Nihon Kezai Shinbun. A strong reputation and high quality products has helped Kao market its products more easily in Japan as customers become more aware of the brand and its high quality products. However, Kao’s internal environment also contains weaknesses. Firstly, the company’s advertising activity is ineffective and insufficient. The main reason for its inefficiency is due to the fact that Kao...
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