Kao Corporation

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Kao Corporation


Kao Corporation is a Japanese manufacturing company. This company is Japan’s largest soap and cosmetic company. They have developed from being a minor player to being number two in the Japanese market in less than ten years and are the sixth largest soap and cosmetic company in the world. The company’s success was due not only to its mastery of technologies nor its efficient marketing and information systems, but to its ability to integrate and enhance all these capabilities through learning. In other words, it recognizes that competitive advantage flows from people’s ability to constantly enhance their knowledge and skills. Kao Corporation is currently a multi-domestic company with operations around the world. However, Kao Corporation has operations in 3 major regions; Asia, Europe and North America. Within each country, Kao Corporation sets ups its operation in the form of Foreign Direct Investments or Joint Ventures.

❖ Introduction

Kao was founded in 1890 as Kao Soap Company, a family run soap manufacturer. The company was built on the basis of a simple strategy; produce soaps equal in quality to imported brands but at more reasonable prices.

1890Kao Soap Company – “Cleanliness is the foundation of a prosperous society.” 1940Kao launched the first Japanese laundry detergent 1950Kao launched dishwashing and household detergents 1960Kao’s expansion into industrial products whereby the corporation could apply its technologies in fat and oil science, surface and polymer science. 1970-1980Presidency of Dr. Matura – the company grew rapidly than ever in terms of size, sales and profit with the launching of innovative products and the start of new businesses. 1982-1985Kao diversified successfully into cosmetics, hygiene and floppy disks.

Kao combines the strengths of a formalized product development system with the cultural values of learning and continuous improvement to ensure that innovation succeeds on a continuing basis. At the same time their commitment to R&D and to developing and exploiting strong technological competencies provides a rich pool in which to fish for new development possibilities. Targeting where to move next in volatile consumer markets is helped by rich and extensive information systems which connect the market rapidly with the R&D and the manufacturing of the business.

❖ Define context

Kao’s founders:The Nagase family
Core Business:Midstream/Downstream Strategy
Industry/Sector:Prestige Cosmetics and Chemical Products Key Sales Markets:North America, Europe and Asia
Competitors/Rivals:Lion, Procter & Gamble, Unilever, L’Oreal, Shiseido and Kanebo High-tech/Low-tech:High-tech
Market Environment:Increasingly competitive
Customer Profile:Since its establishment in 1890, Kao Corporation has strove to adapt to changing market needs of consumers worldwide and provide them with a wide range of excellent products to suit their everyday needs. Benefits:Constant learning and improvement of operating processes Client Information:Kao Corporation specializes in the manufacturing, marketing and sales of prestige cosmetic chemical products. Their range of products extends from personal care products to products used in the food industry. Prestige cosmetic, baby care and health care products are also a major part of their product portfolio. Kao Corporation operates at a global level exporting to North America, Europe and Asia.

New Product Development (NPD) at Kao is guided by four principles (Example; Sofina):

- Every product must be useful to society
- Products must use innovative technology
- Products must offer customer value
- Consumer needs and reactions to products...
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