SK-II is originated in Japan and is being exported to other countries including China. It is easy for SK-II to have a market share in China because of similar skin type of Chinese to that of Japanese (whom it was originally introduced) and their developed skin care practices. They were also at ease to penetrate China because they already had existing distribution networks as well as trained counselors who will now be a one of their means to increase sales by promoting the product through direct contact with customers. This will subsequently result to emergence of satisfied customers will spread the news about SK-II being a valued product. In some other ways, it will now lessen the cost of advertising and thereby leading to enhancement of revenue and economies of scope. This could be further manifested by low cost of labor in China that favorably increases revenue. Shiseido, a beauty product that holds the largest market share in China have been outperformed by SK-II which signifies the successful entry of the product in the market which will now cause the product to be more saleable and because of that, they already established value in the market and subsequently is being able to increase the prestige beauty segment.
SK-II however, though had many opportunities also have threats and some of them are contradicting to their perceived opportunities like having low average income despite the low labor cost and lessen advertising costs, it is a threat for them to consider because despite their efforts to create value out of their product, why do their average income is still low? Another is that, though they outperformed Shiseido that is considered the first mover in the Chinese market, it is still possible that because of what they call “customer loyalty”, consumers will go back in consuming the said competitor’s product if they are not being satisfied by SK-II.
The greatest threat perhaps is with regards to regulatory/ legal/...
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