Author: Christopher A. Bartlett Source:
HARVARD BUSINESS SCHOOL PUBLISHING
Description: Organization 2005, a reorganization that places strategic emphasis on product innovation rather than geographic expansion and shifts power from local subsidiary to global business management. In the context of these changes introduced by Durk Jager, P&G’s new CEO, Paolo de Cesare is transferred to Japan, where he takes over the recently turned-around beauty care business. Within the familiar Max Factor portfolio he inherits is SK-II, a fast-growing, highly profitable skin care product developed in Japan. Priced at over $100 a bottle, this is not a typical P&G product, but its successful introduction in Taiwan and Hong Kong has de Cesare thinking the brand has global potential. As the case closes, he is questioning whether he should take a proposal to the beauty care global business unit to expand into Mainland China and/or Traces changes in P&G’s international strategy and structure, culminating in Europe.
Case Study Analysis : P&G Japan: The SK-II Globalization Project Questions:
1. Should Paolo recommend to the beauty-care GBU that SK-II become a global brand? Priced at over $100 a bottle, the SK-II is not a typical P&G product, but its successful introduction in Taiwan and Hong Kong has Paolo thinking the brand has global potential. Baring in mind all of the above there are a few issues that Paolo should consider: 1. Organize the Company Along Product Lines not Geography
2. Continue to be the Technology Leader
3. Roll Out to Other Asian Countries
4. Sell off the SK-II Product Line
As a premium and prestige offering. P&G has gained significant knowledge transfers from SK-II development and further, has successfully tapped the Japanese market and has developed a loyal user-base in Taiwan and Hong Kong. With its phenomenal success, it is only logical that P&G consider rolling-out the SK-II product-line to the...