P&G Japan: The SK-II Globalization Project
In November 1999, Paolo de Cesare was preparing for a meeting with the Global Leadership Team (GLT) of P&G’s Beauty Care Global Business Unit (GBU) to present his analysis of whether SK-II, a prestige skin care line from Japan, should become a global P&G brand. As president of Max Factor Japan, the hub of P&G’s fast-growing cosmetics business in Asia, and previous head of its European skin care business, de Cesare had considerable credibility with the GLT. Yet, as he readily acknowledged, there were significant risks in his proposal to expand SK-II into China and Europe. Chairing the GLT meeting was Alan (“A. G.”) Lafley, head of P&G’s Beauty Care GBU, to which de Cesare reported. In the end, it was his organization—and his budget—that would support such a global expansion. Although he had been an early champion of SK-II in Japan, Lafley would need strong evidence to support P&G’s first-ever proposal to expand a Japanese brand worldwide. After all, SK-II’s success had been achieved in a culture where the consumers, distribution channels, and competitors were vastly different from those in most other countries. Another constraint facing de Cesare was that P&G’s global organization was in the midst of the bold but disruptive Organization 2005 restructuring program. As GBUs took over profit responsibility historically held by P&G’s country-based organizations, management was still trying to negotiate their new working relationships. In this context, de Cesare, Lafley, and other GLT members struggled to answer some key questions: Did SK-II have the potential to develop into a major global brand? If so, which markets were the most important to enter now? And how should this be implemented in P&G’s newly reorganized global operations?
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