P&G in Japan Case Analysis

Despite radically different cultural norms, consumer preferences, and business structures versus the United States, Japan is definitively a market that P&G should continue to do business in. With a population that is more than half the size of P&G’s largest market (U.S.A) and a per capita income higher than other major markets for P&G (such as West Germany), Japan is simply a market that P&G cannot exit if it hopes to continue to grow internationally. In fact, Japan is the second largest market for consumer-packaged goods in the world behind the United States. Despite numerous faulty strategies and a stubborn unwillingness to adapt any form of localization in its products or processes to resonate with the Japanese consumer, P&G proved in its first decade in Japan that it could make a sizable impact in grabbing market share. For example, P&G was able to assume a near 20% market share within just four years in Japan within the detergent market. In addition, P&G proved initially successful in transforming a category and gain a dominant share position in Japan through the launch of disposable diapers. Overall, within just seven years P&G was able to generate over $217 million in net sales. However, through multiple faulty strategic assumptions, P&G has seen a meteoric decline in share and net sales in less than half the time it took to hit its peak. Despite P&G’s complete ignorance to the political, economic and social norm barriers of the Japan market, there is great potential for P&G to reverse its downward trends in Japan by correcting fundamental flaws in its strategy.

Assuming P&G stays in the Japanese market, it must correct a number of the faulty assumptions it made regarding the positioning of it brands, the supply chain methods it employs to deliver goods to market, and its fundamental innovation processes. Despite a rigid U.S.-based business mentality and a near complete lack of