P&G Japan: Sk-Ii Globalization

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In the highly competitive Japanese skin-care market, P&G¡¦s new SK-II product has proven its success as a premium and prestige offering. P&G has gained significant knowledge transfers from SK-II development and further, has successfully tapped the fickle Japanese market and has devloped 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 international market. However, while there is significant worldwide growth potential within the $9 billion prestige skin-care industry, based on recent organizational changes, new corporate priorities, and thorough market assessment, P&G must base its decision on current resources and capabilities to effectively maintain profitability. In analyzing the three options of Chinese expansion, European roll-out, and further growth of Japanese market, P&G should continue to concentrate its efforts in Japan to further penetrate and grow its share (only 3% of a $10 billion beauty market).

There are a number of factors under consideration when analyzing and weighing business opportunities for each of the three markets. In the first stage of this analysis we reviewed each regional market to size respective target consumer, weighed barriers to entry, and determine each market¡¦s stage of growth in addition to potential. Second, we studied the markets to determine whether successful entry would be permitted due to current constraints/limitations and further, whether it made business sense for the new P&G global strategy (fit). Finally, a competitive landscape assessment of each region¡¦s skin-care market allowed us to understand the viable success of SK-II within its peer product offering space.

Chinese Expansion: China is predicted to become the second largest beauty product market in the world, with the prestige cosmetics segment growing at 30 to 40% per year. With few competitors serving this segment, potential growth...
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