P&G Japan Essay - 1395 Words about:reader?url=http://www.studymode.com/essays/p-g-Japan...

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P&G Japan Essay - 1395 Words

5-6 minutes

Probable questions
1. Does SK-II have the potential to become a global brand
within Procter & Gamble’s worldwide operations? Why or why
not? 2. Which of the three market options should Paulo
Decesare recommendation to the GLT? What benefits do you
expect to gain? What risks do you see? 3. How Should he
implement your recommended option? What are the
implications for P&G’s new post-O2005 organization? What
support and/ or resistance do you expect? How will you
manage it? 4. Why was SK-II so successful in Japan? How is
it creating value and what is the business model? 5. How
transferable is this model and what are barriers?
P&G Japan: The SKII Globalization Project

GLT – Global Leadership Team

GBU – Global Business Unit

Alan Lafley – head of P&G’s Beauty Care GBU

Paolo de Cesare – President of Max Factor Japan

Lafley’s organisation and budget, which would support the
global expansion of SK-II

Need evidence of the transferability potential of a brand

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Constraint – bold but disruptive Organization 2005

restructuring program GBUs took over profit responsibility
historically held by P&G’s country-based organisations

Early expansion

Principle set down by Vice President of overseas operations

Must tailor our products to meet consumer demand in each
nation Must create local country subsidiaries whose structure,
policies and practices are as exact a replica of the US P&G
organisation as it is possible to create Built a portfolio of self-
sufficient subsidiaries run by country general managers who
grew their companies by adapting P&G technology and
marketing expertise to their knowledge of local markets
1980s – 2 problems

1. Cost of running all the local product development labs and

manufacturing plants was limiting profits 2. Ferocious
autonomy of national subsidiaries was preventing the global
rollout of new products and technology improvements
Resistance due to negative impact on profits, for which the
country subsidiaries were held accountable Consequence –
regional headquarters became more active
i.e. Euro Technical teams were formed to eliminate needless
country-by-country product differences, reduce duplicated
development efforts and gain consensus on now-technology
diffusion Profit responsibility remained with country
subsidiaries

Late 80s early 90s

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Move to category management structure 1989 first global

category executives appointed
International division replaced with four regional entities –
North America, Europe, Latin America and Asia- each
assuming responsibility for profitability Impact – significant
boost in P&Gs overseas growth
To many in P&G, the matrix structure seemed an impediment
to entrepreneurship and flexibility

Jager – Japan General Manager – argued that without a major

in-country product development capability, P&G could never
respond to the demanding Japanese consumer and the tough,
technology-driven local competitors Emphasis on expansion
through more product introductions

Envisaged a technology centre that would support product

development throughout Asia and even take a worldwide
leadership role Consequence – P&G grew its 60-person R&D
team into an organisation that could compete

1990 – Jager became group VP for Asia

Organisation 2005

1996 – Jager COO - Development of new products as key to

future growth Became the champion of a Leadership
Innovation Team to identify and support major companywide
innovations
Superior product technology

If P&Gs growth would now depend on its ability to develop

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new products and roll them out rapidly worldwide, Jager

believed his new strategic thrust had to be implemented
through a radically different organisation
Culture

Slow, conformist and risk averse – stretch, innovation and

speed Leadership Innovation Team implemented a global
rollout of Dryel and Swiffer Impact – 18 months after entering
the first test market they were on sales in US, Europe, Latin
America and Asia
Processes...

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