Strategic competitiveness is accomplished when an organization fortunately composes and executes a profitable strategy. Concerning the organization’s environment, the system dictates the goals and objectives of the organization. Strategic management is how the administration decides the firm’s long-term plan. The SK-II Globalization Project fundamentally scrutinizes whether P&G will make the SK-II products international. This report will cover SK-II, the global business unit of P&G Company, which was opened in Japan and expanded later to the rest of Asia.
SK-II management knew that their products were helpful and had value to consumers – a value proposition. This knowledge allowed them to spread to Hong Kong and Taiwan because they used an effective product introduction strategy. By including a famous actress in the advertisement, the company stimulated interest by increasing confidence in the product. It is how SK-II implemented its business strategy of pressuring Japanese women through beauty stereotypes (Bartlett, 2004). To do this, they used innovative tools to introduce new products: Lipfinity lipstick became popular even in Europe because Asian consumers were involved in its distribution. Through other innovative programs (O2005), SK-II entered the global market and distributed cosmetic products in China, Taiwan, and other countries.
SK-II’s growth strategy is to differentiate its products and move into broader consumer markets. By selling SK-II Foaming Mass skin products, the company grew in revenue and expanded its lineup. The company’s growth is justified by choosing a leadership strategy in resource and people management. De Cesare analyzes the global potential of SK-II to offer the world the brand and its focus on beauty care products innovations. These innovations are implemented by a trained team of employees who realize specific goals: some work in the information sector while others are in marketing.
Competent leadership and management of people and resources are implemented through organizational culture. The reorganization was initiated together with the direct division of P&G. The SK-II business unit resulted from P&G reorganization making its president report to Lafley’s Beauty Care GBU and head of MDO in Asia. From that point on, the organizational culture changed from “wasting time filling out reports and memos” to implementing new operating systems and rethinking its goals (Bartlett, 2004). The company created a unique culture: employees must work for the company’s prosperity through innovation and engagement with customers. In addition, the company structured its business succession rules: De Cesare was selected to replace Lafley’s position after leaving SK-II for Beauty Care GBU.
Through these changes, SK-II moved to new marketing plans from local market testing to global sales. Initially, innovative products were introduced to the local market, after which the company made adjustments in advertising and sales style and captured other market niches. The success of this strategy was substantiated by operational management, which was firmly entrenched by re-positioning business targets. In particular, R&D operations for technological design and implementation of the O2005 system gave the SK-II business unit a competitive advantage and magnetic products to maintain its customers (Bartlett, 2004). The company gained an advantage and gained customer support by implementing these marketing operations.
SWOT & PESTLE Analysis
SK-II’s strengths lie in its focus on innovation in production and network distributions. However, significant weakness is the organization’s reluctance to adopt new procedures. The SK-II realizes its potential by advertising to increase sales, customer awareness, and advanced technology. There are many competitors in the market, a declining birth rate, and imitation of strategy. PESTLE analysis of SK-II shows that the company has political stability, which provides a consistent payback. However, the company’s economic benchmark is weak, and consumers may reject the products (Bartlett, 2004). When consumers are ready to spend more on goods and services in their lifestyle, this gives SK-II a chance to produce new products on the market. The SK-II predicted existing and future trends in technology for long-term business thriving. Before getting into a new market, De Cesare has to analyze the business laws and how they differ from the homeland market. The SK-II complied with international and local environmental directives to avoid damaging its reputation.
Threats and Entry Mode
Entering a new market has a significant risk of failure; therefore, researching ways of entry strategy can assist in choosing a plan. SK-II business unit had investigated the best market entry with minimum threat for their beauty care products. The hiking competition would present SK-II Q with an opportunity to develop privately (Bartlett, 2004). Understanding the O2005 plan would affect the branding and identify cultural aspects.
De Cesare recommended the extension of SK-II in China, market entry in Europe, and making the trademark success in Japan. The benefits include profitability in Japan due to a loyal customer base and increasing demand for the product, which can be a long-term success. Risks include trademark savaging by the likes of Olay and enormous cost outpouring if the strategic entry in China and Europe is proposed (Bartlett, 2004). SK-II takes a short duration to make a brand name outside Japan even though it was less popular outside Japan. Japanese women were amongst the biggest consumers of beauty products, giving out opportunities even for other facial cleansing products.
The report has investigated SK-II globalization project strategic management using different marketing theories. SK-II used a business strategy to reorganize its culture and implement new marketing plans that allowed it to enter the global market. In addition, the company has a strong social focus and the ability to shift to innovative strategies to introduce its products. Based on this, we can assume that the company’s future will be successful if it is more cautious and looks for ways to achieve economic development.
Bartlett, C. A. (2004). P&G Japan: The SK-II globalization project. Harvard Business School Case 303-003.