P&G Japan Essay

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 Performance-based component of compensation increased from traditional range of 20% to 80%. Extended the reach of stock options to virtually all employees Integrated business planning process where all budget elements of the operating plan could be reviewed and approved together Structure Primary profit responsibility shifted from P&Gs four regional organisation to seven GBUs that would now manage product development, manufacturing and marketing of their respective categories worldwide Charged with standardising manufacturing processes, simplifying brand portfolios and coordinating marketing activities Eliminate bureaucracy and increase accountability Committee responsibilities were transferred to individuals Activities such as accounting, human resources, payroll and much of IT were coordinated through a global business service unit Progression form Ethnocentric/Polycentric- Regiocentric – Geocentric SK-II – within P&G this high-end product had little visibility outside Japan Because Japanese women had by far the highest use of beauty care products in the world, it was natural that the global beauty care category management started to regard Max Factor Japan as a potential source of innovation Working with R&D labs in Cincinatti and the UK, several Japanese technologists participated on a global team that developed a new product involving a durable color base and renewable moisturising second coat – Lipfinity Japanese innovations were than transferred worldwide, as Lipfinity rolled out in Europe and the US within six months of the Japanese launch Implementation of O2005 in July 1999 – half the top 30 managers and a third of the top 3000 were new to their jobs – capabilities do not reside in management Global product development process Technology team assembled at an R&D facility in Cincinnati, drawing the most qualified technologists from its P&G labs worldwide US-based marketing team and Japanese team had the same task – Japanese team came up with SK-II In the end, each market ended up with a distinct product built on a common technology platform. Marketing expertise was also shared, allowing the organisation to exploit local learning Decisions Japanese Opportunity Tapping into P&Gs extensive technological resources – extend the SK-II line beyond its traditional product offerings Although would take a considerable amount of time and effort, it would exploit internal capabilities and external brand image Product innovation and superior in-store service – competitive advantage in Japan China Operating since 1988 only Entrepreneurial beauty care manager in China Some were worried that SK-II would be a distraction to P&Gs strategy of becoming a mainstream Chinese company and to its competitive goal of entering 600 Chinese cities ahead of competitors Targeting an elite consumer group with a niche product was not in keeping with the objective of reaching the 1. 2 billion population with laundry, hair care, oral care, diapers and other basics Europe De Cesare – new the European market well Without any real brand awareness or heritage, would SK-II’s mystique transfer to a Western market Organisational constraint De Cesare recognised that his decision needed to comply with the organisational reality in which it would be implemented Jager – openly questioned how well some of the products in the beauty care business fit in the P&G portfolio – the fashion-linked and promotion-driven sales models neither played well to P&G’s â€Å"stack it high, sell it cheap† marketing skills nor exploited its superior technologies From a local to a global focus