P&G Japan Skii Case Study

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Case 5-2 P&G Japan: The SK-II Globalization Project -P&G’s Internationalization: engine of Growth In the early expansion, a principle set by the first vice president of overseas operations--Walter Lingle: “We must tailor our products to meet consumer demand in each nation. But we must create local country subsidiaries whose structure, policies, and practice are as exact a replica of the U.S. P&G organization as it is possible to create” response: country general managers (GMs) soon built a portfolio of self-sufficient subsidiaries (based on their knowledge from local market) 2 problem: 1. Large cost for running all the local product development labs and manufacturing plants, limited the profit 2. Autonomy of national subsidiaries was preventing the global rollout of new products and technology improvements reason: negative impact on local profits result: take a long time to introduce new products Consequently: “hands-off” regional headquarters became more active e.g. Euro Technical Teams: formed to eliminate needless country-by-country product difference, reduce duplicated development efforts, gain consensus on new technology diffusion Subsequently: region wide coordination spread to purchasing, finance and marketing e.g. mid-1980, three European regional vice presidents was given coordinative responsibility for a product category. -Birth of global management---structure changed -1986: P&G break 7 divisions into 26 product categories (each own product development, product supply, sales and marketing capabilities) Benefit: benefit for developing global strategy, managing the technology program and qualifying expansion markets Limitation: not profit responsibility, rested with the country subsidiary GMs -mid 1990: P&G replaced its international Division with four regional entities: North America Europe,

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