SK-II having the potential to develop into a major global brand
Yes, SK-II had a potential in developing as a major global brand. This is attributed to the fact that, SK-II had an advantage of being within Procter and Gamble which is an established brand globally. The only difference was that they would be dealing with varied consumers hence, different strategies and tactics were to be employed. As a skin care product, it has an exclusive eight steps in total number varied from any other product globally. Through this, P&G is in a position in obtaining high margin product and giving a product of high quality. SK-II as a product also has a distinct un-perfumed and clear liquid of the highest quality. Being part of P&G that mainly favors the wealthy in the Japanese market; it specially attracted the sophisticated women from the Japanese market. Therefore, its market is ready in the local Japan market in relationship to the 1999 successful sales of $ 150 million.
Markets that is most important to enter
The two most important markets that SK-II should enter include the Chinese and European market. This brand success in the two markets is replicated by considerations based on structure, rivalry, demand conditions in these markets and firm’s strategy. Considering SK-II being within P&G, an established brand, the brands success can be replicated in these regions since P&G other consumers’ products have penetrated the two markets. Hence, competitive advantage is a key factor to be considered in the two markets researched. The Chinese beauty segment is continuously growing and thus attracts new beauty firms with a higher competitive edge due to threat from substitute product. In Europe, the highly sophisticated nature of the brand as a substitute product is an advantage while high bargaining powers from the buyers can be a hindrance due to several other options. The criteria that has been used in choosing these markets is basically the involvement of analyzing the target market, the product as a substitution for other beauty products, the market structure of China and the UK. Also, the past experience of Procter and Gamble as an international corporate level strategy has been considered to be transnational in nature and thus proper strategic structures are being put in place.
Implementation in P&G’s newly reorganised global operations
In order to effectively implement the entry of SK-II product into these markets, it is vital to consider the creation of subsidiaries in the local countries whose policies, structures and practices almost duplicate the Procter and Gamble in the United States as organizational conditions. The analysis of industrial environmental factors using the Porter’s five forces of competition is also vital for this process. This enables the determination of the number of customers available, the competitors and the channels to be used for distribution process. The Porter’s analysis method can aid in determining if the chosen markets are feasible for this product. Restructuring programs should also consider the cultures that are maintained in the chosen markets. Proper allocation of budget is essential for the implementation process especially for advertisement. This is because; it is through adverts that most products are able to penetrate a specific market. Therefore, to make the new launch a success, this organization has to compare the other proposed markets to Japanese market as an element of expansion internationally. Analysis of the product, consumers, competitors and distributive channels are also important for this scenario.