P&G: Sk-Ii

CASE STUDY ANALYSIS OF P&G: SK-II GLOBALIZATION PROJECT

FOR:

Professor Howard Kupferman

Written by:

Andres Torres

Procter and Gamble Case Study Analysis

Actors:

1. Alan Lafley: Head of P&G Beauty Care GBU

2. Paolo de Cesare: President of Max Factor Japan

3. Durk Jager: P&G CEO

4. GLT: Global Leadership Team (made up of business GM’s of crucial MDO’s, people from R&D, consumer research, product supply, HR, and finance). Chaired by Lafley.

INTRO:

In this case study we are introduced to P&G as an organization and their changes in structure overtime. More specifically, after the acquisition of Max Factor Japan and success in its SK-II line, questions are raised about whether global expansion is feasible and profitable as a franchise. De Cesare ran this skin-care line in Japan, but he reported directly to Lafley. This is crucial because global expansion would require Lafley’s approval in budgeting and organizational support. P&G recently went through major organizational changes over a period of six years known as O2005. This created huge questions in the strategy that would be put together in the case of a global expansion for SK-II. Within the U.S. Procter & Gamble originally followed an organizational structure consisting of seven different divisions that were furthermore shattered into 26 distinct categories. Each category had its own R&D, supply management and marketing. In addition, the international organization was divided into four regions that were then broken down individually by country. The GM’s of each country and each of the four individual regions were uniquely held responsible for earnings. This would create conflict and resistance in unifying the company due to cultural issues affecting sales in certain countries.

Originally, P&G was a failure in Japan. They failed to understand and accommodate to local culture and its demands, as well as ignoring the fierce competition. Believing in...