Organizational Culture at Lincoln Electric - 686 Words

Introduction: Motley Fool (2013), a multimedia financial company named Lincoln Electric to be the eight best companies in America. It is a phenomenal achievement to maintain the company’s ranking for several years. This implies that the organizational structure and culture should play a tremendous role in the Company’s continuous success and progress. This essay assess the assess the culture and different trends followed at Lincoln Electric Organizational Culture: Business dictionary defines Organizational Culture as the ‘values and behaviors that contribute to the unique social and psychological environment of an organization’. It can also be seen as the values that show people what is appropriate and what is not (Becker, 2006). Lincoln Electric: Founded in 1865 by John C. Lincoln, the company is known in today’s world for its high worker productivity. The secret behind this extra ordinary success lies in the company’s founding philosophies and established policies over the year. The term ‘Organizational Culture’ was not even in practice when the company established its unique policies like reducing working hours, paid up life insurance, health benefits, social activities, paid vacations, and the pension plans. These measures not only motivated the employees but also helped build trust and partisanship. In Charles G. Herbruck’s words â€Å"... these were expressions of mutual respect for each person’s importance for the job to be done.† It can be assumed that Lincoln ElectricShow MoreRelatedOrganizational Culture Of The Lincoln Electric Company1439 Words   |  6 PagesIntroduction The Lincoln Electric Company is the world’s largest manufacturer of welding machines and electrons. Lincoln employs 2,400 workers in two U.S. factories near Cleveland, OH and approximately 600 in three factories located in other countries. (The Lincoln Electric Company p. 1.) The main focus of this paper is to analyze the organizational culture of this company, by doing so, I will point out the different features, the rules and norms, beliefs and philosophies and the systems implementedRead MoreOrganizational Culture Of The Lincoln Electric Company1107 Words   |  5 PagesThe Culture of a Company, or the Organizational Culture like it is mentioned in Principles of Management, has gotten a new dimension for me in terms of importance to assure the success of a company. This Organizational Culture is based on a series of values that are defined and established by the founder of a company for instance, which has a deep relation with his ethics and moral values. Therefore, the first factor to outline would be what the culture of a company shows, that can describe alreadyRead MoreAnalysis Of Lincoln Electric Organizational Culture1036 Words   |  5 PagesAnalysis of Lincoln Electric organizational culture Lincoln Electric was founded at the end of the 19-th century by John C. Lincoln. He was a talented engineer who invested 200 dollars in his product electrical motors. Soon he was replaced by his younger brother James F. Lincoln, and the founder of Lincoln Electric dedicated his time to engineering activities and inventions. James F. Lincoln was a different type of inventor. He was a good manager with the nice strategic point of view over manufacturingRead MoreThe Organizational Culture Of The Lincoln Electric Company1035 Words   |  5 Pagesthe story of Lincoln Electric Company I’ve come to the Conclusion that their organizational culture they practicing is People-oriented culture. Because the company values fairness, supportiveness and they respect individual rights. There is a greater emphasis on expectation of treating people with respect and dignity. All the founders of the company had a great deal of continues influence on the positioning of the company today, form John C. Lincoln to James F. Lincoln. John C. Lincoln started itRead MoreOrganizational Culture At Lincoln Electric Company Essay957 Words   |  4 PagesOrganizational Culture at Lincoln Electric The Lincoln Electric Company, a manufacturer of welding equipment and supplies, was founded in 1895 by John C. Lincoln as a manufacturer of electric motors. In the early years of the 20th century, James F. Lincoln joined his brother’s company and by 1914 replaced John as the company head, allowing the latter to concentrate his efforts on scientific investigations. In those early years, James F. Lincoln implemented a number of programs and initiatives withRead MoreThe Organizational Culture Of The Lincoln Electric Company1016 Words   |  5 PagesThe Organizational Culture of the Lincoln Electric Company The Lincoln Electric Company is one of the largest manufacturers of welding machines and electrodes in the world. With about 2,400 employees in the USA and near 600 workers in other countries. The Lincoln management plan is well known for accomplishing the highest worker productivity. His founder Mr. James F. Lincoln died in 1965, leaving a profitable and reliable company. As a president of the business, he invigorated a committee that wasRead MoreThe Impact Of Organizational Culture On The Lincoln Electric Company892 Words   |  4 PagesThrough my reading about LINCOLN ELECTRIC COMPANY I can see that organizational culture played an important important role in success of this company. All main elements that form Oranizational culture represented in THE LINCOLN ELECTRIC COMPANY, that what made this company prospered and thrived in its activity through the applying The P-O-L-C Framework effectively. I can discern the aspects of influence of oraganizational culture in manging this co mpany towards higher levels in output through theRead MoreOrganizational Culture And The Lincoln Electric Company1212 Words   |  5 PagesORGANISATIONAL CULTURE AND THE LINCOLN ELECTRIC COMPANY The success of a business is intimately tied to the success of its culture. To understand better how organisational culture is created and maintained we will examine one of America’s most successfully managed companies, the Lincoln Electric company. We will examine many aspects of the company that contribute to its culture, such as the influence of the company’s founders, the golden rule, the incentive management plan, the performance appraisalRead MoreOrganizational Culture And The Lincoln Electric Company1303 Words   |  6 PagesORGANISATIONAL CULTURE AND THE LINCOLN ELECTRIC COMPANY The success of a business is intimately tied to the success of its culture. To understand better how organisational culture is created and maintained we will examine one of America’s most successfully managed companies, the Lincoln Electric company. We will examine many aspects of the company that contribute to its culture, such as the influence of the company’s founders, the golden rule, the incentive management plan, the performance appraisalRead MoreAnalysis Of Lincoln Electric Company Of Cleveland Ohio Usa S Organizational Culture877 Words   |  4 PagesLincoln Electric Company of Cleveland Ohio USA`s organizational Culture is exceptional and has earned it the acolade of being the best managed manufacturing company in the whole world. I will explore and attempt to identify culture aspects of Lincoln Electric from several issues such as; the continuing influence of founders of the company, the golden rule, the incentive management plan,the performance appraisal system, how people communicate in the organization, the merit pay plan, the bonus plan

The Hunger Games And The Greek Myth Of Theseus - 1030 Words

Research Paper Final Draft: President V.S. Minotaur In both the Hunger Games and the Greek myth of Theseus and the Minotaur, children were used as sacrifices to make the Capitol and/or Minotaur seem unbeatable. Children were offered as sacrifices to make the Capitol/Minotaur seem unbeatable. In the Greek myth of Theseus and the Minotaur as punishment for displeasing Crete, seven youths and seven maidens were periodically sent into a labyrinth containing a Minotaur which was half man and half bull. This cycle doesn?t end until Theseus volunteers to go into the labyrinth and kill the Minotaur. Theseus is successful in killing the beast and becomes the epic hero of this story. In the Hunger Games, children were sent into an arena to kill each other as sacrifices this was a symbol of the capitol?s power. Once a child reached the age of twelve their name was entered into the mix for the Hunger Games, a fight to the death broadcasted on live TV. Katniss?s twelve-year old sister Prim gets picked and Katniss volunteers to take her place. She and the other district twelve tribute, Peeta are the last two survivors and defy the Capitol by trying to kill themselves at the same time. At the last second they are stopped and both come out of the arena victorious. Once in the labyrinth, there was no escaping, much like the Hunger Games, the only way out was to be the last living tribute. Katniss talking to Peeta says, ?Careful, there?s a force field up ahead? (Collins, CatchingShow MoreRelatedThe Hunger Games By Suzanne Collins1352 Words   |  6 Pagesbook the Hunger Games came out with a bang when it first hit theaters or the shelves of the bookstores. It was dubbed as one of the best films or books to read, interestingly enough it was a remake of the stories or myths most people heard when they were younger, but modernized and turned into a collage of all the best roman and Greek stories. Suzanne Collins brilliantly combined the Greek and Roman influences to make the movie/book unforgettable. By using stories from the romans and Greeks, to theRead MoreTheseus vs. Katniss: The Hunger Games versus Greek Mythology1599 Words   |  7 Pageschoose to borrow from the rich mythology of the ancient Greeks. Suzanne Collins has been asked on numer ous occasions where the idea for The Hunger Games originated. She readily admits that the characters and plot come from Greek mythology and more specifically, from Theseus and the Minotaur (Margolis 30). One familiar with both both stories can easily recognize the identical framework upon which each of these stories are built. Both Theseus and Katniss Everdeen, Collins’ heroine, volunteerRead MoreAn Comprehensive Tour Guide Experience962 Words   |  4 Pageswere standing in and through that and after that. It was a very comprehensive tour guide experience. So throughout our lives we basically heard about war. As a child Suzanne like to read about Greek and Roman mythology. Her favorite was Theseus and the Minotaur. Collins sums this up for us exposing what Theseus and the Minotaur is about. â€Å"As punishment for displeasing Crete, Athens periodically had to send seven youths and seven maidens to Crete, where they were thrown into the labyrinth and devouredRead MoreComparing the Dystopian Elements in Suzenne Collins The Hunger Games and George Orwells 19841377 Words   |  6 Pageselements in Suzanne Collins’ The Hunger Games echo those in George Orwell’s Nineteen Eighty-Four Dystopian literature adheres to certain conventions; the theme of a dystopian future typically encompasses a severely repressed society, with socio-political dysfunction and class stratification. Themes of surveillance, censorship and personal independence have been established by authors such as George Orwell, and are recurrent throughout 2008 novel â€Å"The Hunger Games† by Suzanne Collins, although OrwellianRead MoreHunger Games Hamlet1658 Words   |  7 PagesThe Hunger Games Hamlet There are 2 main themes within Hamlet the Hunger Games. These being the idea that they are both being watched and therefore having to be insecure about themselves and what they say. The other is the theme of fatherhood and loss. Shakespeare’s feelings are very much portrayed throughout the whole of Hamlet, he gives the impression he is slightly bi-polar as his mood contrast so much. His feelings reflect on Hamlets behaviour. This led to Hamlet being one of the greatestRead MoreGreek Mythology : The Little Mermaid, And Of Course, Hercules1879 Words   |  8 Pagesin my mind that incarnates Greek mythology are: The Little Mermaid, and, of course, Hercules. Heracles has so many films dedicated to him, but this film is a special case, because it is made for kids. To start off, I did enjoy The Little Mermaid, mainly because I love Disney, but seeing in the eyes of someone who has study Greek Mythology, it didn’t disappoint too much. That is mainly because The Little Mermaid is not a movie that is mainly based off of some myth, like Hercules, but it did incorporateRead MoreDetailed Summary on Greek Mythology by Edith Hamilton Essay7051 Words   |  29 PagesENTRY I Part I Ââ€" Section I I-THE GODS The Greeks believed that the Earth was here before the gods; the gods did not create the universe, instead the universe made the gods. So the heaven and earth were the first parents, after them came the titans, and following them came the gods and goddesses. The titans were known to be big and of great strength. The one titan who over-ruled the rest was Cornus, also known as Saturn. He reigned until Zeus- his son dethroned him. Zeus was amongst the twelve

Single-sex education free essay sample

Single-sex education has been growing in popularity since 2002; (Novotney 2011) however, considering gender differences and the development for students, there is no space for single-sex education to continuously grow compared with coeducation; here are three main reasons in consideration of mode of teaching, psychology and physiology: Proponents of single-sex education make mode of teaching arguments, arguing for coeducation provide various curriculum that is not suitable for the other gender. They believe curriculum design should be set aiming at one gender in single-sex schools. According to single-sex. org, the single-sex education creates many unprecedented opportunities that do not exist in the coed classroom: teachers can employ one strategy in the all-girls or all-boys classroom, which do not work well in the coed classroom. (singlesexschool. org 2013) Robert Kennedy states the faculty at single sex schools understand how their students learn. (Kennedy 2013) They adapt their teaching styles to either gender’s specific needs. There are other advantages as well, for instance, a single sex school is homogeneous, so this can simplify planning events and activities as the school only have to consider boys or girls as the case may be. The problem comes straight after. Coeducation proponents firmly insist on that this one-gender-aimed thought is not fully convincing enough, and much evidence can be taken to prove it cannot hold water. First, the single-sex education supporters exaggerate the distinction between the two genders. The American Council on Education states that there is less academic disparity between male and female students overall, (Stanberry 2013) so there is no necessity to build single-sex schools at all. Second, there are not enough teachers receive training. Kristin Stanberry states the reality is that few educators are formally trained to use gender-specific teaching techniques. (Stanberry 2013) This situation suggests the one-gender-orientation strategy is impractical. The benefit for being taught in coeducation is that students can gradually form a set of balanced moral values, especially about love affairs. Guardian indicates that teachers and parents of co-ed students can fully take advantage of the presence of both boys and girls in the same class to explain the differences between male and female, and help them to understand the correct moral messages. (Guardian. org 2009) For example, information like premarital sex is morally unacceptable, and how it can be avoided. It is easier for students to see how these phenomena are close to them, regardless of their sex. What’s more, in this way students can hear what the opposite sex say, and acquire an understanding of different opinions. This difference inspires them to discuss more and think more deeply of these matters. Moreover, dating and marriage involve both sexes. Only the opposite sex in the discussion of these matters can it provide a more variable and more in-depth insight for students to think over. In the course of these discussions, students can gain a set of moral values that is both correct and acknowledged by themselves, and they will be willing to follow them. Single-sex education advocates a bunch of benefits for students in psychological aspects in different aspects. From heterosexual attraction and distraction, Seamus put forth his theory in his book The role of single-sex and coeducational instruction on boys attitudes and self-perceptions of competence in French language communicative activities, he represents people who state that girls or boys are easily a distraction to each other, and at the same time, students do not act more age-appropriate in coeducation school, especially boys, so single-sex education is their best choice. According to the National Association for Single Sex Public Education, boys do not need to show off their macho side to impress any girl ever since no girl existed in boy-exclusive classroom, and that does not indicate that the boys lack lessons in masculinity; (Morgan 2009) on the contrary, this experience is likely to aid them in understanding their masculinity, and there are a larger number of male models to come into effect in this process. From social activities and participating situation, Vaughn Thompson, who resigned from the Young Scholars Academy in the Bronx indicates that kids in single-sex schools are more likely to participate activities because they are surrounded by classmates who are their brothers or sisters. (Martin 2012) In this sense, these factors can let students have a comparatively free atmosphere and be themselves. From gender stereotypes, single-sex education supporters meditate to place their hope on eliminating gender stereotype. Robert Kennedy, former About. Com guide, states that the conventional thinking is coeducation can break down gender stereotypes, but that did not always happen. (Kennedy 2013) He states the proponents of single sex education argue that boys in coeducational system are less likely to take courses in the arts or advanced academic subjects, because they do not feel like being as a nerd. Similarly, girls avoid the sciences and technology subjects, because they do not want to appear to be tomboys; however, single-sex education eliminate this worry, for instance, greatschool. Org states girls do not have to under the pressure to compete with boys in male-dominated subjects such as math and science. (Stanberry 2013) Boys, on the other hand, can more easily pursue traditionally feminine interests such as music and poetry. These factors are blandished by single-sex education supporters to announce their triumph. Nevertheless, those psychology appearances simplify the problem, and it is shortsighted for they only care about students’ current psychological feelings, but ignore the consideration of short-term and long-term development and social human communication, especially in the aspect of opposite gender: As for short term, coeducation inspires students to have a healthier and comprehensive gender atmosphere. According to Association for Supervision and Curriculum Development, it states that boys and girls all benefit much from coeducation. (blogger 2013) Students perform happier in coeducation schools, compared to single-sex schools. Recent research has found that classrooms with a more egalitarian social structure and more cross-gender friendships experience reduce levels of aggression and bullying, which is suitable for coeducation school. According to Mr. Squires, a freelance from eudblogs. org, indicates that boys and girls have different strengths and different interests in various subjects. (Squires 2012) If boys and girls are studying together, they will have the best opportunity to introduce their different experiences and views to each other, and eventually reach a win-win situation, for example, if a girl knows a lot about women rights and a boy knows many things about male sports, they can communicate with each other and learn from each other in a natural environment day by day. This Action helps both boys and girls to understand and enjoy each other’s interest, which is useful for them to understand the opposite feelings and thoughts, resulting in a considerate character. As for long term, it is a preparation for students’ future. Wong Wing Yin Jennifer states that coed schools provide the suitable environment for students to develop the interpersonal skills before they join in the labour force in future. (Jennifer 2010) People always say that school is a miniature of society, and there are males and females in society, which likes the situation in coed schools. Males and females are crucial members in every society. There is no way to avoid contact with the opposite gender, and it is essential for people to learn the proper way to interact with others so that people can develop healthy relationships with people around, and increase efficiency. A single-sex school cannot provide such environment for students to communicate to opposite gender. This may lead to the development of negative response to the approach of the opposite gender. For example, a boy who studies in a boys’ school may be too shy to communicate with a girl because he does not know how. He states it is the accumulated experience from interacting with the opposite gender and observing others interact with the opposite sex that enables people to adapt to and be able to communicate with others, whether male or female. This is a vital advantage of studying in a co-ed school. Except psychological aspects, there is another thing single-sex education supporters argue. In coeducation schools, boys do well in Math and Physics, while girls Arts and Literature. Single-sex education supporters believe that contributes to physiological factor, or more exactly, brains’ differences between two genders. The American Psychological Association states that according to a 2007 pediatric neuroimaging studies published on NeuroImage led by a team of neuroscientists from the National Institute of Mental Health, different brain regions develop in a different sequence in the brains of girls and boys. (Amercian Psychological Association 2011) Using 829 brain scans gathered over two years from 387 subjects from 3 to 27 years old, researchers found several remarkable differences. (Bandettini 2013) The occipital lobe shows rapid development in 6 to 10-year-old girls, while boys show the largest growth in this region after 14 years old. Another study published on Developmental Neuropsychology has shown disaccord in language processing between the sexes as well, concluding that the language areas of the brain in many 5-year-old boys look similar to that of many 3-year-old girls. (Glozman 2013) Amy Novotney, a researcher belonging to American Psychological Association, states single-sex education advocates use brain differences as evidence for the benefits of separating boys and girls in the classroom, holding the idea that there are distinct physiological and developmental differences between boys and girls, which leads the two genders to take various studying styles. (Novotney 2011) People employ the evidence related to brain differences to demonstrate that boys and girls do not synchronously develop, and thus coeducation is not suitable for this two genders together. Coeducation advocates strongly against the above theory, announcing although there are indeed many studies suggesting small physiological differences in male and female brains, there is a lack of specific evidence that how these differences matter to learning level and how close is this factor related to at the individual level, for example, according to Psychological Bulletin, a meta-analysis of 242 studies conducted between 1990 and 2007 examines gender differences in math performance, and it finds that girls perform as well in the subject as boys. This study, which is convincing for it includes so many test samples and covers such long time, indicates that brains’ differences cannot lead to apparent result differences in learning level. (OShea 2010) From the arguments above, people can clearly see the furious discussion between the two sides, and coeducation schools are better schools for three reasons. Coeducation schools win because it carefully considers many factors, including short-term and long-term benefits, students’ future development and among other things. All these factors can well help students to adapt to and cope with society’s demand, which beyond what single-sex can do.

P Global Expansion free essay sample

Introduction of the case: De Cesare, president of Max Factor Japan and GLT member on the Beauty Care GBU, is to present an analysis of SK-II’s potential to become a truly global brand. There are 3 alternatives for SK-II’s global strategy: To build on the brand’s success in Japan, tap into China, or expand SK-II into Western Europe. If PG chooses to focus on Japan, it is possible that they might achieve national brand recognition. However, to become a truly global brand, it is necessary that SK-II enters new markets. assignment satisfaction key help desk Yet, we must bear in mind that there are significant risks in PG’s first-ever proposal to expand a Japanese brand into foreign markets. These risks are magnified by the vast differences in consumers, distribution channels, competitors, and the political, social and economical systems across borders. Furthermore, PG’s global organization was currently undergoing a major restructuring program, O2005, which might deter SK-II’s plans. We will write a custom essay sample on P Global Expansion or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This paper seeks to discuss the merits of Japan as a lucrative market for SK-II and weigh the benefits of entry vis-a-vis the risks and related costs. In light of obstacles and limited growth, this paper will also examine the prospect of SK-II to develop into a major global brand by tapping into foreign markets. We will discuss the China and Western Europe market separately, and evaluate our plans accordingly. Lastly, we will conclude by showing how our plans would be implemented and integrated in PG’s newly reorganized global operations. Background of PG Japan PG‘s entry and expansion into Japan started off rough. Up to the mid-1980s, PG Japan had been a minor contributor to PG’s international growth. In 1984, twelve years after entering the Japanese market, PG’s board reviewed the accumulated losses of $200 million, the ongoing negative operating margins of 75%, and the eroding sales base-decreasing from ? 44 billion in 1979 to ? 26 billion in 1984. With this negative outlook, PG considered exiting Japan. Durk Jagerr, the country’s new GM, analyzed the causes of PG failure in Japan. He then made radical changes in market research, advertising, and distribution. This resulted in a 270% increase in sales. Just as it was starting to have a positive outlook, the Japan’s â€Å"Bubble Economy† burst in 1991. PG’s entry into the new category of beauty care worsened rather than improved the situation. In 1994, the Japanese beauty business lost $50 million of sales. Organization 2005 (O2005) When Durk Jager became CEO in January 1999, he implemented the Organization 2005the proposal for global growth. This was the most dramatic change to PG’s structure, processes, and culture in the company’s history. Implementing O2005 would promise to bring 13% to 15% annual earnings growth and would result in $900 million in annual savings starting in 2004. Item| 1995| 1996| 1997| 1998| 1999| Gross Profit| -| 5. 41| 6. 4| 4. 44| 10. 3| Table 1: Growth rate of Gross Profit As seen from Table 1, gross profit did grow quite significantly by 10. 3% in 1999, only 6 months after implementing O2005. PG’s income statement therefore supports Jager’s optimistic forecast of future 13-15% annual growth earnings. Figure 1: Trend Analysis for Current Assets and Long-Term Assets As se en in Figure 2, PG’s plant, property and equipment have been rising over the past 5 years, with a significant increase in year 1997. On the other hand, current assets (i. e. cash) have been declining, with a considerable decrease in year 1997 as well. It is highly possible this is due to cash used (decrease) to invest in capital (increase). In 1998, current assets finally increased for the first time in 4 years. This could explain how an increase in investments (on fixed assets) to produce new products, especially with O2005, eventually reaped positive returns with a more than proportionate increase in sales (cash and accounts receivables). Figure 2: PG’s Timeline Most importantly, with O2005, the organization would become more alert and responsive to issues. It would be possible to anticipate or predict trends in various markets by having a global view. For instance, if Japanese consumers decrease their demand for one of PG’s products, it can anticipate that other countries with similar culture may follow this trend. This would also allow PG to launch new products quickly without the hindrance of autonomous national subsidiaries. Moreover, global business unit would be able to maintain product margins across country boundaries. Having a strong global control of its products, PG would be able to use similar marketing campaigns in countries within a geographic region thus reducing marketing costs. Financial Ratios for PG| Column1| Current ratio| 1. 7| Net working Capital| 597,000,000| Total Debt Ratio| 0. 63| Cash Coverage Rate| 13. 67| Total Assets Turnover| 1. 19| Profit Margin| 0. 099| Return on Assets| 0. 117| Return on Equity| 0. 312| Table 2: Financial Ratios of PG in Year 1999 As seen in Table 2, PG is doing very well overall. It is relatively able to meet short term debt obligations. It has quite a substantial amount of net working capital which allows development (in Japan) and expansion (into China and/or Europe) of its business. It is also unlikely that the company will face problems with debt load as its financial leverage is not high. With its cash coverage ratio being very high, it is fairly safe if PG chooses to increase its financial leverage to help sustain growth and expand its business. Its moderate ability to generate sales from each dollar of asset is also reflected it its low profit margin, which highlights PG as a company that base its sales on volume rather than on profit. As for PG’s profitability relative to its assets, it is difficult to comment as it depends largely on the industry’s average, which is not given in the case. ROE too, should be compared to other firms in the industry. As PG’s ROE seems considerably sound, earnings must be reinvested to increase stockholders’ wealth and thus, SK-II presents PG the opportunity to do so. SWOT Analysis for SK-II Strengths The greatest strength of SK-II is Pitera, the unique ingredient found only in SK-II products. It was apparently developed by a Japanese monk who noticed how the hands of workers in sake breweries were kept young looking. The fact that SK-II has gained exclusive access to this â€Å"miraculous† ingredient allows them to charge premium prices and still generate demand for their products. To further justify their premium pricing strategy, they value-add their product by emphasizing on its packaging. For example, the SK-II Foaming Massage Cloth was packaged â€Å"in a much more elegant dispensing box† than Olay. Also, SK-II’s technological expertise in developing its product and showcasing detailed scientific product performance data was able to effectively convince Japanese women, who â€Å"took a much more scientific approach to their product reviews†. Weaknesses However, this scientific approach could go against them when dealing with Western Europe. They may not believe the collated results, but prefer hearing of more personal testimonials of the wonders of SK-II. Their premium pricing strategy could also be seen as a weakness as many would not be able to afford it. Also, its tedious multi-step skincare regime might deter lazy consumers from trying its product line. Lastly, with the need of beauty counsellors’ analysis and advice, and the full skin care regimen, it would be ineffective for SK-II to advertise through giving out samples to persuade stubborn consumers. Opportunities This creates opportunities for SK-II to advertise through their very comprehensive and prestigious beauty-counsellor segment which breaks down into training counsellors, as well as counter design and equipment installation. To support these investments, they used TV advertising to show the effectiveness of SK-II which boosted its product awareness and sales tremendously. With Japanese women being the highest users of beauty care products in the world, the opportunities for SK-II to continue expansion in Japan are huge. In addition, research showed that there is â€Å"a worldwide opportunity in facial cleansing†. With SK-II’s success in Taiwan and Hong Kong, SK-II has a ready opening to tap into nearby China. On top of that, there is a possibility of bringing this brand into a large Western market. This presents SK-II three main global opportunities to make its brand an international one. Threats Nonetheless, SK-II must be fully aware of strong brand competitors in the industry like Shiseido in Japan, and Estee Lauder, Clinique, Lancome, Chanel and Dior in Europe. Possible lost of exclusive access to the ingredient Pitera could also result in SK-II’s downfall. Japanese Market Build on SK-II brand success in Japan With its phenomenal achievement, SK-II should continue to build on its brand success in Japan. There are numerous benefits to be gained in the Japanese market. According to Exhibit 10, the retail sales of the skin care product in Japan are 6,869 million, which is more than anywhere else in the world. Also, being a premium, high-margin brand, potential growth in sales could bring more profits than any other of PG’s regular products, such as toothpaste and shampoo. In fact, it is estimated that one loyal SK-II customer in Japan will spend about $1000 a year on the brand. Most importantly, there is substantial room for growth, as Max Factor Japan only claims less than a 3% share of a $10 billion beauty market. Apart from economical benefits, the Japanese customers are the world’s leading consumers of beauty products and Japanese women had by far the highest use of beauty care product in the world. Since they already have the skin care practices of a four- to six-step regimen, which SK-II relies on, there is no need to invest in the educating the Japanese consumers. In addition, following the success of the foaming massage cloth, it offers a great opportunity to tap into PG’s extensive technological resources, leveraging on the existing brand name and image to extend SK-II’s product line and expand into new product offerings, whilst targeting new market segments. For example, new product lines such as anti-aging and skin-whitening products can be added to the SK-II range. Furthermore, Japan’s demanding consumers and tough competitors will create an important environment that is conducive for leading-edge and innovative ideas. Thus, this will lead to PG having greater initiatives and discoveries in the cosmetic and skin care industry. Another substantial benefit of the Japanese alternative would be the low investment. In comparison to a new market entry, there would not be a need for large funding in new infrastructure and distribution channels, or in the training of beauty counselors and other personnel. Moreover, the emergence of operational synergies through the cooperation of SK-II’s technology and marketing teams, who developed an innovative beauty imaging system (BIS), also supports the prospect of developing the home market which fits with de Cesar’s vision of the brand. By installing modified BIS at SK-II counters and having beauty consultants to give an accurate and credible analysis of skin diagnosis and counselling process, customers’ loyalty will be built. Hence, there is tremendous potential for growth for SK-II in its home market and thus it is strongly advisable to further expand SK-II in Japan. Why should SK-II enter foreign market? Despite SK-II ability to generate significant operating profits, this high-end product had little visibility outside Japan, even within PG itself. With its success in Japan, SK-II has the potential to enter foreign market as SK-II is able to meet the global desire to achieve soft, moisturized, clean-feeling skin. Apart from that, according to Exhibit 9, there is a $10 billion worldwide prestige skin care market which SK-II can tap in. Thus, there is a huge global market opportunity for SK-II. Another factor is that although the Japanese alternative involves lower risks compared to entering foreign markets, there are still a number of issues that have to be considered. First, as a well-established brand for beauty products, SK-II is also characterized by intense rivalry with strong competitors such as Shiseido. Furthermore, with the very demanding consumers and highly innovative competitors, any slowdown in RD or major setbacks in launching products could lead to a significant disadvantage for the company. Considering the other premium brands that had already entered the market, delaying the release would mean having to face greater competition in the future and having to forfeit the first mover advantage. Hence, it is favourable that SK-II to enter the foreign markets. Which foreign markets to enter? The China Market Entering the Chinese market is one option. The Chinese market is widely predicted to become the second largest market in the world. The prestige beauty segment is growing at 30 to 40% a year and virtually every major competitor in that space is already there. However, this does not mean that entering the Chinese market would guarantee profits. The right segment should be targeted in the Chinese market first. Basically, there are three Chinas-rural China, low income urban China, and sophisticated, wealthy China concentrated in Shanghai, Beijing, and Guangzhou. This market size is as big a target consumer group as in many developed markets. Especially in China where people are more attracted and loyal to products that are introduced first, it is important to enter the Chinese market now so as to reduce the loss of the first mover’s advantage. If the movement into the Chinese market is delayed, the battle for those elite will be lost to the global beauty-care powerhouses that have been there for three years or more. Another advantage of entering the Chinese market now is that the expected sales by having a few counters in Shanghai (sophisticated, wealthy China) would amount to $10 to $15 million in sales over the first three years, by which time they expected the brand to achieve breakeven. However, because of the large income gap among the Chinese in China, it is difficult to target the rural China and low income urban China with the SK-II products. Many argued that 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. After all, the four step regimen of SK-II-a-three month supply-could cost more than one months salary for the average woman working in a major Chinese city. Furthermore, Chinese consumers may not be ready for SK-II. Olay had succeeded only by educating its customers to move from a one-step skin-care process-washing with bar soap and water-to a three-step cleansing and moisturizing process. SK-II further relied on having women develop a four- to six-step regimen, something which the people may not adapt to. Finally, the Chinese market presented numerous other risks from the widespread existence of counterfeit prestige products to the bureaucracy attached to a one-year import registration process. SK-II would probably incur high cost too because of the import duties of 35 to 40%. This meant that even if P;G squeezed its margin in China, SK-II would have to be priced significantly above the retail level in other markets. Despite the possible disadvantages and risks that may be incurred when entering the Chinese market, it is still very advisable to enter the Chinese market mainly because it is a huge market. This entry into the Chinese market would be more successful after SK-II’s further expansion into the Japanese market as it would have developed a more reputable brand name. The consumers in China would thus be gain confidence in the product. Most importantly, the China team calculated that because of the lower cost of beauty consultants, selling SK-II in China could still be profitable. See Exhibit 12 for cost estimates. ) The European Market Besides the Chinese market, it is also possible for SK-II to expand into the European market. Unlike China, Europe had a relatively large and sophisticated group of beauty-conscious consumers who already practiced a multi-step regimen using various specialized skin-care products. This makes it easier to bring SK-II into the European market as people a re more incline to accept the product. Whats more, the fine fragrances business was beginning to do quite well. In the United Kingdom, for example, its own 25-person salesforce was on track in 1999 to book $1 million in after-tax profit on sales of $12 million. Even though selling brands like Hugo Boss, Giorgio, and Beverly Hills’ sales approach and trade relationship was different from the SK-II model in Japan, it was a major asset that could be leveraged. Furthermore, it is likely that SK-II provided the fine fragrance business a way to extend its line in the few department stores that dominated U. K. distribution in the prestige business. There is also a hope to achieve sales of $10 million by the fourth year in the U. K. market. However, given the intense competition, a loss of $1 million to $2 million may need to be absorbed annually over the period as the startup investment. Besides a potential loss during the startup investment period, a bigger challenge would be introducing a totally new brand into an already crowded field of high-profile, well respected competitors including Estee Lauder, Clinique, Lancome, Chanel and Dior. While TV advertising had proven highly effective in raising SK-IIs awareness and sales in Japan, Taiwan, and Hong Kong, the cost of television-or even print-made such a method too expensive in Europe. And without any real brand awareness or heritage, SK-IIs mystique may not be transferred to a Western market. There is also a possibility that a significant group may not be willing to adopt the disciplined six- to eight step ritual that the devoted Japanese SK-II users followed. Also, countries like France and Germany, where prestige products were sold through thousands of perfumeries, makes it impossible to justify the SK-II consultants who would be vital to the sales model. Therefore, there is a higher risk of bringing SK-II into the European market before the Chinese market as SK-II is an Asian brand. The brand has been proven successful in countries such as Taiwan, Hong Kong and Singapore. Therefore, it is reasonable to say that consumers in China will be more receptive to its product as compared to consumers in the western market. As seen from Figure 3 and 4 below, although China has the least retail sales so far, its market is growing at a rapid pace. Thus, there is a lot of potential in China and SK-II must act fast as mentioned earlier to gain a portion of the growing pie. Although Western Europe has the largest retail sales in the industry, it must be noted that it has a whole region consisting of many countries, thus including a much larger number of people who contribute to their high sales as compared to a single country like Japan. Therefore, building on its success in a homogeneous culture like Japan would be an easier and probably more effective initial step to creating SK-II as a global brand. Furthermore, as seen in Figure 5 below, Japan is the most ready market for SK-II as it has a high percentage that already frequently use facial lotion, which is SK-II’s key selling product. On the other hand, China has a long way to go in changing their skin care habits and practices and SK-II will need to put in a lot more effort in trying to get the Chinese to do so. Figure 5: Skin Care and Cosmetics Habits and Practices Table 3: Evaluating Criteria Customer Criteria| Japan| China| Europe| Usage and Habit| * High| * Low| * Moderate| Maturity| * High| * Low| * Moderate| Market Criteria| Japan| China| Europe| Market Size| * 5 * Largest| * 3 * Smallest| * 4 * Large| Potential size and growth| * 3 * Smallest| * 5 * Largest| * 3 * Unsure| Experience| * 5 * Already familiar with SK-II in Japan| * 3 * Some experience with Olay| * 3 * Some experience with Lipfinity| Pricing| * 5 * Recognized as a prestige brand * Loyal customer base| * 3 * High import duties VS low labour costs * Relatively low income| * 5 * Already exposed to expensive beauty products| Competition| * 5 * Shiseido| * 3 * Prestige product line target niche market | * 5 * Many existing well-known brands| Distribution| * 5 * Specialised stores with consultants| * 4 * Similar selling experience with Olay * Adapt knowledge| * 3 * Mass distribution * Consultant approach may not be feasible| Financial Criteria| Japan| China| Europe| Initial Investment Expected Losses| * Small * Most in RD| * Quite high * Focus on training| * High * Cost of advertisement| Sales| * Very good * $150m| * Good * $15m| * Fair * $9m| Implementation of the expansion in Japan To expand SK-II product line, they would need to tailor products to meet the consumers’ demands so as to provide customization. SK-II would have to increase their budget for research and development to understand the innovative needs of their consumers such as the SK-II foaming massage cloth. To create this competitive edge among competitors, SK-II would have to create major improvements in their product line. SK-II should also be marketed through channels of the department stores as the provisions of counter counsellors create a form of personalization for SK-II products. In addition, it gives consumers a personal touch and greater understanding to the products. Thus this also enables them to understand the needs of consumers and hence promote brand switching. With additional personnel, the next step would be for the global business unit to ensure that company strategies are aligned amongst all levels of hierarchy to continue to utilize the building blocks of competitive advantage: superior innovation, quality, customer responsiveness, and efficiency. Implementation of the expansion in China Since SK-II products are considered as a high-end product due to its price premium, the target segment for this market would be the sophisticated, wealthy China concentrated in Shanghai, Beijing, and Guangzhou. In addition, the prestige beauty segment is growing at 30 to 40% a year, thus this gives SK-II an opportunity to expand their products in the area. SK-II should price their products higher yet maintain both quality and standard for their products thus adding value for their products so that consumers will not feel that they are over paying for the products. The customer services and personnel create an additional value in which it is not easily replicated by competitors and thus can also keep SK-II competitive in the industry. To add, they should also implement the counters and train beauty consultants to market their products as it can also increase customization and personalization. Since SK-II will be targeting the high end consumers, creating a personal touch for these consumers would be important so as to add brand loyalty and decrease brand switching of these consumers. It is highly recommended that SK-II experiment with a few counters in Shanghai, and if successful, to expand to more counters in other major cities. This is mainly because SK-II still faces some resistances from entering the market. Thus it would be good, if other affluent brands go into the market to reduce resistance before SK-II enters the market full on. Implementation of expansion in Europe Europe had a relatively large and sophisticated group of beauty-conscious consumers who already practiced a multi-step regimen using various specialized skin-care products. Therefore, this gives SK-II an opportunity to expand their range of products as SK-II at current is having woman rely on a four to six step regime on their moisturizing process. In Europe, beauty products were sold primarily to mass distribution outlets, brands like Hugo Boss, Giorgio, and Beverly Hills to department stores and Boots, the major pharmacy chain, its sales approach and trade relationship was different from the SK-II model in Japan. However, this can serve as an asset that could leverage SK-II’s products as distributing their products in department stores can be in line with the small scale entry of SK-II. To add, SK-II can also implement trained beauty consultants at the department store counters to market their products as it can also increase customization and personalization. This can give consumers a personal touch and build favourable consumer first impression. Another advantage of having trained personnel would be the increased level of interaction with the customers and thus can also increase brand loyalty and promote consumers to switch from other brands to SK-II. SK-II Japan’s activity of product in China and Europe Culture As mentioned earlier, Jager toured PGs sites worldwide and he concluded that P;Gs sluggish 2% annual volume growth and its loss of global market share was due to a culture he saw as slow, conformist, and risk-averse. Thus, it is necessary to prevent such culture dilution in China. Also, Jager revolutionized the organization to take greater risk and speed and gave a green light to the Leadership Innovation Team to implement a global rollout of two radically new products. Therefore, to reduce employee inefficiency, SK-II China should adopt a similar culture of SK-II Japan to innovative teams who can create radical new products. Advertising SK-II Japan experimented with TV advertising featuring a well respected Japanese actress in her late 30s. In three years SK-II’s awareness ratings rose from around 20% to over 70%, while sales in the same period more than doubled. Building on this success, management adapted the ad campaign for Hong Kong and Taiwan, where SK-II had quietly built a loyal following among the many women who took their fashion cues from Tokyo. In both markets, sales rocketed, and by 1996/97, export sales of $68 million represented about 30% of the brands total sales. Similarly in SK-II China and Europe, we recommend that they make use of this advertising strategy to generate sales for their products. This is mainly because celebrities are role models in which consumers can easily relate to and thus by using celebrities as their endorsers, they can create a favourable brand image and also slowly build brand loyalty among the consumers. Moreover, fans of the celebrities will also promote brand switching as they feel affiliated to the brand Conclusion | Feasibility| Sustainability| Japan| | | China| | | Europe| | | Japan is the most feasible market because of current success. It is also the most sustainable in the long run because of the ready segment for SK-II’s skincare products as well as the already well-established structure. Entering China is slightly less feasible because of the consumers’ lifestyle. China also poses various barriers of entry that might affect SK-II’s profit margin and ability to sustain in the future. However, China’s skincare market is growing at the fastest rate, thus have the greatest market potential for SK-II to grow. Europe is the least feasible of the three mainly because of the strong competition in the skincare industry. However, Europe is a sustainable market if SK-II is able to create a favourable brand image to the Europeans as they already have a thorough skincare regime and large market segment. It was mentioned earlier that De Cesare was to present an analysis of SK-II’s potential to become a truly global brand. Our group, having analysed the case, decided that further expansion into the Japanese market should be the primary step taken. While doing this, P;G could settle China’s import registration process, train beauty conselors and educate the public. Some beauty technology developed in Japan could be transferred when entering the Chinese market. SK-II should penetrate Europe last of all as significant risks involved in entering foreign markets simultaneously, especially given that P;G’s global organization was in the midst of the bold but disruptive O2005 restructuring program. Since the brand will then be operating in various countries, it is crucial that a overall brand manager is assigned. This would improve communication across the various countries. A contingency plan must be drafted to fall back on in case the global expansion fails. This is why priority should be given to the Japanese market lest SK-II is unsuccessful in becoming an international brand. 2010: Diversify into cosmetics market that contain Pitera to gain larger market share 2000: Continue to build on Japan’s success Figure 6: Forecasted Timeline for SK-II During 2000: Invest in R;D; Expand SK-II product line; Settle China’s procedures and train counselors 2006: Withdraw product if banned substances used in production of SK-II in China; Re-enter only when problem is rectified 2005: Enter Europe 2001: Enter China