Swot Shiseido
Essay Preview: Swot Shiseido
Report this essay
SHISEIDO
Shiseido was founded in 1872 in Japan and started to export its products in 1929. Therefore the company has had the advantage of being one of the first movers. This is one of the reasons why Shiseidos products have reached a high degree of market penetration.
S: The main strength of Shiseido is that the company is focusing on offering high quality products. In order to do so they developed a unique strategy of combining Western technology with the regional needs of every country in which their products are sold. Their ability to adapt to the special requirements of the market and their endeavour to invest into research and the development of their products have contributed to the development of the companies reputation, especially the laboratories world-class research in dermatology. All these aspects are responsible for the brands international recognition being one of the key factors for high sales figures. In fact Shiseido focuses on corporate brands.
W:On one hand this makes it easier for Shiseido to sell its products, on the other hand limits the companys possibilities to be able to serve lower quality segments, especially in Europe and the USA where Shiseido remains confined to prestige brands. Therefore the company has problems competing in lower quality segments (i.e. as served by Maybelline and Revlon) moreover because they use sophisticated manufacturing techniques which implicate higher costs. Shiseido established subsidiaries which remained mostly autonomous (i.e. BPI) which face difficulties in the transfer of knowledge.
T:From the end of the 1980s Shiseido was faced with a constantly growing number of competitors on the market that contributed to Shiseidos declining domestic market share, (the result being a decrease of prices for cosmetic products in general). The rise of competition as well as the saturation of the Japanese market forced Shiseido to expand its business globally.
CINA:In fact the companys long term goal has developed to achieve more than 50 percent of overseas sales. Shiseido is currently focusing on the Chinese market which is offering a wide range of possibilities. First of all China has 1.28 billion inhabitants (ten times more than Japan). It is estimated that about 60 million people are well of and therefore form a large base requiring high quality products (i.e. Aupres).
It has to be mentioned that the success in China is not without challenges. The threat of products being counterfeit easily forces Shiseido to enter agreements with the Chinese government in order to protect the intellectual property embodied by their products. The agreements with the Chinese government are also essential in order to build a network of voluntary chain stores in the country. These stores will