Decesare Should Consider Both Internal and External Factors

Learning question 1: DeCesare should consider both internal and external factors.

Internal factors: In order to successfully make SK-II become a global brand, DeCesare should consider if P&G's structure and process were able to fulfill three conditions of making transnational innovation process feasible. First, P&G should be able to systematically differentiate tasks and responsibilities for each business, function and subsidiary (Bartlett & Beamish, 2010). Second, it should be able to manage interdependence among the different units of companies. Third, a differentiated coordination system should be ready (Bartlett & Beamish, 2010). In this system, three flows are the lifeblood. The flow of goods is the complex interconnection through which companies source their raw materials and other supplies (Bartlett & Beamish, 2010). DeCesare should also consider how to supply raw materials of SK-II from Japan to other countries. The flow of resource is the transferring of technology and movement of personnel throughout the system (Bartlett & Beamish, 2010). He should think about how to transfer technology and experienced personnel of SK-II from Japan to other countries. Then he needed to consider how to create an effective flow of valuable information and knowledge (Bartlett & Beamish, 2010), in which companies can diffuse information about SK-II throughout the worldwide network. Depending on the complexity of SK-II technological knowledge and the complexity of local market knowledge of other countries, moving people and/or moving/exchanging information was appropriate (Bartlett & Beamish, 2010).

External factors: Furthermore, there were other external factors that should be considered such as market behaviors, distribution, competition, demand, country risk, and operation cost. Customer behaviors might differ from countries to countries, and they may perceive SK-II differently. Moreover, selecting channels of distribution in new markets was also a challenge for P&G. High competition should be taken into account, such as in Europe and Japan. Demand would be dependent on average income of local consumers because SK-II had premium price strategy. In some countries like China, risk of governmental policy was a barrier. Finally operation cost relied on labor cost, marketing cost, ect.. in local markets.

SK-II had the potentiality to become a global brand. There was strong market driver for this brand to become global. Despite regional references, the unmet need from customers was to achieve soft, moisturized, and clean-feeling skin; this was also the evolution of customer need. This was an opportunity for SK-II as the brand was developed to meet the unmet demand from worldwide customer. Competitive diver was strong as other premium cosmetic brands were going globally. Economic driver was medium to strong as there was potentially lower cost of beauty consultants in