Shiseido

8 Pages 2057 Words

Shift distribution away from its affiliated mom and pop store toward department stores and supermarkets.
3. Maintain its competency against global competition by expanding into global markets.

ESTABLISH A DOMINANT POSITION IN THE DOMESTIC MARKET
Even though, the case claims Shiseido is the leader in the cosmetic industry, they are not leading in any of the five categories (skin care, makeup, hair care, fragrances, and men’s cosmetics). One of their main problems is that of rising inventory at its outlets. Shiseido needs to introduce a demand-based production and distribution system designed to eliminate out-of-stocks, returns and incorrectly distributed inventories. They could also install online POS terminals at cosmetics chain-store retailers, connecting all sales staff via an in-house network. Building up the information network in these ways can enable them to achieve two-way communication between the headquarters, its branches and those on the front line of sales. This would position them to instantly provide the data necessary for consultation based sales and provide feedback on the sales counter to the head office.
Their second problem is that competition is very fierce. In the early 1980’s companies such as Max Factor, Revlon, and Clinique entered the Japanese market. With the entry of these inexpensive competitors supermarket chains were forced to lower their prices. From 1994 to 1995 the price of cosmetics fell by over 10 percent. In order to gain dominance in their domestic market Shiseido must distinguish themselves from the competition.
One option is to target the sluggish male market who only account for 15 percent of sales. With new trends in world such as the “metro-sexual” man there is a great opportunity for growth in this segment. A metro-sexual is a straight, urban male who is eager to embrace and even show off ...