Shiseido: Transcending Beauty Through Innovation Worldwide - Essay Sample

Introduction

Shiseido is a Japanese company offering cosmetic and beauty products within Japan and outside the country. The company has developed over time since the start-up with the aim of bringing Beauty Innovations for a Better World. The company transformed and become a global beauty company, and is now operating in approximately 120 nations worldwide. The company has had an immense impact on the beauty industry through its commitment to innovation. The aim of the company is to transcend beyond the Japanese border and venture into more markets worldwide into beauty innovations, beyond the beauty business. Delivery of new values, unique products, and ensuring the customers remain happy drives the organization's decisions and innovations.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

A Brief Overview of the Significant Opportunities for Shiseido in the Global Beauty and Personal Care Industry

Vast opportunities exist for Shiseido Company to explore and increase its market share within the beauty industry. The opportunities present the company with better avenues to increase its sales revenues and continuously offer better products in the market. The opening of the innovation hub for beauty products at the Shanghai WeWork space presented an opportunity for the company to reaffirm its commitment when it comes to working directly with the consumers (Gladenkova, 2020). The aim of the organization is to establish its market dominance in China and to sell its products directly to the consumers. With Beijing being the heart of China's innovation, setting up the hub, there meant the company would thrive with the application of technology in the area. The company has diversified its portfolio and differentiated its products overtime through innovation. Through the inclusion of perfumes in its line, such as the American style Deluxe, the company has gained acceptance and recognition outside Japan. The high quality perfumes that are well packed and resemble high innovation has been instrumental for the company to access the international markets (Taylor, Coates, Anyansi-Archibong & Tanaka, 2014). The perfumes produced are of high quality and are able to rival those from the existing big players in the market hence attracting more buyers and increasing their loyalty to the products offered by the organization.

The continuous advancement in technology has enabled Shiseido to adopt well and come up with better ways of producing quality products and incorporating the technology in its operations. Technology has enabled the company to drive its expansion strategy through the world and develop its portfolio over time. Through the transfer of technology, the company has been able to set up operations in numerous countries such as Germany, France, Australia, and Britain. The move has enabled the company to establish strong footholds in the countries by licensing its key fragrance brands such as the ‘Issey Miyaki brand.' Technology advances the innovation level of the organization that is mainly concerned with the production of highly innovative products (Doz, Santos & Williamson, 2004). Most beauty firms all the world does not deploy top-notch technology in coming up with their products. Shiseido, being technologically motivated, stands a better chance of thriving in the competitive market by coming up with high quality products.

There is an increase in the number of people worldwide who are concerned about the quality products no matter the price, and they aim at being associated with expensive and luxurious products. Shiseido, given its capacity and innovative nature, is able to meet such demands emanating from the European markets. The demands offer viable opportunities for the company to expand into the regions and offer the products. The company, through the differentiation of its products, can easily position itself well in the various markets. Many youths worldwide prefer appealing products that make them stand out among others. This offers the company the opportunity to come up with better products that are as a result of the able innovative power of the company. The trend is towards appealing to the masses, and the increasing number of youth worldwide offers the market for the introduction of better products in the cosmetic and beauty industry.

Options for Shiseido to Expand its International Business and Compete More Effectively Globally

Shiseido Company has various options that are key to ensure its market penetration and the establishment of the business in foreign countries. These approaches are crucial in the establishment of footprints in the global market. Increasing its customer base is key for the success of the organization, and this can be achieved through the entry strategies deployed in the foreign market.

Direct export to foreign countries offers an opportunity for the company to establish footprints and have its products traded in those markets. The company first ventured into exportation of its products by in 1931, when it exported its 'Rose' brands of cosmetics to Southeast Asia. The approach leads to the expansion of the business into other markets hence generating more revenue for the company. Exportation requires the company to have appointed and authorized distributors in the foreign countries who are interested in dealing with the products at a given margin (Usui, 2015). The distribution agreements allow the company to access foreign markets. However, exportation does not give the exporter the sole control of the foreign market and the operation of the distributors, hence limiting the decisions made by Shiseido.

The company also expands its business into the foreign market through technology transfer agreements with foreign companies that concentrate mainly on manufacturing. Through this, Shiseido transfers its technological expertise to such companies to utilize in manufacturing its products. The aim is to have the products sold I the foreign nations and to have the brand recognized. The company grants the license to the foreign manufacturers to produce the products and provide technical assistance to the companies to produce the product the way the parent company does with all the knowledge at their disposal (Umemura & Slater, 2017). Through this approach, Shiseido has been able to expand to Germany, Australia, Britain, and France. The company gains revenue from the licensing agreements while the manufacturer enjoys the right to produce and distribute the products.

The purchase of other popular brands in the cosmetic industry has enabled to company to establish its footprints internationally. Shiseido ventured into salon products and eventually purchased the American Helene Curtis brand that deals in the air care products both in Canada and the USA. These purchases enable the company to be known in the markets and for its products. This makes the company be in a prime position to sell its products through an already established market. The purchases allow the company to establish dominance in the hair salon and beauty products worldwide. Shiseido also purchased a high street cosmetic brand known as Bare Escentuals with the aim of increasing its dominance in America.

The company also acquired various cosmetic and perfume manufactures such as Davlyn Industries Inc. of the US, leading to the establishment of Shiseido Americas Inc. in 1990. The result of the acquisition is the promotion of Shiseido's brand. The acquisition has been among the indications of the company venturing successfully into the Latin American countries.

The company has also been able to penetrate the foreign markets through the establishment of its own manufacturing plants in foreign countries. The company opened its first factory in Gien, France, with its production focusing mainly on skincare and fragrances. The organization also opened its first distribution center in France in 2000, having the company's philosophy embedded in its operations. The distribution centers have duplicated the manner of the parent firm's operation and implemented its social and cultural sponsorship programs in France. The strategy to penetrate the market has granted Shiseido the absolute right to produce and use its resources to distribute the products in the foreign markets.

Recommendation on the Best Option That Shiseido Should Deploy When Expanding Its International Businesses

Among the expansionary options towards international business, gaining licenses and establishment of the manufacturing plants and its own distribution is the ideal strategy that the company should continue to deploy. Through this approach, the company will operate just like other domestic corporations by following all the standards and laws within the industry in their country of operation.

The establishment of foreign manufacturing and distribution channels calls for the need to replicate the operations of the main company. The option allows for the philosophy of the company to be implemented in full, replication of the structures necessary for the operation, having systems that are aligned to the ideals of the main company, qualified people in place, and retaining the culture of the company (Verbeke, 2013). The establishment of foreign plants brings more benefits to the company in numerous ways compared to other expansionary strategies. First, Shiseido gains full control of the market in terms of pricing and making decisions on key issues affecting the consumers. Through this, the consumer is able to benefit from the company directly through reduced prices and more personalized services from the company. Increased profit is registered as opposed to alternative expansion methods.

The approach allows the company to incorporate its culture and ensure success in foreign nations. The innovative nature and the high level of customer care are maintained, and these are essential in attracting and retaining more customers. The company is in a better position to monitor the recruitment process that leads to the selection of competent personal that view customers as the essential aspects that the company should always strive to satisfy through the innovations made (Ter & Gontarz, 2016). Through the approach, the structure of the organization is replicated and maintained, and this shows the levels of decision making within the organization. The successful structure is essential in ensuring operations are streamlined, and delays are not experienced in the manufacturing and distribution stages of the key products. Implementation of the option is made possible through the establishment of the necessary structural changes in the new country. The structure of the organization will be tailored to include the nationalities from the host nation as per the number required by the law. The executives should be trained and adequately qualified to steer the organization towards its goals and realization of its philosophy.

The approach allows for the implementation of a successful company's culture. Inheriting the cultural asset of the company enhance the continuity of the corporate philosophy of the organization, "inspiring a life of beauty and culture." Preservation of the cultural assets ensures that the company keeps on improving over time, and they form the basis of a better future (Fang, Gao, Liu, Tang, Wang, & Wu, 2008). The culture inspires the employees and the internal processes hence creating future value for the organization in the respective countries of operation.

Conclusion

In conclusion, Shiseido Company is presented with numerous opportunities in the developing world. The change in trend and technological developments offers numerous opportunities for the organization to tap into. The company continues to expand internationally and is aiming to utilize the best and effective expansionary strategy to gain more footprints in foreign mark...