Case | HBS Case Collection | September 1990 (Revised January 1992)

Procter & Gamble Japan (A)

by Michael Y. Yoshino

Abstract

Ten years after entering Japan, P&G had accumulated over $250 million in operating losses on declining annual sales of $120 million by 1983. The decision facing the president of P&G International: exit, retrench or rebuild the operation? Ironically, the initial entry was a success story with P&G Japan achieving an operating breakeven in their fifth year and market leadership in a number of categories. However, in the late 1970's market share and profit in all categories declined disastrously. Management changes failed to reverse the trends until an objective examination of the entry strategy, approach to the Japanese consumer, competition, technology and internal organization were made. By 1983, accelerating losses forced P&G to decide whether to exit or stay.

Keywords: Restructuring; Change Management; Profit; Market Entry and Exit; Market Participation; Sales; Competition; Technology; Beauty and Cosmetics Industry; Consumer Products Industry; Japan;

Citation:

Yoshino, Michael Y. "Procter & Gamble Japan (A)." Harvard Business School Case 391-003, September 1990. (Revised January 1992.)