Overview of Kao Company Case

The major issue in this case is P&G’s planned re-entry into the Japanese disposable diaper market. Kao considers P&G a major competitor, and must decide on an appropriate response.

First, we will look at the Company, Customer, and Competitors mentioned in the Kao case, and analyze each of these in turn.

Then, we will determine the relative threat level of each competitor based on its current capabilities.

Overview of Kao Company

Kao controls 32% of the 46 billion Japanese Yen (JPY) disposable diaper market as of 1984.

Kao is the leading marketer of detergents and personal care products in Japan as of 1985.

In 1985, total company sales were 369 billion JPY.

3% of total sales originated with exports.

Background

Kao’s predecessor was the Nagase Store, which was established in 1887.

Kao’s logo is a human face with a moon, which symbolizes beauty in Japan.

Mr. Maruta is the current president of the company, and he started as an applied chemistry graduate. He is described as being charismatic, popular, and a strong leader.

Kao’s current product line includes Laurier, a brand of sanitary napkins, Sofina, a brand of cosmetics, Biore U, a body cleanser which is formulated for sensitive skin, and Merries, which will be discussed in the following slides.

Goals

Mr. Maruta aims to make Kao, Proctor & Gamble’s top competitor worldwide. To achieve this goal, Kao has developed subsidiaries in the Phillipines, Spain, Mexico, and Indonesia. They also have joint ventures in Thailand, Taiwan, Hong Kong, Singapore, Malaysia, Indonesia,