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TEHCNOLOGY ENTREPRENEURSHIP(ENT600)CASE STUDYPREPARED BYDAYANG NOR SHAFIQAH BINTI AWANG SHUKERAN(2020994777)BACHELOR OF SCIENCE (HONS.) BIOLOGY (AS2012B1)FACULTY OF APPLIED SCIENCESSHISEIDOSUPERVISED BY:MADAM NUR SYAHIRA BT ABD LATIFACKNOWLEDGEMENTFirst of all, I would' like‘ to’ express‘ my ‘deepes...

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TEHCNOLOGY ENTREPRENEURSHIP (ENT600) CASE STUDY

PREPARED BY DAYANG NOR SHAFIQAH BINTI AWANG SHUKERAN (2020994777) BACHELOR OF SCIENCE (HONS.) BIOLOGY (AS2012B1) FACULTY OF APPLIED SCIENCES

SHISEIDO

SUPERVISED BY: MADAM NUR SYAHIRA BT ABD LATIF

ACKNOWLEDGEMENT

First of all, I would' like‘ to’ express‘ my ‘deepest ‘appreciation’ to’ all’ those’ who’ provided me’ the’ possibility’ to ’complete ’this ’report. A’ special’ gratitude’ I’ give’ to’ my’ lecturer, Madam Nur Syahira binti Abd Latif, whose’ contribution’ in’ stimulating’ suggestions’ and encouragement, ’helped ’me ’to ’coordinate ’my ’case ’study ’especially ’in ’writing ’this report.

In addition, a thank you to my parents for giving moral support and some ideas to write this case study. Thank you for being an understanding parents and provide me the basic necessity such as a WiFi for me to complete my task. Many ’people, ’especially ’my classmates’ have’ made’ valuable’ comment’ suggestions’ on’ my’ paper’ which’ gave me the inspiration’ to’ improve’ the’ quality’ of’ this’ case’ study’ assignment.

Last but not least, I thank to all whom direct and indirectly help me in completing this assignment and I was able to complete this task within the time given.

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TABLE OF CONTENTS TITLE PAGE..............................................................................................................................i ACKNOWLEDGEMENT...........................................................................................................ii TABLE OF CONTENTS...........................................................................................................iii LIST OF TABLES....................................................................................................................iv LIST OF FIGURES...................................................................................................................v 1. COMPANY INFORMATION 1.1

BACKGROUND OF COMPANY..............................................................................1

1.2

ORGANIZATIONAL STRUCTURE..........................................................................2

1.3

PRODUCTS/SERVICES..........................................................................................3

1.4

BUSINESS/MARKETING/OPERATIONAL STRATEGY..........................................6

1.5

FINANCIAL ACHIEVEMENT...................................................................................7

2. COMPANY ANALYSIS 2.1

SWOT ANALYSIS..................................................................................................11

3. FINDINGS AND DISCUSSION........................................................................................12 4. RECOMMENDATION AND IMPROVEMENT..................................................................16 CONCLUSION.......................................................................................................................19 REFERENCES.......................................................................................................................2 0

iii

LIST OF TABLES

Table 1: Products/Services......................................................................................................3 Table 2: Historical Financial Summary...................................................................................10 Table 3: SWOT Analysis........................................................................................................11 Table 4: Discussion................................................................................................................15

iv

LIST OF FIGURES

Figure 1: Organizational Structure.........................................................................................2 Figure 2: Net Sales, Operating Profit and Operating Margin.................................................7 Figure 3: Net Profit (Loss) per Share and Return on Equity..................................................7 Figure 4: Interest-Bearing Debt and Interest-Bearing Debt Ratio..........................................7 Figure 5: EBITDA and Free Cash Flow..................................................................................7 Figure

6:

Net

Sales

by

Reportable

Segment..........................................................................8 Figure 7: Operating Margin by Reportable Segment.............................................................8 Figure 8: Shiseido Share Price and Nikkei Stock Average....................................................8 Figure 9: Price Earnings Ratio (PER) and Price Book Value Ratio (PBR).............................8 Figure 10: Cash Dividends per Share, Consolidated Payour Ratio and Dividend Yield.........9 Figure 11: Shiseido Reviews..................................................................................................13 Figure 12: Shiseido faces competition...................................................................................14

v

1. COMPANY INFORMATION

Company

Shiseido’ was ed’by 1872 Arin uhara’as Japan’s’first’western style’pharmacy’in’Ginza, Japan’s’fashion’and cultural’hub.

1888

Launched Japan's first toothpaste.

1981

Introdu sub-brand called Aupres and positioned it as an elite brand.

Late 1970s

Started penetrating foreign markets in Europe and US with specific product lines.

Introdu anti1982 aging skincare line called Benefiance, the shiseido relaxing fragrance cultivated with new aromacology.

1997

Awarded with the US Fifi Award and came out with another brand extension called Za.

2003 1897

Ventured into cosmetic business by launching a cosmetic product called Eudermine.

1964

Launched the first product for global market, named Zen.

Released Majolica Majorca, a brand targeting teenagers and young women in their 20s. 2017

1918

Launched perfume.

1937

Came out with first line of cosmetics.

Launched Recipist, a skin care brand with products retailing at USD 8.88 and less, packaged in smaller bottles to fit the small spaces that young women often live in. 2019

Head office: 5-5, Ginza 7-chome, Chuo-ku Tokyo 104-0061, Japan. Main office: 6-2, Higashi-shimbashi 1-chome, Minato-ku, Tokyo 105-8310, Japan.

Completed a 12-year research initiative to discover a new antiaging active ingredient, Stemlan-173 that will be used in their skincare products. 1

1.2

Organizational Structure

Masahiko Uotani Representative Director, President and CEO

Yoichi Shimatani Representative Director, Executive Vice President

Yukari Suzuki

Norio Tadakawa

Director, Executive Corporate Officer

Yoshiaki Fujimori

Shinsaku Iwahara

Yoko Ishikura

Takeshi Yoshida

Akiko Uno

Audit and Supervisory Board Member

Yasuko Gotoh

Kanoko Oishi

External Director (Independent)

Hiroshi Ozu

Ritsuko Nonomiya

External Audit and Supervisory Board Member (Independent)

Figure 1: Organizational Structure 2

1.3

Products/Services

The’ Shiseido’ brand’ portfolio’ consist’ of 6’ categories, ’each ’catering ’to ’specific consumer’ needs:

Prestige: Shiseido, Cle de Peau Beaute, IPSA, BENEFIQUE, bareMinerals, NARS, Laura Mercier, Drunk Elephant Fragrance: Alaia Paris, Dolce & Gabbana, Elie Saab, ISSEY MIYAKE, narciso rodriguez, Serge Lutens, Zadig & Voltaire, Tory Burch Cosmetics: ANESSA, AQUALABEL, AUPRES, Avene, d program, ELIXIR, ettusais, HAKU, INTEGRATE, Majorlica Majorca, MAQuillAGE, PRIOR, PURE & MILD, REVITAL, urara, Za Personal Care: AG Deo 24, Aquair, Ma Cherie, Sea Breeze, SENKA, TSUBAKI, Uno Professional: Shiseido Professional (Hair products) Health: Ihada, The Collagen

Shiseido has many type of products. Some of their top best seller's products are: PRODUCT

USES

Strengthen’ skin’ and! resist! damage.  The! Ultimune! serum! strengthens! skin against! daily! damage! and! visible! signs!of aging! for! skin! that’s! 28%! stronger!in just 1 week. Ultimune Power Infusing Concentrate

Anti-aging eye cream!and corrects!wrinkles.  An! anti-aging! eye! cream! that! hydrates!and visibly! corrects! wrinkles!in !just!1 week. Benefiance Wrinkle Smoothing Eye Cream 3

SPF 23! anti-aging! day! moisturizer.  A! daily!anti-aging! day! moisturizer! with!SPF 23 that! visibly! corrects! wrinkles. Skin!is!left Benefiance Wrinkle Smoothing Day

smooth, !hydrated! and! radiant.

Cream SPF 23

Smooths skin !and !reduces! sagging.  High-performance! anti-aging!

cream!

for

resilient-looking !smooth!skin. Bio-Performance Advanced Super Revitalizing Cream

Defends! against! skin! damage! to! the! eye areas.  An! eye! serum! that! helps! defend! against Ultimune Eye Power Infusing Eye

damage! caused! by! friction.

Concentrate

Daily, !ultra-light, !oil-free sunscreen.  A! daily, !ultra-light, !oil-free! sunscreen!lotion for !the! face ideal! for! oily!skin. Urban Environment Oil-Free UV Protector SPF 42 Sunscreen

4

Daily! gel! moisturizer, !brightens!skin.  A!

refreshing,

!light!

and!

smooth!gel

moisturizer! cream! that! corrects! and!preemptively! targets! the! causes! of!dark!spots and!discoloration. White Lucent Brightening Gel Cream

Light, !dewy!softener!ideal!for!oily!skin.  A!light, !dewy! softener! that! targets! sebum and! refines! skin.

Treatment Softener (for normal and combination to oily skin)

Balances! skin's! moisture! level! to! create hydration.  Legendary! softener! that! delivers* moisture for* smooth, *supple*skin. Eudermine Revitalizing Essence

Daily-use*face*cleanser*and*shaving*foam.  Removes dirt*and*oil, *lather*can*double*as shaving*cream.

Shiseido Men Cleansing Foam Table 1: Products/Services

1.4

Business/Marketing/Op 5

1.4.1 Target Market 

For all ages starting from 12 years old



Individuals that loves beauty



Individuals that values inner and outer care



Individuals that wants beauty and health that lasts although already in their 40s



Individuals that wants to get a skin treatment suitable to their problems

1.4.2 Marketing Strategy

Shiseido, seeking to become a truly excellent company that is admired and respected around the world, has a variety of products which consists of skincare products, cosmetics, fragrances, hair products and also health products. Shiseido is recognized globally with its own uniqueness. For example, Shiseido*came*out*with&unique&fragrances and&cosmetics/ made/ from/ natural/ flowers/to maintain/its/uniqueness. It6was 6quite6easy for Shiseido6to6gain6a6high6level6of6acceptance6in6its6domestic6market6as the heritage of6the6brand6was6well6known.

Besides that, Shiseido group implied a dedicated design where they build upon culture and history, reflecting those used in ancient Japanese calligraphy for their newest range that consists of five handcrafted brushes. They also make us the power of expert incluencer marketing trough inspirational artists such as a ballet dancer Sonoya Mizuno, global multimedia artist YiZhou, singer Banks and make up artist Kara Yoshimoto-Bua (Spencer, 2018).

Shiseido implied the marketing strategy by focusing on the promotion for the price of the services for the special days such as New Year, National day, Hari Raya Aidilfitri and Aidiladha, Chinese New Year, Deepavali and Christmas Day.

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As of now, Shiseido group marketing strategy is to use social networks at its maximum capacity. These are the media on which the company uses as a marketing platform:

Instagram

Hermo

Lazada

Facebook

Shiseido official website

Amazon

YouTube

LinkedIn

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1.5

Financial Achievement

Figure 2: Net Sales, Operating Profit and Operating Margin

Figure 4: Interest-Bearing Debt and Interest-Bearing Debt Ratio

Figure 3: Net Profit (Loss) per Share and Return on Equity

Figure 5: EBITDA and Free Cash Flow

8

Figure 6: Net Sales by Reportable Segment

Figure 8: Shiseido Share Price and Nikkei Stock Average

Figure 7: Operating Margin by Reportable Segment

Figure 9: Price Earnings Ratio (PER) and Price Book Value Ratio (PBR)

9

Figure 10: Cash Dividends per Share, Consolidated Payour Ratio and Dividend Yield

10

Table 2: Historical Financial Summary 11

2. COMPANY ANALYSIS 2.1 SWOT Analysis

POSITIVE

NEGATIVE

WEAKNESSES

STRENGTHS

INTERNAL FACTORS



A well-known brand around the



Higher price for most products.

world, well established in global



Niche market located in upper class society.

market. 

Strong

and

international



High quality products.



Huge variety of products.



Team management problem and poor customer service.

distribution network. 

Need more investment in new technologies.

THREATS

OPPORTUNITIES

EXTERNAL FACTORS



Growing wealth, especially for



Strong existence of competition.

those who takes a good care of



Uncertainty

of

customer

their skin.

demand, risk of product when



Partnerships with different firms.

produced a lot of quantity but



Target market is not only for

the actual demand was not

women but also for men.

compatible

with

the

total

product produced. 

High cost of raw materials.

Table 3: SWOT Analysis

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3. FINDINGS AND DISCUSSION 3.1 Findings Shiseido is a brand that has a very applaudable aspect that makes them as one of the top cosmetics brand around the world. However, there are also some issues and challenges arise in their development of business. Therefore, any possible risks that might interrupt the development process have to be analyzed so that those issues could be avoided or minimized.

i.

Consistency in positioning Although Shiseido has created a huge brand and has positioned itself in the US and

European markets as6a6high-end6premium6and6luxury6brand, they still have difficulty spreading their products around the world because they have to compete with any other good brands that cause them having difficulties in positioning. Shiseido6should6take6steps to6ensure6that6it6conveys6its6varied6positioning6carefully6in6its6various6markets6with customers6travelling6around6the6world, a6global6media6landscape6and with the internet making information flow much easier across countries. In addition, it is also difficult for Shiseido to maintain the Asian-Western blend it created between the oriental mystique and the science and technology of western cosmetics. It becomes significant as Shiseido has acquired brands with its own heritage and unique brand storeys in the US and Europe. Given6this, it6will be6quite6a6challenge6for6Shiseido6to6carry6on6with the blending as that is one of its strongest differentiation factors (Roll, 2019).

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ii. Ineffective team management Although their management seems organized, there are also some issues or bad reviews and complaints have been received by Shiseido group especially in the management of UK (Trustpilot, 2020). There were complaints about how the customers experienced missing orders, lost communication, terrible services and more. All of these can make customers lose their trust and being skeptical with the company. Some of the complaints are proven with the pictures as shown below:

Figure 11: Shiseido Reviews 14

iii. Strong competition Aside from being a well-known products in global market, Shiseido also have to face strong competition since their market6is6highly6fragmented, which6makes6it6more competitive. Their6market6is6never6too6concentrated, and6as6a6result, it has6players6of varying6size6of6operation6from6very6small6to6big6players. Besides that, there is also a high6threat6of6substitutes6because6of higher6competition. The higher competition can lead to imitation of products and systems. This imitation will make substitute products similar to each other, as much as possible. Shiseido 6competes6with6a wide6assortment firm6in6the6local6as well as6international6market. For instance, the6organization competes against6significant6companies6as well as against6cheaper6companies6that offer cheap priced6items6and6products. Shiseido group faced an intense competition with other brands such as L'Oreal and Estee Lauder (Balmer, 2019) and with other companies (Penning, 2012).

Figure 12: Shiseido faces competition

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3.2 Discussion

PROBLEMS

ALTERNATIVE SOLUTIONS Focus6on6differentiating its6product6and6increasin g its6demand6with6the6end consumers6through different6marketing6tactics

ADVANTAGES

DISADVANTAGES

Increases the demand6of the product6with different6buyers

Revenue increases are not guaranteed

Do market expansion and make use of social media to interact and reach with customers

Able to convince customers and gain trust about their products

Compromised6qualit y where6increasing the production output may lead to a decline in quality, which can lead to loss of customers or sales

Team leader need to be trained well to satisfy the demand of customers

Good communication can be achieved between buyers and seller

The company have to invest more money to send leaders for special training

Hire more staff in management department

Have backups to handle the customer's request especially on websites or social media so there will be no lost of communication

The company have to train the apprentice to be expert worker so that the worker can deal with customer effectively

Build partnership with different firms

Can be on the same level with another luxury brands

Different working styles to handle certain tasks

Improving value chain network

Able to reach the target market audience more effectively

Rise in financial investment and takes a lot of time

Consistency in positioning

Ineffective team management and poor customer service

Strong competition

Table 4: Discussion

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4. RECOMMENDAT...