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

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

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 1. COMPANY INFORMATION

1.1 Background of Company

1872 1981 1982

Shiseido was started by Introduced the first anti-

Arinobu Fukuhara as Introduced a sub-brand aging skincare line called
Japan’s first western called Aupres and Benefiance, the shiseido
style pharmacy in Ginza, positioned it as an elite relaxing fragrance
Japan’s fashion and brand. cultivated with new
cultural hub. aromacology.

Late 1970s 1997

1888

Started penetrating Awarded with the US Fifi

Launched Japan's first foreign markets in Award and came out with
toothpaste. Europe and US with another brand extension
specific product lines. called Za.

2003
1897 1964

Released Majolica
Majorca, a brand
Ventured into cosmetic targeting teenagers and
business by launching a Launched the first product young women in their
cosmetic product called for global market, named 20s.
Eudermine. Zen.
2017

1918 1937

Launched Recipist, a
skin care brand with
products retailing at
Came out with first line of USD 8.88 and less,
Launched perfume. packaged in smaller
cosmetics.
bottles to fit the small
spaces that young
women often live in.
2019
Completed a 12-year
Head office: research initiative to
5-5, Ginza 7-chome, Chuo-ku discover a new anti-
Tokyo 104-0061, Japan. aging active ingredient,
Stemlan-173 that will
Main office: be used in their
6-2, Higashi-shimbashi 1-chome, skincare products.
Minato-ku, Tokyo 105-8310, Japan.

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 1.2 Organizational Structure

Masahiko Uotani
Representative Director, President and CEO

Yoichi Shimatani
Representative Director, Executive Vice President

Yukari Suzuki Norio Tadakawa Takeshi Yoshida Akiko Uno

Director, Executive Corporate Officer Audit and Supervisory Board Member

Yoshiaki Shinsaku Yasuko Hiroshi

Fujimori Iwahara Gotoh Ozu

Yoko Kanoko Ritsuko

Ishikura Oishi Nonomiya

External Director (Independent) External Audit and Supervisory Board

Member (Independent)

Figure 1: Organizational Structure

2
1.3 Products/Services

The Shiseido brand portfolio consists 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

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 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 againts skin damage to the eye

areas.

 An eye serum that helps defend against

damage caused by friction.

Ultimune Eye Power Infusing Eye
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

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 Daily gel moisturizer, brightens skin.

 A refreshing, light and smooth gel moisturizer

cream that corrects and pre-emptively 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/Operational Strategy

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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. It was quite easy for

Shiseido to gain a high level of acceptance in its domestic market as the heritage of the

brand was well known.

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 Amazon

website

YouTube LinkedIn

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1.5 Financial Achievement

Figure 2: Net Sales, Operating Profit and Figure 3: Net Profit (Loss) per Share and
Operating Margin Return on Equity

Figure 4: Interest-Bearing Debt and Figure 5: EBITDA and Free Cash Flow
Interest-Bearing Debt Ratio

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 Figure 6: Net Sales by Reportable Figure 7: Operating Margin by Reportable
Segment Segment

Figure 8: Shiseido Share Price and Nikkei Figure 9: Price Earnings Ratio (PER) and
Stock Average Price Book Value Ratio (PBR)

9
 Figure 10: Cash Dividends per Share,
Consolidated Payour Ratio and Dividend
Yield

10
Table 2: Historical Financial Summary
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2. COMPANY ANALYSIS

2.1 SWOT Analysis

POSITIVE NEGATIVE

STRENGTHS WEAKNESSES
 A well-known brand around the  Higher price for most products.

world, well established in global  Niche market located in upper

INTERNAL FACTORS

market. class society.

 Strong and international  Team management problem and

distribution network. poor customer service.

 High quality products.  Need more investment in new

 Huge variety of products. technologies.

OPPORTUNITIES THREATS
 Growing wealth, especially for  Strong existence of competition.

those who takes a good care of  Uncertainty of customer

EXTERNAL FACTORS

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 as a high-end premium and luxury brand, 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. Shiseido should take steps to

ensure that it conveys its varied positioning carefully in its various markets with customers

travelling around the world, a global media landscape and 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. Given this, it

will be quite a challenge for Shiseido to carry on with 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

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iii. Strong competition

Aside from being a well-known products in global market, Shiseido also have to face

strong competition since their market is highly fragmented, which makes it more competitive.

Their market is never too concentrated, and as a result, it has players of varying size of

operation from very small to big players. Besides that, there is also a high threat of

substitutes because of higher competition. 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 competes with a wide assortment firm in the local as well as

international market. For instance, the organization competes against significant companies

as well as against cheaper companies that offer cheap priced items and products. 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

ALTERNATIVE
PROBLEMS ADVANTAGES DISADVANTAGES
SOLUTIONS
Focus on differentiating its
Increases the
product and increasing its
demand of the Revenue increases
demand with the end
product with different are not guaranteed
consumers through
buyers
different marketing tactics
Consistency
Compromised quality
in positioning
where increasing the
Do market expansion and Able to convince
production output
make use of social media customers and gain
may lead to a decline
to interact and reach with trust about their
in quality, which can
customers products
lead to loss of
customers or sales

The company have

Good communication
Team leader need to be to invest more
can be achieved
trained well to satisfy the money to send
between buyers and
demand of customers leaders for special
Ineffective seller
training
team
management Have backups to
The company have
and poor handle the
to train the
customer customer's request
apprentice to be
service Hire more staff in especially on
expert worker so that
management department websites or social
the worker can deal
media so there will
with customer
be no lost of
effectively
communication

Can be on the same Different working

Build partnership with
level with another styles to handle
different firms
luxury brands certain tasks
Strong
competition Able to reach the
Rise in financial
Improving value chain target market
investment and takes
network audience more
a lot of time
effectively

Table 4: Discussion

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4. RECOMMENDATION AND IMPROVEMENT

Problem 1: Consistency in positioning

Solution: 1. Focus on differentiating its product and increasing its demand with the end
consumers through different marketing tactics

To solve the company's consistency in positioning, the best solution that can be

implied is by focusing on differentiating its product and increasing its demand with the end

consumers through different marketing tactics. This is because they have to compete with

any other good brands which make their position is threatened somehow, which leads to

difficulties in mantaining their position.

If they keep focusing on differentiating their product and increasing its demand with

the end consumers through different marketing tactics, customers will find the products to be

unique and might attract them to purchase their products. Besides that, if Shiseido group

keep on updating their products along with customers' demands especially on social

networks, more people will recognize their products. This is due to the popularity and

demands by the customers, they can generate more revenue if they introduce more variety

product. Moreover, much more good points will be added to the brand if they manage to pull

out their own brand feeling to their products so that the brand can stand still in the market

and proudly compete with other well-known brand and in order to do so, they need a

designer that can understand the inside and outside of Shiseido group.

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Problem 2: Ineffective team management
Solution: 2. Hire more staff in management department

Apart from that, despite the brand name of Shiseido group that has taken the eyes of

people from days to days, the company has an ineffective team management and low

cooperation from their team that many complaints were reported. There were said to be no

communication as the customers check out their order. This might be due to lack of staff in

management department that can handle customers online, specifically on their websites.

This downside of the company make the financial, marketing, business, operational and

technology strategies have many ‘holes’ here and there.

To get rid of these ‘holes’, the company should first creates a strong production

management team so that the company can have a same level attention to those strategies

without neglecting any one of them. Indeed, the company should hire more staff in their

management department, so that they will have backups to handle the customer's request

especially on websites or social media so there will be no lost of communication. With a

strong production management teams, the company will have more stable and efficient ways

to get their products reaching their customers at the most satisfying ways. Management

team is also responsible in making sure the level of effectiveness and comfortability of staff

when working by taking the workspace and time management into consideration.

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Problem 3: Strong competition
Solution: 2. Improving value chain network

Based on the findings, it can be said that Shiseido group might face some problems

in the future regarding the competitiveness of the product. It is really known that this

company sell a premium quality of products thus the overly price. Some people might think

that a cheap product with short lifetime or an expensive product with high quality and longer

lifetime is far more preferable over a product with a high price that doesn’t have a long

lifetime. However, it still depends on the individuals.

In order to be in a healthy competition, the company should improve value chain

network. By doing so, the company will be able to reach the target market audience more

effectively. If the value chain can be improved, it will indirectly improve their brand

reputation, increase productivity and improve customer satisfaction. In fact, they also should

focus on research and development to identify market niche as well as to be able to add

differentiating factors to its products. This will increase its shield againts influence from

competitive forces and their actions.

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CONCLUSION

In a nutshell, Shiseido has succeeded in making a transition from a small family start-

up to a relatively large company, having plenty of goods on the market that is known for its

supposedly high quality along with skyrocketing prices and a well-paid consumer base.

These last three listed points are the exact reason for change and make innovational

revision of the current product a necessity in terms of intelligently establishing new markets

for this brand by providing products not just for high paying upper-class society members,

but for all different kinds of people. To achieve a wider range of customers, various steps of

change are to be made with the aim to innovate the company’s product, dominate new

markets, and increase sales throughout the globe.

Therefore, their major problems for this company have been summarized and have

been listed in findings. In order to survive in competitive markets, the company should take

actions by making some changes in their business plan. This case study explained how to

tackle the problem by coming out with new ideas and multiple solution in order to solve and

minimize the problem.

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REFERENCES

Balmer, E. (2019). Japanese cosmetic giant Shiseido gambles on 'Made in Japan'. Retrieved

October 28, 2020 from

https://www.japantimes.co.jp/news/2019/12/05/business/corporate-business/shiseido-

made-in-japan/

Penning, A. (2012). Shiseido Grows While Fighting Increased Competition. Retrieved

October 27, 2020 from

https://www.gcimagazine.com/business/marketers/financials/149290865.html

Roll, M. (2019). Shiseido - The Iconic Asian Cosmetics And Skincare Brand. Retrieved

October 29, 2020 from https://martinroll.com/resources/articles/asia/shiseido-the-asian-

cosmetic-brand/

Shiseido. (2020). Skin Care. Retrieved October 29, 2020 from https://www.shiseido.com.my/

Spencer, N. (2018). Shiseido redesigns innovation and texture in make up. Retrieved

October 28, 2020 from https://www.cosmeticsdesign-

asia.com/Article/2018/07/31/Shiseido-redesigns-innovation-and-texture-in-make-up

Trustpilot. (2020). Shiseido Is Rated "Poor" With 2.5 / 5 On Trustpilot. Retrieved October

27, 2020 from

https://www.trustpilot.com/review/www.shiseido.co.jp

WARC. (2020). Shiseido looks ahead through familiar challenges. Retrieved October 29,

2020 from https://www.warc.com/newsandopinion/news/shiseido-looks-ahead-through-

familiar-challenges/43265

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