Value Chain of Shiseido
Do you know what Shiseido is, Captivators?
Shisheido is a personal care company originated from Japan. Its products are skin care, hair care, cosmetics and also fragrance. It is founded in 1872, which makes Shiseido as one of the oldest cosmetics companies in the world. It is the largest cosmetic firm in Japan and World's largest cosmetic company No. 5. Today, we will go beyond the surface and analyze what makes Shiseido this amazing by the Value Chain Metod. The Value Chain Method is divided into several parts, which are the Administrative, Human Resources Management, Product and Technology Development, Procurement, Inbound Logistics, Operation, Outbound Logistics, Sales and Marketing and Servicing. In this part, all of these parts will be each elaborated.
Administrative
Shiseido is having an aggressive investment in priority areas for sustainable growth. The total investment are projected to be more than ¥300 Billion, included ¥130 Billion in New Factories and Supply Chain Management, ¥57 Billion in Counters, ¥32 Billion in Global Innovation Center and ¥27 Billion in IT infrastructure. Achievement of long-term stable and continuous dividend increases with improving in business results. Reduce the interest-bearing debt. Enhance the profitability by further cost structure improvement by: (1) improvement of COGS ratio through expansion of prestige brands or skincare and (2) reduction of ratio of personnel expenses and other expenses through expansion of top line and improvement of productivity. In other words, Shiseido keeps doing improvement in term of investing in lots of important and critical areas. Shiseido also improves their financial management by doing reevaluation and control.
https://www.shiseidogroup.com/ir/pdf/ir20180305_482.pdf
https://www.shiseidogroup.com/ir/library/annual/pdf/2017_12/anu_sec06.pdf
https://www.shiseidogroup.com/newsimg/37_d7y03_en.pdf
https://www.shiseidogroup.com/sustainability/supplier/
The Core Competencies of Shiseido
From the analysis, it is obvious that Shiseido is trying to be the leader in innovation for the growth of the business, society and environment. Besides the innovation, Shiseido also focuses in the sustainable materials, production services which accounted for all their production and distribution line. It also encourages the diversity, education and women empowerment. It is also a luxury product that focuses on the quality. Workshops are conducted for the consumers and society, while training is also conducted for the employees. The investment they done are also intended to create a better growth in the future. In other words, Shiseido tries to integrate and educate every stakeholder, in order to make everyone ‘happy’ - as what is written in their vision.
Shisheido is a personal care company originated from Japan. Its products are skin care, hair care, cosmetics and also fragrance. It is founded in 1872, which makes Shiseido as one of the oldest cosmetics companies in the world. It is the largest cosmetic firm in Japan and World's largest cosmetic company No. 5. Today, we will go beyond the surface and analyze what makes Shiseido this amazing by the Value Chain Metod. The Value Chain Method is divided into several parts, which are the Administrative, Human Resources Management, Product and Technology Development, Procurement, Inbound Logistics, Operation, Outbound Logistics, Sales and Marketing and Servicing. In this part, all of these parts will be each elaborated.
Administrative
Shiseido is having an aggressive investment in priority areas for sustainable growth. The total investment are projected to be more than ¥300 Billion, included ¥130 Billion in New Factories and Supply Chain Management, ¥57 Billion in Counters, ¥32 Billion in Global Innovation Center and ¥27 Billion in IT infrastructure. Achievement of long-term stable and continuous dividend increases with improving in business results. Reduce the interest-bearing debt. Enhance the profitability by further cost structure improvement by: (1) improvement of COGS ratio through expansion of prestige brands or skincare and (2) reduction of ratio of personnel expenses and other expenses through expansion of top line and improvement of productivity. In other words, Shiseido keeps doing improvement in term of investing in lots of important and critical areas. Shiseido also improves their financial management by doing reevaluation and control.
Human Resources
Shiseido recently renovate their workplace in order to create a more comfortable working environment for the employees that might improve the productivity. The management reviews the Key Performance Index that is based on the data in the workplace, to evaluate each worker’s result. They also recruit the young and baby boomer generation, thus it creates diverse generation employees. This results to lots of fresh ideas and considerations from these generations. The young and baby boomer employees are also prepared to have a leadership skill that may be useful for Shiseido in the future. Not just investment in term of technological and other technical stuff, Shiseido also invested on the human resource management. They increase the investment in talent development, including the leadership development that includes training and development program, comeback of study abroad program, recruitment of professional talent, global mobility, and establishment of Asia Learning Center in Singapore. Besides, they also encourage female empowerment and projected their female leaders to account for 40% in Japan. They also train their workers to learn English. Global Human Resources database are also developed in order to maintain the employees. In short, it is clear that Shiseido sees their employees to be one of their most important assets and treasure them by the means of training and development that benefits both parties.
Production and Technology Development
Invested in a Global Innovation Center which aims to create innovations through communication with all the stakeholders, especially the consumer to serve as a basic research and development base of Shiseido. Acquiring lots of sophisticated technology in order to improve the production line of Shiseido. Exploring new frontiers. By keep innovating and developing its products with sophisticated technology, Shiseido aims to be the leader in several global cosmetic markets.
Procurement
‘Good partnerships with partners’ which means that Shiseido aims to maintain its collaboration with the partners, including the supplier management. Fair purchasing transaction where it aims to make all the production and supply chain line to be ethical based on business value. Shiseido aims to make an action by complying with the rules or agreements that have been made. In conclusion, Shiseido is really concerned with the well-being of the supplier and aims to be a loyal customer of their suppliers in order to create a more synergized integration between one and another.
Inbound Logistic
Securing procurement of raw materials. The cooperation with suppliers to have an ethical and environmental products and materials. Thus, Shiseido is not just taking in cheaper or better quality raw materials, but they also look back on the planting or making process, so that they can ensure that they are not contributing to any non-sustainable products.
Shiseido recently renovate their workplace in order to create a more comfortable working environment for the employees that might improve the productivity. The management reviews the Key Performance Index that is based on the data in the workplace, to evaluate each worker’s result. They also recruit the young and baby boomer generation, thus it creates diverse generation employees. This results to lots of fresh ideas and considerations from these generations. The young and baby boomer employees are also prepared to have a leadership skill that may be useful for Shiseido in the future. Not just investment in term of technological and other technical stuff, Shiseido also invested on the human resource management. They increase the investment in talent development, including the leadership development that includes training and development program, comeback of study abroad program, recruitment of professional talent, global mobility, and establishment of Asia Learning Center in Singapore. Besides, they also encourage female empowerment and projected their female leaders to account for 40% in Japan. They also train their workers to learn English. Global Human Resources database are also developed in order to maintain the employees. In short, it is clear that Shiseido sees their employees to be one of their most important assets and treasure them by the means of training and development that benefits both parties.
Production and Technology Development
Invested in a Global Innovation Center which aims to create innovations through communication with all the stakeholders, especially the consumer to serve as a basic research and development base of Shiseido. Acquiring lots of sophisticated technology in order to improve the production line of Shiseido. Exploring new frontiers. By keep innovating and developing its products with sophisticated technology, Shiseido aims to be the leader in several global cosmetic markets.
Procurement
‘Good partnerships with partners’ which means that Shiseido aims to maintain its collaboration with the partners, including the supplier management. Fair purchasing transaction where it aims to make all the production and supply chain line to be ethical based on business value. Shiseido aims to make an action by complying with the rules or agreements that have been made. In conclusion, Shiseido is really concerned with the well-being of the supplier and aims to be a loyal customer of their suppliers in order to create a more synergized integration between one and another.
Inbound Logistic
Securing procurement of raw materials. The cooperation with suppliers to have an ethical and environmental products and materials. Thus, Shiseido is not just taking in cheaper or better quality raw materials, but they also look back on the planting or making process, so that they can ensure that they are not contributing to any non-sustainable products.
- Ethical supply chain
- Policy on human rights
Shiseido is concerned with the facts of exploitation that has been an issue in the global working culture; therefore, they try to enhance the productivity of the labor in different way. - Initiatives to address issues
There are lots of non-sustainable materials that are sold with cheaper price. However, this results in the exploitation of the environment, that caused harm for all human beings and natural environment. Shiseido tries to create awareness on these issues, by checking the background of their suppliers and force the suppliers to comply with their ethical and environment policy for a more sustainable production line.
Operation
They have their own product design and manufacturing regulation that complies to sustainable growth in order to create a product that can make people feel the beauty and be happy (vision). Introduced the solar power system and other renewable energy for the manufacturing process to save the energy. Redesign business processes, integration of IT platforms, centralized data management, and environmental conservation are also done by Shiseido.
Outbound Logistic
Reduction of inventories to press the depreciation cost and also to maintain the quality of the products until the customers’ hand. Aim to always let customers have the products in a timely manner. Actively creating production factories and stores in other countries to reach more customers. Has the machinery for making a 10-sided cardboard box for shipments that enables products to be packed without extra spaces, thereby the delivering process is easier. In other hand, it also saves the resources and reduces the emissions of CO2.
Sales and Marketing
Recreate brand experience through renewal of consumer touchpoints, including:
In 2018-2020, projected a ¥57 Billion investment.
Upgrade of VMD, which aims to create a better customer experience.
Partnership with key retailer on merchandizing.
Investment in VIOLET GREY, EC retailer for luxury brand
Expansion of brand shops
Cross border marketing
Aggressive investment in marketing – ¥120 billion
Enhancement of Digital Marketing
Empowering women and education on gender equality
Servicing
Training programs to develop digital literacy – a digital academy. Aim to improve consumer’s life quality. As an answer to consumer’s feedback, the amount of plastic used is reduced by 60% to consider saving the resources and to be the answer of consumer’s feedback where it is a waste to throw out the container, so they make it to be reusable and can be refilled.
Outbound Logistic
Reduction of inventories to press the depreciation cost and also to maintain the quality of the products until the customers’ hand. Aim to always let customers have the products in a timely manner. Actively creating production factories and stores in other countries to reach more customers. Has the machinery for making a 10-sided cardboard box for shipments that enables products to be packed without extra spaces, thereby the delivering process is easier. In other hand, it also saves the resources and reduces the emissions of CO2.
Sales and Marketing
Recreate brand experience through renewal of consumer touchpoints, including:
In 2018-2020, projected a ¥57 Billion investment.
Upgrade of VMD, which aims to create a better customer experience.
Partnership with key retailer on merchandizing.
Investment in VIOLET GREY, EC retailer for luxury brand
Expansion of brand shops
Cross border marketing
Aggressive investment in marketing – ¥120 billion
Enhancement of Digital Marketing
Empowering women and education on gender equality
Servicing
Training programs to develop digital literacy – a digital academy. Aim to improve consumer’s life quality. As an answer to consumer’s feedback, the amount of plastic used is reduced by 60% to consider saving the resources and to be the answer of consumer’s feedback where it is a waste to throw out the container, so they make it to be reusable and can be refilled.
https://www.shiseidogroup.com/ir/pdf/ir20180305_482.pdf
https://www.shiseidogroup.com/ir/library/annual/pdf/2017_12/anu_sec06.pdf
https://www.shiseidogroup.com/newsimg/37_d7y03_en.pdf
https://www.shiseidogroup.com/sustainability/supplier/
The Core Competencies of Shiseido
From the analysis, it is obvious that Shiseido is trying to be the leader in innovation for the growth of the business, society and environment. Besides the innovation, Shiseido also focuses in the sustainable materials, production services which accounted for all their production and distribution line. It also encourages the diversity, education and women empowerment. It is also a luxury product that focuses on the quality. Workshops are conducted for the consumers and society, while training is also conducted for the employees. The investment they done are also intended to create a better growth in the future. In other words, Shiseido tries to integrate and educate every stakeholder, in order to make everyone ‘happy’ - as what is written in their vision.
Comments
Post a Comment