With the Opening of the Beauty Innovation Hub in China’s Shanghai: Strategic Management Report, NUS, Singapore

Shisiedo Case Study

With the opening of the Beauty Innovation Hub in China’s Shanghai WeWork space in January 2020, Shisiedo reaffirmed its commitment to working directly with its consumers. The Beauty Innovation Hub is also the latest move towards establishing market dominance in China, a move that started in 1981 when it first began selling directly to the Chinese consumer in Beijing.

The choice of location for this new venture is no accident. Shiseido wanted to place its expansion at the heart of Chinese innovation and business start-ups. For Shisiedo, it was important to be seen as both aggressively innovative and to be supporting the Chinese industry and economic development.

Heritage and History

A Japanese heritage company that presents as its mission, ‘Beauty innovations for a better world’, Shisiedo began life in Ginza, a wealthy area of Tokyo as a high street pharmacy in 1872. Arinobu Fukuhara, an ex-Japanese naval pharmacist who was influenced by American culture and business methods, first began selling American-style cold creams and beauty treatments to Japanese consumers. In 1897, Shiseido produced its first cosmetic product, Eudermine, a skin moisturizer, and replenishing lotion.

Business Portfolio Development

The late 1970s and 1980s saw Shisiedo develop its new ‘Lifestyle’ philosophy which promoted high-quality products, with premium product ingredients and service standards. Serge Leutens, the French creative artist, was engaged to develop a European ethos for Shisiedo’s marketing and promotional endeavors.

Using the information in the case study you must provide a 2,000 word (+/- 10%) management report that contains the following three specific sections:

i) A brief overview of the most significant opportunities for Shiseido in the global beauty and personal care industry.

ii) With reference to the overview above, a critical assessment of the options Shiseido has for expanding its international business and competing more effectively globally.

iii) A recommendation for the ONE option from those that you identify in response to point (ii) that Shiseido should focus on first. Please provide a justification for this option and an explanation of how it will be implemented through changes to the organization’s structure, systems, people processes, and culture.

Guidance note: The management report that you produce must be aimed at a Board level audience within Shiseido. Hence you can assume the readers have detailed knowledge of the firm and that repetition of detail from the case study is not required.