Currently Kao Corporation is a multidomestic company. However, the world is moving towards globalisations but Kao Corporation is not showing signs to steer the company towards this end. There are no clear strategies that are aiming at transforming Kao into a global company, which would benefit Kao Corporation in the long run. Financial Analysis For the financial year ended 31 March 1999, Kao Corporation’s consolidated net sales saw an increase of 1.9% to 924.5 billion. (Refer to Appendix B). Despite the sluggish Japanese market, domestic sales of household products continued to increase by 1%. This was largely due to the company’s ability to improve its products while introducing new products into market. These were made possible through the Research & Development efforts of Kao research team. In the Asia and Oceania region, Kao Corporation was able to strengthen its core brands that resulted in the increase in the region sales. Despite the Asian crisis, Kao Corporation managed to expand sales. This proved that the company's strategy to build brand power was a right move. As for North America and Europe region, the strong sales performance by Biore facial core products, Kao’s sales were substantially boosted. In addition, Kao took several other strategic steps to strengthen its presence in the region. In May 1998, Kao Corporation acquired Bausch & Lomb Inc, which is a skin core company founded in the United States. In the Europe, Kao Corporation formed a strategic alliance with Beiersdorf A.G in Germany to launch Nivea Usage. Following are some of the key financial ratios, which I believe would be useful to give us a better insight of the company’s financial standings: - Return on Equity (Refer to Appendix C) The return on Equity of Kao Corporation has been fluctuating between 5% to 7.68% in the past 5 years. The low was during the year ended 31 March 1998 where the ROE was 5.77%. This was probably due to the slu...
