the risk of Forex fluctuations can be significantly reduced. As for the intensifying competition, Kao can try to merger or acquire a competitive firm. The acquired firm should be one that creates value for Kao Corporation. This would be especially beneficial if the acquired firm has a competitive advantage over Kao Corporation. However, this strategy could be quite capital consuming. Another alternative is to form strategic alliances with competitor for a mutual benefit. The idea is "if you can’t beat them, join them.” Strategic alliances can also be used to reduce the threat of buyers. By forming alliances with major retailers, Kao and retailers can stand to benefit from better understanding of each other’s needs and difficulties. Then together find a productive solution to the problem. Sometimes, business is not all about war, sometimes its about making friends who we can rely on. However, in the unlikely case of severe economic turmoil and accompanied by severe competition, Kao has to try to employ a turnaround strategy. Depending on the situation, it could use offensive strategies which would include low-cost or adopting a new differentiation strategy. This strategy would require significant resources. In a worse case scenario it could have no choice but to harvest what it has left and exit the industry as soon as possible. These strategies are very negative in nature. In my opinion, the best strategy is to ensure that the company never comes to this stage. Other Recommendations A part from the strategies, we have obtain through the use of the SWOT Analysis, there are other recommendation I would like to make. First of all, the company should take steps to look into its Financial Management. In sight of the company’s optimal capital structure in line with the Kao’s launch of the EVA program. High gearing might provide cheap capital to the firm. However the trade off is higher financial risk. Higher fina...
