e, the company should be able to successfully penetrate these untapped markets. As for the change in global age structure and the upcoming of Generation Xers, this provides Kao an excellent opportunity to capitalise on the future. As Kao already has the ability to discover consumers needs, Kao should undertake efforts to understand the taste, needs and wants of the Generation Xers. Accompanied by Kao’s superior Research & Development capabilities to develop new products especially targeted at the Generation Xers. With the support of Kao’s strong sales force, Kao would be well position to obtain competitive advantage in the future. Another important trend is the liberalisation of trade worldwide. With WTO, efforts to remove trade barriers, it is a golden opportunity for Kao Corporation to steer the company towards globalisation. By moving from a multidomestic company to a global company Kao Corporation can enjoy higher levels of Economies of Scale. Free Trade will ease Kao’s entry into countries, which previously impeded while the removal of tariffs and levies will increase Kao’s profitability. WO Strategies As we know one of Kao’s major weaknesses is the many levels in the distribution channel. This can be overcome through the use of the Internet and its E-commerce capabilities. E-commerce will link Kao directly to the consumers and this in turn will make it possible for Kao to reduce its logistic cost, as there would be no more middlemen cost. In addition, prices can be lowered due to no middlemen mark ups, thus an increase in consumer’s surplus. Kao is one of the oldest companies in Japan and yet it is not as successful as some of the Keiretsu companies like Toyota and Mitsubishi. These companies are very well diversified with high levels of forward and backward integration. Keiretsus experiences a lot of cost savings and economies of scale. As the world economy is changing the future is very unpred...
