Industry perspective: Michitaka Sawada — Kao Corp

Industry perspective: Michitaka Sawada — Kao Corp

Kao Corp CEO reveals why understanding consumer values is vital.

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Michitaka Sawada

Credit: Bloomberg/Getty Images

How would you describe Kao’s strategy?

Our strategy is that we pursue the ‘Kao Way’ – integrity is the pillar of our corporate strategy. That’s not just about compliance, it’s about being true to who we are, to walk the right path as we do our business. And that leads, again, to us going deep into the essence of things through our R&D to acquire the best scientific knowledge, and to try to offer the best to our consumers by applying the technologies we have developed. So, the Kao Way is like a compass that we refer to if we are facing difficulties or are unsure what to do. For many consumers, especially Millennials, it matters a lot if a company is seen to be authentically contributing to society. Another important aspect of the Kao Way is to offer ‘half a step ahead’ proposals to consumers: products that delight and surprise them.

How will Kao grow its business?

We have a lot of assets related to our core businesses of toiletries, beauty, health, and cleaning products – and we need to leverage them to grow our business and move into new fields. Our main pillar of growth will be to grow organically. In an aging society, the greater part of our growth will come from health. Not only in products and foods but other value propositions that maintain and improve people’s wellbeing. We could acquire new assets in the B2B area, specifically in chemicals, if we find technological synergies.

How is digital technology affecting the company’s business?

With smartphones, consumers are digging deeper into information and having more one-on-one conversations about a particular topic. So we no longer have a mass market. As consumers’ values diversify, we will need to adapt the way we do business. With purchasing points also diversifying, the conventional model of making our products conspicuous through mass marketing – TV advertising – must change.

How do you evaluate consumer behavior?

We engage in three major initiatives. With our echo system, we collect vast data from consumers on everything from complaints to suggestions to improve our products. We have a team that follows how consumers discuss our products on social media and the key messages are reflected in our product development. And we do lifestyle research: making home visits and interviewing consumers one-on-one to understand their inner needs and behavior.

What steps has the company taken to encourage innovation?

One strength of our innovation capabilities is that we have always translated the findings from our extensive research into new technologies and value propositions for our consumers. One example is our new foam hand-dishwashing liquid detergent. Consumers spray the dishwashing liquid onto greasy dishes and if you leave it for a few seconds, the grease is removed just by rinsing. Driving innovations that create value for the consumer is an all-out company-wide initiative. By simply changing the way you approach things, you create the opportunity to offer new ideas and build new businesses. In the digital age, there are vast opportunities for us to provide more benefits to society.

What is the biggest challenge facing Kao?

The rate – and the scale – at which things are changing is enormous. It’s a volatile market but despite this, the way we do things, approach things and how we think has been along conventional lines. I feel a very strong sense of urgency that we need to close the gap between the volatile, huge change outside, and the reluctance to change inside.

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