Organizational Inertia and Excessive Product Proliferation

This study investigates the internal factors of excessive product proliferation. Since empirical literature on product over-proliferation focused on how to optimize existing product portfolio, the causes of excessive product proliferation have so far attracted little attention. This study employs a case study of Shiseido, a famous Japanese cosmetics company, with particular attention to product proliferation in the Shiseido chain store channel, because external factors are mostly absent from this case. My results indicate that intra- and inter- organizational inertia affects product line management. Due to Shiseido’s effort in the 1990s, the company could maintain the advantage it and its cosmetics store channel held with much the strategy as had been used until the mid-1970s. This strengthen intra-organizational inertia at Shiseido. Inter-organizational inertia with cosmetics stores makes Shiseido’s strategic change more difficult, which causes excess proliferation.