Case Evaluation: Asahi Beverages, Ltd.
Case Evaluation: Asahi Beverages, Ltd.
Case Evaluation: Asahi Beverages, Ltd.
EVALUATE THE CASE. WHAT IS THE STRATEGIC PROBLEM THAT ASAHI FACES?
CASE EVALUATION
Asahi is a Japanese beer manufacturing company that has strong competition with Sapporo, Sapporo and Kirin. Kirin is a largest company of beer that is present in Japan that has 60% market share and have extensive distribution center for its products. Only remaining 405 shares of beer market are occupied by the rest of beer tycoons. However, in the year 1980 a tremendous changes seen in the taste of Japanese inhabitants for the taste of beer. These years were challenging for the existence of beer companies in the market.
Under these circumstances, Asahi take an effort to differentiate its products from the competitors. They offer dry beer to their customers with the hope that they may able to share a large portion of beer market. Meanwhile, its presidents Hirotaro Higuchi decided to invest in their company so that they may able to offer new taste to satisfy the customer demands according to their changing taste. There is a need to analyze that where the company has to invest their new capital in their company. Whether they have to invest in the market development, production or strategic development for the sake of occupying more market share remain a question mark. Asahi has pride of long history beer production, employee’s relationship management and social commitment with the society.
Asahi also has good relations with local partners, stakeholders and also with local communities. It is also seen in the history of Asahi when the sale of a company has been declined so badly that a company reached near the extinction. Employees suffered from lower morals due to forced retirements. In the same year new president named Tsutomu Murai joined the company and began horizontal communication philosophy across the functional teams. He took these steps to give a strong support to the company swiftly decline goodwill. He also took different efforts to improve the product quality through the collaborative internal and external efforts. From the research, it showed; that Asahi has to give quick response to the highly changing taste of the beer of customers. Asahi has gone parallel with new requirements and introduced new products that are an evident about Asahi that they can sense and respond to the changing market conditions. It is a boosting step for increasing the rapidly declining morals of the employees and increasing market share.
On the whole, Asahi case was a good practical example for improving strategies and analyzing the impact of intensive growth strategy upon the success of an organization.
STRATEGY PROBLEMS
Due to high demand of new beer taste from the customers Asahi’s was willing to invest more in the different areas of the company. Due to these investment market shares of the company reached 1.4 billion yen in the year 1985. Hitherto, in the year 1987 the market share of Asahi reached 12% and 11% additional increase appeared in 1990. Their strategy to increasing packaging capacity through the invest of 230 billion yen from 1989 to 1990 result in the form of 33% increase of their sale.
Large beers were the choice of the old generation, and now the new generation segment of the market wants draft and dry beer according to their changing taste. From the research, it is observed that 42.2% market segments have these demands. They invest more and more for product development and get 20.5% market share as compared to beer market tycoon who has 9.8% market share. Due to relying more upon the investment upon new venture Asahi lost value of their assets up to 700 billion yen. Company has increased their inventory that increases the chances of their bankruptcy. Over production and unwise invest through heavy budget was their biggest strategic problem.
GENERATE AT LEAST ONE ALTERNATIVE THAT ASAHI COULD DO. SUPPORT YOUR ANSWER.
ALTERNATIVE STRATEGY #1
There are two alternatives that Asahi can do that help it to change its overall image. First alternative is Asahi should create new departments. From these departments, one department should monitor the product development while other should take care about selling of the product. Product development department should only care about the product development and should have no link with the selling of the product. Their main focus should be on the developmental activities regarding the product, not its production.
Similarly, sales department take care about the sale. Sale people should have no influence upon development or production of products. Such step helps the company to save itself from the corruption that came from the sale or production departments of