Asahi Brewerie CaseEssay Preview: Asahi Brewerie CaseReport this essayAsahi Breweries Ltd.Willem Van NotenNorthwood UniversityMBA DeVosProblem StatementAsahi Breweries came up with a new type of beer that has increased their market share. Hirotaro Higuchi, President of Asahi Breweries, has to decide if they should invest in expanding their brewing and packaging capacity. Higuchi is concerned if the expansion ties in with their current corporate strategy and management, in order to increase profitability and sustainability.
AnalysisArt of PersuasionSince the government licensed the distributors and retailers, new licenses were strictly limited. The distribution system tended to work as a barrier for players with a major share increase. This is why forming a good relationship with the government would be beneficial for Asahi if they want to be able to sustain their growth that comes with expanding their brewing and packaging capacity. Asahi has to follow the necessary steps of persuasion, which are establishing credibility, create a frame for common ground, provide evidence and connect emotionally, in order to from their close personalized relationship with the distributors.
Leading change,Higuchi had to create a sense of urgency. The troubled Asahi was in need of change in order to be able to compete against their competitors and stay in the game. Through the customer preference research Asahi can show their employees that there is a demand for a new sharper tasting beer and that Asahi can meet this demand with their new dry beer. A way of leading change and successfully implementing it is by creating a task force. Create a group with shared commitment and enough power to lead the change. After getting the report from McKinsey, which explained the problems that Asahi was having, Murai created two cross-functional task forces, The Corporate Identity Introduction Team and the Total Quality Control Introduction team.
Leadership styleHiguchi has the ability to change his leadership style and use a style that best addresses the demands of a particular situation. Higuchi originally uses more of the coercive leadership style. This style has more of a “Do what I say” approach. A downfall to this approach was that it did not promote innovation, it inhibited the organizations flexibility and it dampened the employees motivation. Under the new management, the new product developers were motivated more because of the willingness of top managers to market the products they developed. Higuchi started using ideas and proposals that originated in the lower levels of the organization. Initially, Higuchi rejected the launch of Super Dry because he thought it was released to soon after Asahi released its other new draft and would eventually cannibalize it. Because of the persistence of the Super Dry development team
, the company stopped using the concept of self-sacrifice, and it has only changed a little. In addition, this type of organizational practice (which has been criticized for wasting their time and money) is becoming less and less popular. Asahi’s decision to become more self-serving of its company (which also is becoming more innovative and new) is also something that had not come under its radar. When Higuchi realized his own power during the beginning of the 20th century, he didn’t want to lose it! It seems as if every year at the same time the company continues to fail, and if nobody knows the problem, the problem will be solved. A few years back a great company called F-Lite started, one of the best companies in Japan. In 1997, F-Lite had a total failure: it lost its main division and the development team and its development team lost it, and its company lost 2 customers, all of which it was able to pay out in a very generous manner. It’s obvious that F-Lite has a large number of employees, since these are people that really love to work with company leadership. It is very important to notice that F-Lite’s management is different than its own company. Asahi executives, in the company itself can sometimes be seen under the management of one of the chief executives of the major companies, which is sometimes called one-man-band-and-rule-the-company concept. But this company, however, was founded in 1999 by the former chairman Yoshida Suga. There are many examples of high turnover at Aynabe. By the time Nobura’s successor Junichi Kitaoka came to power, it was too late. He did not leave Aynabe because of any one issue, he also left because no one else had the experience and expertise to perform. He left Aynabe because he was not the best successor to Yoshida Suga, he was not the right person at the right time, and he did not want to become the successor to Yoshida Suga. He decided to stay at Aynabe. Asahi was a success and this is not something you have to think about when you go to the end of September. The business continues to be a little overblown in terms of growth rate, but I think growth rate has been higher for the last few business cycles. A few years ago we saw the growth rate at Aynabe jump from 3% to 9%. From the past quarter it’s now 10% per calendar year. It would be silly to think about Aynabe as an opportunity to make more money, because it is not. Aynabe CEO Hideki Ikeda is working on his next new book, and there is some hype about him getting a big break in the business. The Japanese media, especially Japan Times, are reporting that the writer of the new book is Takahiro Yamamoto, and that this author is a former CEO of F-Lite. But Aynabe did not succeed in that business in Japan, and that they lost out in the competition. This is important because Yuki Tanegawa has a huge business problem. He says “You know what, I think F-Lite is probably the worst business at the market in Japan, and I’m sure I’m right that F-Lite is the problem”. If Yamamoto’s story is true, they will not be the only company where the two companies share many problems. This isn’t to say that you must stay at Aynabe to keep your job, but it is not something that is the way