KIRIN BREWERY COMPANY LTD: THE DRY BEER WAR Case Solution
Diagnosis of Problem (Question 1)
The Japanese beer market is dominated by four brewery companies, which are Kirin Brewery Company, Asahi, Sapporo and Suntory. Each of these four beer companies had the same share of the market in Japan until after Kirin had started to acquire more market share. Phenomenal growth has been shown by Kirin and the company had captured market share of more than 60% between the 1970s and the mid 1980s. However, after the launch of Super Dry by Asahi in the year 1987, it had began to grab a larger share of the market and this had increased the level of the competition among the top four breweries and results in a war among them based on new product development and pricing.
When Kirin had launched its own dry beer product in response to the Super Dry of Asahi, Sapporo and Suntory had also launched their own dry beers. By the early autumn in the year 1987, the dry beer market had expanded significantly and Asahi was selling around half of the beer in Japan. Kazuhisa Tani had met the corporate planning and the marketing departments of the company in 1988 and all were asked to put forward their proposals for the new products. This was because all the four major brewers in Japan were taking the advantage of the turbulent environment, which had been created by the dry war. The consumers in Japan now had a wide range of beer choices.
The Super dry had been a big success and the dry war had fascinated all the Japanese consumers where they had become more interested in reading newspapers and daily articles about the launch of the new products by these companies and their battle for the market shares. Therefore, Kirin might not have succeeded in the dry war and sustain its market share but it needed to formulate a new marketing strategy for the 1989 beer season. Motoyama, the owner of the company had several options to achieve this however; detailed analysis of each option needs to be performed before a final decision is made.
Kirin’s Relative Position in Japanese Market Place (Question 2)
In order to analyze the detailed position of Kirin Brewery Company in the Japanese market we are performing a detailed SWOT analysis to analyze the internal and external environment of the company. This is discussed below:
Kirin Brewery is the top Brewer in Japan and it is the fourth largest brewer in the world after Miller and Anheuser Busch. The company has established the management tenets, which will guide the company after 80 years, which is to focus on quality first and sound management thereafter. Another key strength of the company is its brand value and the brand awareness. Beer in Japan means Kirin. The company has the largest share of the beer market in Japan as shown in exhibit 1 and 2 in the appendices.
Kirin had also diversified its operations around the world into different markets. The company had established a number of joint ventures with a number of other brewery companies in USA, Australia, and Netherlands etc. The company has followed unrelated diversification into a number of other areas such as biotechnology, whisky, dairy products and soft drinks. The company has been generating higher revenues under the guidance of Tani, which had been appointed by the president of the company.
The company has a wide sales network around Japan and the company had started to monitor the market share more closely by developing the Kirin intelligence and communication. Kirin is also the first brewer company, which had started to offer line of computers called as KN line to its retailers around Japan in 1985. This has improved the monitoring of the operations and the sales trends of the competitors. It also had strong agreements with 70% of the exclusive wholesalers in Japan. Cleary, Kirin is a strong company and one of the biggest in Japan.
The company does not emphasize much on advertising activities and promotional activities as compared to other brewers in Japan such as Asahi Company. Exhibit 3 in the appendix shows the growth in the marketing expenditures, which is highest for Asahi Company probably due to the marketing of it, Super Dry beer in Japan. Kirin does not spend more on advertising its products and Asahi spends more than double of Kirin on its marketing expenditures..................
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