Kirin Brewery Co.: In Search of a Growth Strategy (Case #14, Notes)
Overview
Mr. Kato, the president and CEO of Kirin Brewery Company, one of Japan's largest producers of alcoholic beverages, must determine a strategic direction for the company in the face of market changes. After decades as the leading brewer in Japan, Kirin was recently passed by rival Asahi. Polarization in the Japanese beer market is taking place, as sales of high-end and low-end products are growing, but overall consumption is falling with the decline in standard lager sales. Total sales of alcoholic drinks are also falling, but sales in certain categories, such as cocktails, have been on the rise. Products with increasing sales have distribution channels less dominated by specialist retailers.
The Japanese population is both declining and aging, and growing concerns about health and drunk driving have further curtailed alcohol consumption. New products are more heath-oriented and include features targeting young adults and women. Domestic competition is fierce and controlled by the four largest brewers in Japan: Kirin, Asahi, Suntory, and Sapporo. The companies are using mergers and alliances with foreign brewers to expand both domestically and abroad. Kirin seeks to have 30% of its revenue come from international sales by 2015 and has been investing in large foreign markets.
Discussion Questions
1. What trends are currently taking place in Japan for the 4 P's of marketing?
2. What are the current trends among Japan's population? Have Kirin's responses to these trends been appropriate? Why or why not?
3. Given all of the trends in Japan, what domestic strategies do you recommend for Kirin?
4. What international strategies do you recommend for Kirin at this time?