1. Asahi Glass Company has diversified through internal growth, acquisition, and joint ventures from its origin in flat glass to broad glass-materials, chemical, and electronics manufacturer. It has also vertically integrated and expanded internally to become the leading global glass manufacturer. In 1993, Asahi Glass is reviewing its future direction, particularly whether it should divest its electronics business.
New Product Opportunities
New Glass The glass industry is the cash cow for Asahi. Although earlier the industry was designated as a mature business, industry observers viewed the future of the new glass business as rosy, expecting it to reach $20 billion by the turn of the century. Flat glass could be viewed as the company's
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Asahi started its dawn with the glass business where lies its core competency.
New Glass & Chemical This is an emerging business and Asahi cannot afford to miss this opportunity. Under the leadership of chairman Furumoto, the company had established Fine Glass division in '85 and New Glass Research lab in '88. At the same time, Asahi has become a leader in a number of specialty product markets, and secured a unique position in the domestic chemical industry. Infact in 1992, 56% of Asahi Glass's sales came from glass and 30% from chemicals. Any expansion in glass and chemicals, the chief cash cows, is prudent and judicious.
Electronics Asahi entered the electronics business because of its growth potential. Their joint venture with Mitsubishi led them to be the second largest manufacturer of LCDs. This was because Asahi had the relevant raw material expertise on displays and components for ICs. It was also increasing production rapidly and was strongly positioned in the market. Asahi-Komag's thin film magnetic memory was also well accepted in the market. Expansion opportunity in areas where Asahi has the necessary know-how like LCD panels is certainly prudent and logical. Electronics is not entirely a misfit in Asahi's core business. However Asahi does not add any value to this business as such and should avoid, any major expansion spree.
Therefore this industry is a pretty good one to already be in, but would be very tough to try and break into. Since established firms do not have to worry about threat of entrants or substitution, they can focus on making their core business practices cost efficient and profitable. Although firms have to deal with high buyer and supplier power, every firm has to deal with these issues. Therefore this leaves only rivalry to compete on, which forces firms to stay sharp, observe the competition, and provide excellent service to the firm’s customers to generate profit.
I think that if GE stays the course with innovative, ground breaking technology and development, investing in greener more efficient materials and
The Corning Glass Company many product developments throughout the 1950s, 1960s, and 1970s. During that time they always had been a leader in the arena of glass and ceramic products. Corning Glass Company focused on commercial products until the 1960s when it entered the consumer market. One of Corning’s exceptional technologies in this market was Z-Glass. After several successful years of producing Z-Glass at the Harrisburg plant,
Newell's corporate strategy was mainly focused on high volume and low cost product to large mass retailer. The goal of the company was to increase its sales and profitability by offering a complete and complementary range of products and reliable service to the mass retail stores. Newell's initial focus was on home and hardware products which later on expended to other markets. The company strategy was to grow and expand its product line through acquisitions, rather than internal growth. Before 1998 Newell acquired different companies in the basic home and hardware products industry and started diversifying into unrelated field such as children products, widow covering, writing instruments and others. The company was also looking to
computer hardware sector. The company has a high brand value in the market due to its cost
After acquiring, Newell would get the service level of each business to their standards as fast as possible to make sure that these businesses do not damage its reputation. Thus association of brand name to Newell highly enhanced the individual companies inside Newell’s portfolio to be of good service and fast distribution. Other than these factors, the acquisition of different companies might bring in different skills and synergies to complementing goods such as production knowledge and complementary assets. Companies that produce complementary products are able to know what exactly to produce that would suit their customers, while companies producing differentiated products of the same category would be able to learn from each other to produce better products for each customer segment. Companies of similar nature are also consolidated and the plants upgraded to increase manufacturing efficiency which will benefit these companies in the cost aspect.
Evaluation of mentioned alternatives will be conducted from mainly five aspects: transportation costs, average inventory levels, time responsiveness, fill rates and finally additional costs and benefits.
LE is known for its high quality products and its technical innovations. On its 60 years of international experience, the company gained valuable knowledge on what to do and what to avoid when moving abroad, and that is why they refocused their expansion strategy into joint ventures, instead of acquisitions avoiding the
Scientific Glass (SG) provides specialized glassware for a variety of organizations such as pharmaceutical companies, hospitals, research labs, quality-control sites and testing facilities. As of January 2010, there was a substantial increase in their inventory balances which tied up the capital necessary for further investment needed for expansion. The debt-to-capital ratio surpassed the target of 40% preventing the company to use their capital in other areas. In addition, the shipping costs were rising, competitive pressures were accelerating, and certain markets in North America and Europe were becoming saturated which underscored the necessity for capital investment
Matsushita did this by closing its fax machine factory in Germany, and closing its microwave oven subsidiary and air-compressor factory in the U.S. Matsushita also asked for more than 10,000 Japanese employees in its manufacturing sector to retire early and all of these closed businesses and cancelled job positions were moved to China. Matsushita’s establishing of the new “brain” in China, or Matsushita Electric R&D Center in Beijing, China, was the company’s second largest of 16 R&D centers around the world. Matsushita’s chairman, Yoichi Morishita said “it was too difficult to explain everything about China to Japanese designers; to really make use of China’s special competitive advantages and to really meet Chinese customers’ demands, Matsushita decided to hand over its China-related development and research issues to local researchers and engineers.” Matsushita decided to localize material supplies and use as many Chinese suppliers as possible for its operations in China because there are several material distribution and trade centers in China that provide steel, paint, hardware, etc. all functioning with a mechanism similar to that of the polystyrene distribution and trade centers. The fourth fundamental change in Matsushita’s new supply chain, Stretch the distribution link, Matsushita selected TCL, the largest TV producer in China, as its strategic partner to stretch its supply chain to Chinese rural and inland markets. With
As we all known, Sony and Matsushita are two of the largest consumer electronic makers in Japan or even in the world. And in this reading, it points out the different strategies Sony and Matsushita use when they were facing the fierce competition in China ----- Matushita was accelerating its pace on stretching the supply chain in China while Sony unexpectedly decided to shift some of its manufacturing business in China back to Japan. In this article, I will discuss the reasons that lead them to make different decision as well as analysize the advantages and the disadvantages of their decision.
Hirotaro Higuchi, became CEO of Asahi Breweries in 1986. His primary focus was to increase profit by incorporating a top down, decision- making management approach. Through efforts of enhancing the company’s functionally, Higuchi was prepared to disburse the necessary
However, during the "Dry War" initiated by its competitors, Asahi was only able to supply 70% of the orders placed in the summer of 1988. This caused not only lost sales, but also failure to match distributors ' expectations of the firm, thus threatening the firm 's leadership position in the sector. With the expansion plan, Asahi would be able to satisfy demands in a fast increasing sector.
In the end of 2004, Haier, China's number one company and a leader in white goods market segment, had almost $15 billion in sales revenue and a growing presence in black/brown goods sector. Haier followed a distinct expansion strategy, entering developed markets in Europe and USA, at first as a niche player, and penetrating markets in Southeast Asia afterwards. Haier pursued a very aggressive globalization strategy and entered the Australian and New Zealand Markets in 2002. They diversified the production capacities, manufacturing goods for Asian and Middle Eastern markets at their plant in Pakistan, while the products for American market were produced in USA and even had ‘Made in US’ sign in order to make connections with strongly patriotic US customers. So, by 2005 Haier has achieved globe recognition, establishing its presence across all continents.
This report examines provides a comprehensive summary of the threats and opportunities for Fonterra to expand its operations into a new market within Japan.