Asahi Glass Company:Strategy

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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…show more content…
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.
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