Kirin : Business Strategies for the Japanese Beer Market

Some scholars argue that Japanese companies show excellence in developing operational effectiveness but rarely have strategies (e.g., Porter, 1996). One reason might be the persistent mindset (especially among large companies), formed during Japan's rapid growth period, which prioritized the pursuit of effective production and broad distribution of products to fully realize market growth, rather than adopting a distinct competitive strategy. Although the Japanese economy has been stagnant for more than two decades, the above-described mindset remains deeply embedded in the guise of "continuous improvement" or "customers are everything"-strategies that are still found across many Japanese industries. Another reason for the lack of strategies relates to the fact that, during the economic stagnation, an increasing number of companies have diversified their business portfolio in the search for new growth opportunities overseas. While globalization itself is a reasonable option-even inevitable for some industries-implementing such a corporate strategy can lead some companies to vague business strategies. Moving into another industry can make management even more complicated (Markides, 1999), requiring that the strategy of each business must be given considerable attention when a firm embarks on globalization. This thesis explores Kirin's strategy for its Japanese beer business based on the factors described above. Although each player in the beer business worked hard to improve its product development and customer-facing skills in order to survive in a market that has been in decline for the past nearly twenty years, in the end every player competes fiercely for the same customers while offering similar products in the same fields. Ironically, this homogeneous effort maintains commoditization of the entire market over the long run. Product strategies or operational improvements are not enough to move away from this conundrum; Kirin needs a new business strategy, immediately. Therefore, the aim of this thesis is to explore what distinct strategic position(s) Kirin should adopt and what type of organizational system it should develop in the future. Through my analysis of Kirin using strategic frameworks and case studies, I found that Kirin has managed to survive the competition so far, cultivating many and varied capabilities in response to external changes. However, to deal with possible mid-and long-term changes in the beer market and the business model currently in place, Kirin has to review its strategic position and reform its organizational environment to focus on the development of new capabilities. Note: The views expressed in this thesis are solely my own and …