Asahi Breweries, Ltd Case Solution
The firm will be competitive if it operated at roughly 93 percent capacity and had a market share of around 30.3 percent, with a growth rate of around 7 percent to achieve profit and extra capacity to fulfill the growing demand from consumers in the dry bear category.The firm requires to reclaim market share by distinguishing its offerings from its existing product line and establishing a distinct position for the Dry bear in the market, resulting in improved profits and gaining market share.
After looking at the financial performance of Asahi such as a huge increase in shareholder’s equity value in the balance sheet,a large increase in gross profit, net profit, and also increase in retained earnings and other factors, we look the next step for the company is an expansion incapacity to meet the increasing customer demand that is served by other competitors just because of lack of capacity.
For retaining the previous and current achievements and gaining future performance and opportunities highly depending on the investment plan proposal acceptance or rejections. Because through these investment plans company would be able to grow its manufacturing capacities and resources. The CEO of Asahi Breweries should accept this proposal because the long-term performance, benefits, and also growth opportunities are huge, not only this the risk factor is also very low. As the finance director of the firm estimated that the risk of cash flows is very low because the performance of the company’s stock is good, along with this the effective contribution of the Sumitomo Bank in the financial position of Asahi is reducing the risk.
The strong point is that the risk is very low, when any company is proposed with a growth plan with low risk is the rare opportunity that knocks on the company’s door. Rejecting such opportunities will lead the company toward the downside of existing operations in the future because maintaining current position and for survival in the competitive environment every company needs to exploit forthcoming opportunities. Because of the big competition in the market, the company such as Asahi should take these steps for survival. A good investment plan doesn’t need to always lead toward success, the proper implementation of the plan is necessary. Following are good strategies and areas of strength for the success of this proposed investment plan.
Through an effective supply chain network and production company could achieve the expected market share. The supply chain network would be improved and will work effectively if a firm will work closely with major network partners such as large retailers and wholesalers that will promote the products of Asahi breweries. The company should contract with distributors, and supply several products to meet their expectations. Because of the low capacity, the relationship with distributors has been spoiled, this does not affect the sales of the company but only creates conflicts with distributors, which can result in decreasing sales in the future.
The company should also focus on its other factors related to the stakeholders, such as: customers’ demand, shareholders’ expectations about value creation, and so on.The company canretain its market share by focusing on specific segments and by looking to expand through various branding methods, which will result in profit……………………….
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