3. 1.0 Executive Summary
Asahi Breweries Company was founded in 1889, and is situated
in Sumida, Tokyo, Japan. Asahi meaning “Morning Sun” and the
name of the beer rather than the brewery has become Japans
numbersellingbeer(Wade, 2008).
Branching out, Asahi has established itself as a quality beer
maker and has offices in 19 locations worldwide. The most
popular of all the Asahi brands is the Super Dry Label which was
first introduced in the late eighties. The sudden quench for dry
beer has seen a rapid increase in Asahi’s business profits,
( Horoyuki, 2011)had reported a net profit of $645 million.
Besides selling beer, Asahi also operates in three other segments
(Manufactures non-alcoholic beverages, wine, whiskies, liquor,
food & medical) Asahi also specialise in management of buildings,
restaurants,wholesale and otherproductive business activities.
The scope of this report identifies key information and issues that
(Asahi Breweries, Ltd) may face penetrating Brazils emerging
market. From a “SWOT Analysis” we assess its potential and
possible advantages it may have within the target area.
Cultural, Political, and legal issues are analysed and how Asahi
will overcome these hurdles.
Mode of entry, market strategies, competition and perceived
success for the future are all important aspects to plan before its
starting process. Financial issues are also a key part of the
strategic plan.
In conclusion, we analyse its future success and its period of stay
within the Brazilian market. Critical issues need to be addressed
and a contingency plan put in place.
p.3
4. 2.0 Situation Analysis
Asahi breweries Ltd, has become a major player in today’s
emerging markets. With offices and affiliates globally, Asahi’s
wealth of international experience and financial backing should
provide the company with positive results. Being the number two
brewers in Japan, and producing a variety of alcoholic and
non-alcoholic beverages, its potential to develop a niche within
the Brazilian market would increase its profitability and company
recognition. Overseas sales probably accounted for 6.8% of
revenue in 2010 (Takayuki,2011)
2.1 Market Summary
“The Asahi Breweries Group aims to satisfy its clients with the
highest level of quality and satisfaction, while promoting healthy
living and the enrichmentof society worldwide”CompanyPolicy,
The company is aiming to branch out and do whatever it takes to
acquire or form an alliance with international corporations (CSR,
2007)a thirst for innovation.
2.2 Target country
-Target country for entry is, Brazil
-Emergingmarket (Ranked within the top 5)
-Population(190 Million)
-Fifth largest market globally (Seventh largest by nominal GDP)
-Annual GDP Growth rate of 5%
-Currency (R$-Real)1 Brazilian real = 4.29152JPY
-Natural resources (Agriculture, Energy, Iron ore, gas & oil
research)
-Asian trading partners account for (18.9%)
-Mergers and Acquisitions between 1993 and 2010 (7.012, $707
billion US) (Wiki
p.4
5. 3.0 Market Trends that will shape Brazil
- Consolidation of smaller firms (Local companies turning to
mergers or acquisitions (M&A) for survival and to secure a
powerful niche within the emergingmarket.
-Manufacturing base for South America (Abundant amount of
natural resources and modern technology facilities)
-Robust Economy (With the next soccer world cup in 2014 and the
2016 Olympic games, Brazil’s economy is ready to improve its
infrastructure, business outlets, tele-communications and create
employment)
-Population of Brazil’s domestic market (With a population of
190,000 million and its rapid growth, MNCs would be insane not
to penetrate this growingmarket.
-Wider Credit Card Availability (50% of Brazils population do not
have a credit card. Retail outlets, banks and other consumer
organizations are gearing up for this, in anticipation of the two
majorsporting events to be held.
-Eco-friendly co-operation (Companies looking to establish a base
in this emerging market must meet consumer and government
eco-friendlystandards or be rejected)
Mergers and Acquisitions (June 2009 - June 2010)
Date Industry Acquirer Target Result
June
2009
Electronics
Retail
Pão de
Açúcar
(Largest
local
competitor
to
70% of
Ponto Frio
Makes Pão de
Açúcar key
segment leader,
with 1,200
stores and
US$ 15 billion in
6. Carrefour,
Wal-Mart)
yearly revenues
Decemb
er 2009
Electronics
Retail
Pão de
Açúcar
Casas
Bahia
Adds 500+
stores to Pão de
Açúcar, which is
now present in
337 cities in
Brazil, with
close to US$ 10
billion (2008) in
sales, mainly in
furniture and
electronics
May
2010
Electronics
Retail
Ricardo
Eletro and
Insinuante
Merger of
Ricardo
Eletro and
Insinuante
Forms a
480-store player
with US$ 2.7
billion in annual
sales
June
2010
Drugstores Drogaria
São Paulo
Drogão Makes Drogaria
São Paulo the
largest
drugstore chain
in Brazil, with
US$ 1.5 billion
in annual sales
June
2010
Electronics
Retail
Ricardo
Eletro and
Insinuante
City Lar Adds 170 stores
to the Ricardo
Eletro and
(Latin America, 2010) p.5
7. 3.1 Mode of Entry
Entry mode through an existing brewer (Joint-venture, minimum
amount of investment, cultural awareness, customer market base
and network, logistics in place, and possible future acquisition of
the partner company)
3.2 Market Strategy
Penetrating Brazils emerging market and entering through
joint-venture would help boost Asahi’s international sales and
increase its recognition within the market. A stepping stone for
future development and great potential for Asahi to branch out to
neighbouring countries. Promotion of its products and highly
advanced qualitycontrol methods.
4.0 Asahi SWOT Analyses
-Strengths (International experience, Quality products, Quality
control, advanced technology, potential for growth in emerging
markets, company history, working towards innovative and
eco-friendly products, independent entity, safety and environment
responsibility,relies on customer satisfaction)
-Weaknesses (Operating in unfamiliar territory, cultural
understanding, legal and bureaucratic difficulties, structural
barriers, language communication)
-Opportunities (Potential profit, company recognition, expansion,
knowledge of the local market, future acquisition of a local
company, cultural awareness, branch out and move to
neighbouringmarkets)
-Threats (Rival companies, corruption, economy crisis, inflation,
dilution of control, discrimination,political and legal issues)
p.6
8. 5.0 Competition (Local brewing companies seem to be limited in
Brazil as there are only a handful of brewers listed on the internet.
Competition for Asahi’s penetration could be met with minimal
fuss. Major competitors from North America may pose a potential
risk and heighten global friction)
(Brazilian Alcohol Companies Listed,2011)
-Agrivale Sa Inc Brazil
-Ethanol Brazil
-Vital Commodities Imp.Ltd.Brazil
-Turuna AtacadoFerragens E Ferramentas Ltda.Brazil
-Alleandra Comerico Imp.Exp.Brazil
-Warm Industria E Comerico De Marquinas Ltd.
5.1 Critical Issues (Political and legal issues, cultural and
structural barriers, financial risk evaluation, corruption,
knowledge spill overs, taxation, infrastructure, partnership
length, acquisition, profit loss, unstable economy-inflation,
dilution of control and trust)
6.0 Product offerings (Asahi homepage)
-Beer (Asahi Super Dry, Asahi Black, Premium label, Green label)
-Whisky (Pure Malt, Single Malt, Black Nikka)
-Japanese Sake or Rice wine ( Kanoka,Satsuma,Tuskasa)
-Cocktail ( Asahi cocktail partner)
-Non-Alcoholic ( Asahi W-Zero, soft drinks and juices, coffees,
mineral water, health drinks and supplements,green tea)
-Baby food products
-Medical products
7.0 Financial objectives (To work in a friendly, profitable
environment and expand its business opportunities globally.
Invest in local companies to produce innovative and rewarding
products. Gain a piece of the market share and grow from within.
p.7
9. 8.0 Market Research (Local Customer survey targeting bars,
restaurants, hotels, and other institutions-R&D) Promotional
campaigns through Partner Company.
8.1 Contingency Plan for smooth operations
-Mode of entry (joint-venture) other forms of entry (acquisition,
merger or alliance)
-Cultural, political, legal, and structural problems. (Working with
local partner to alleviate major issues) Working with local legal
agencies to prevent majorcomplications.
-Joint-venture trust (Regular meetings to discuss critical issues,
open information and data report) Local operations to be
structured in line with both partners. Key issues to be discussed
in regards to ownership, length of partnership, technology
transfer, pricing, market share, financial issues, goals and
capabilities (QuickMBA,2010)
-Perceived profit (daily, weekly, monthly sales projections,
customersurvey reports)
-Competitive advantage (Innovate products, customer satisfaction,
qualityproduced products, competitive price, companyhistory)
-Reasons for success (International experience, wide range of
products and services, superior technology and quality control,
positive outlook for future merger or acquisition, Brazils wealth of
raw materials and growing market)
9.0 Conclusion
With Asahi’s proven track record domestically and internationally,
its entry into the Brazilian market would be of great significance
and very rewarding. Brazil’s emerging market and its abundance
of raw materials make it a very lucrative market. P.8
10. References
Brazilian Alcohol companieslisted,2011.Available onlinefrom:
http://www.list-of-companies.org/Brazil/Food_Beverage/Alcohol/
(Accessed:23/10/2011)
(CSR, 2011) Asahi Beer Homepage, Japan. Available online from
(Japanese only) http://www.asahibeer.co.jp/csr/ (Accessed:
24/11/2011)
By Hiroyuki Kachi, Feb-8, 2011. The Wall street Journal.
Availableonline from:
http://www.asahibeer.co.jp/ (Accessed:23/10/2011)
By Latin America Today-July 6, 2010.Availableonline from:
http://www.globalintelligence.com/insights-analysis/bulletins/six-t
rends-that-will-shape-brazil-s-consumer-and-r(Accessed:
23/10/2011)
QucikMBA,2010. Available online from:
http://www.quickmba.com/strategy/global/marketentry
(Accessed:23/10/2011)
By Rodger Wade. August 19, 2008. Bootsnall, Bestselling Beers
Worldwide.Available onlinefrom:
http://www.bootsnall.com/articles/08-08/best-selling-beers-around
-the-world.html (Accessed:23/10/2011)
By Bloomberg Business Week, Jan 6, 2011. (Takayuki Tanaka,
2010)Availableonline from:
http://www.businessweek.com/news/2011-01-06/asahi-breweries-
will-aggressively-seek-acquisitions.html (Accessed: 24/10/2011)
Wikipedia,2011.Availableonline from:
http://en.wikipedia.org/wiki/Economy_of_Brazil(Accessed
(Accessed:24/10/2011)
