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Kirin Brewery

In: Business and Management

Submitted By anwarbizri
Words 654
Pages 3
Anwar Bizri Kirin Brewery Co. Ltd. (A) 14/09/2015

As Japanese beer market is an oligopoly with four major players, any competitive confrontation, or any new product entry, would make ripple effects on the market shares of the other 3 players. Although Kirin had the dominant share of the beer market, its conservative approach to its product strategy left it vulnerable to innovative strategies by the other players. This, in turn, is the opportunity that Asahi took advantage of. Asahi created a niche demand for “dry beer” wherein it had the competitive advantage of first-mover. Asahi realized a shift in the market demographics towards the youth and took this as an opportunity to revitalize the beer market and seize as much of the market share as they could in the time it took the other players to respond.
In light of Asahi’s challenge and the context of its strategy, Kirin had several alternative responses to consider. The simplest response would seem to be launching its own version of Kirin dry beer and mitigating the loss of market share to Asahi. However, as Asahi now has the advantage of “dry beer” brand recognition, an introduction of Kirin “dry beer” might lead indirectly to an increase in Asahi’s market share. Therefore, a introducing a parallel dry beer product is necessary but not sufficient as a strategy and must be supported by other responses.
Kirin could cut the price in the classic competitive battle response. It could do so because it can afford a price cute due to the recent appreciation of the yen. Kirin is the price setter in the market, and so Asahi would have to follow the price cut to maintain demand for its dry beer. Citing the yen appreciation, the price cut would not leave room for doubt in Kirin’s brand image, or the consumer to feel he had been cheated by the previous higher price.
As Kirin has been the market leader, its original lager brand is highly recognized as a premium brand. However, consumers are taken by the new “dry beer” fad and might need to be reminded of the superiority and good taste/quality of lager beer. Therefore, in parallel with a new dry beer, Kirin could reinforce its mainline lager with more focused packaging. For example, it could change the packaging to keep the same main design and color scheme, but write lager in a bigger, “cooler”, and different font. It could also rewrite its brand “story” on the back label to emphasize the history and superiority of the lager.
Keeping in mind Kirin’s superior distribution channel operations, and its capacity to finance more advertising and promotional strategies than its competitors, it is also viable for Kirin to launch other new products to counter-act Asahi’s re-segmentation of the market with a whole new re-segmentation of its own. Kirin could launch Kirin Fine Pilsner which is ready to be launched. Kirin could create premium value for its fine pilsner through advertisements. These adverts, for example, could suggest a link between a premium superior lifestyle and the Kirin Fine Pilsner, hence giving the pilsner an aspirational value.
In conclusion, Kirin’s bigger resources and better distribution capabilities allow it to respond to Asahi’s new product and regain lost market share on several levels. It should start by introducing its own dry beer to stop the bleeding in market share. It should then cut the price of its mainline products and force other competitors to incur losses that would be much more damaging to them than to Kirin. After that, it will introduce a new line of Fine Pilsner and simultaneously reinforce its original lager. By that, Kirin will have re-segmented the market, it will be present to battle Asahi in dry beer segment, will have reinforced its superiority in the lager segment, and will have gained a whole new competitive advantage in the pilsner segment.…...

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