Professor Kikunae Ikeda
Introduction Incorporated in 1961 HQ - Jala Jalan n Kuch Kuchai ai Lama Lama,, Peta Petali ling ng,, Kual Kualaa Lump Lumpur ur Type of business business - flavor enhancer, enhancer, and seasoning manufacturer Type of products ± AJI-NO-MOTO, VONO, TUMIX, SERI-AJI and etc. Main compe competito titors rs ± Maggi, Maggi, VEDAN, VEDAN, and CAMPBELL
A. General External Environment Demographic
Economic Political/Legal
The target customers of Ajinomoto: Housewife, Chefs & Restaurants Holding almost 80% market share in Malaysia SALAM (System Ajinomoto Lindungi Alam Msia) ASQUA (Ajinomoto System of Quality Assurance)
Sociocultural
Produce product that are suitable for every culture races in Malaysia
Technology
Ajinomoto (M) conducted thorough studies and finally selected FlexProcess
Physical Environment
Follow the Eco-Guidelines of the Eco-Index for Container and Packaging to conserve the environment
B. Industry Analysis (Porter¶s 5 forces) Threat of New Entrants Bargaining Power of Suppliers
Low, due to high entry barriers and involve large capital
Low, as Ajinomoto itself owns plantation that can produce itself
Bargaining Power of Buyers
Low, as seasoning price are standardized Only few brands to choose on
Threat of Substitute Products
High, seasoning product are not necessary Can be replaced by salt or sugar
Rivalry Among Competing Firms
Average, as Ajinomoto already a market leader Well established brand and strong reputation
C. Internal Environment Analysis Resources Tangible resources Organizational and technological Intangible resources Human resources and Reputational resources
Technological NEC¶s FlexProcess is an ERP solution designed specifically for the process industries and helps to build an information system that streamlines business processes, reduce TCO (Total Cost of Ownership), and adapts to changing business environments.
Chairman,
Independent Non-Executive Director General Tan Sri (Dr.) Dato Paduka Mohamed Hashim Bin Mohd. Ali (Rtd) 75 years of age - Malaysian
Chief
Executive Officer, Managing Director Hiroshi Amano - 49 years of age - Japanese
Non-Independent Non-Executive Director Adinan Bin Husin - 64 years of age - Malaysian
Human Resources ISO 14001 awareness briefing
Team Building Program
Reputational Resources
"HALAL" Certification
Quality Management System
Food Safety Programme
C. The Firm¶s Capabilities Human Resources
Have enough potential employees to achieve the company mission and vision Foster world-class human resources have been implemented Fair Employment for All Initiatives for Labor-Management and Human Rights -create rewarding work environment -labor-management council meetings to assess labor conditions
C. The Firm¶s Capabilities (Cont¶d) Research and development
Strong ERP solution- Flex Process
- Help to solve difficult to manually plan production. (because more than 100 products) - More accurate information on inventory level and the actual production situation and status - Efficiency management
Using new bio-science and fine-chemical healthcare technologies and improve development in low fat, low sugar production.
VRIO
Analysis
Is the resource or capability Valuable?
Yes
Is the resource or capability Rare?
Yes
Is the resource or capability costly to imitate? Yes
Is the resource of capability Nonsubstitutable?
Yes/No
Competitive
Performance consequences implications
Sustainable competitive advantage
Valuable
- because Ajinomoto (M) ensure strict quality assurance from raw material procurement. - all products are qualified under Ajinomoto System of Quality Assurance (ASQUA)
Rare - because It is the only company that provided seasoning products. - less rivalry business that can be competed in this industry
Costly to imitate - has strong capabilities on its human resources and also research and development. - foster world-class human resources - high technologies skills and strong experiences (large capital enquire) Non
substitutable - yes - because it is the only company that provide seasoning in Malaysia. - no - because people might look for natural species such as salt, sugar. - people might have a mind set that seasoning can cause unhealthy effect
Aboveaverage return
- NECs Flex Process as an E RP solution - Reduce total cost of ownership - Improve production planning and inventory management
Firm infrastructure
Human Resource Management
- Recruit qualified people - Provide intensive training program to employees - Trust on employee and a fair employment for all
Technology Development
- Adopting Flex Process to strengthen production - More precise information pertaining to inventories - Improving nutrition by making food more delicious - Procurement raw material from local and also foreign country - Take advantage of buying in advance and in bulk - Procures the equipment from domestic manufacturers
Procurement
Inbound logistics *
Raw material from Cameron Highland and Indonesia *Secure a stable supply of highquality raw materials
Operations *
Process the raw material and packaging *Quality control * Uses flex process to control its inventory level of production
Outbound Logistic *
Distribute finished goods locally and also export *Endeavor to reduce environmental impacts during transportation
Marketing and Sales *
Deliver products in easy to understand packaging. *Advertising through television * invited celebrity chef conduct cooking demonstration
After Sales Service *
Customer helpline *Promptly reply to inquiries and feedback *Online cooking class with recipe
D. Business Level Strategy Analysis Cost leadership High-earnings structure
Reducing the cost
Nucleotides and amino acids
Increase efficiency and flexibility
NEC·s FlexProcess (logistics and production)
E.
Competitive Environment Analysis (i) Competitor Analysis
Market commonality
Resources similarity
MAGGI and VEDAN, Flavor enhancers market and seasoning market C AMPBELL
MAGGI strong parents company resources similarity such as technological knowledge, experience, and expertise
E.
Competitive Environment Analysis (ii) Interfirm Rivalry
Likelihood of Attack (i) Organizational Size Ajinomoto (M) Market position, capability, and volume of business to achieve economic of scale Offer attractive pricing to gain enhanced market shares Maintain profitability of the firm
(ii) Quality Quality of product is of prime importance to the firm Quality audits ISO 9001: 2000 ´Hazard Analysis and Critical Control Pointµ (HACCP)
Likelihood of Response
(i) Reputation
Responsive Key players in the market Predict the com etitor·s likelihood
(ii) Dependence on the Market
Monosodium glutamate products Strongly dependent on the market Stron res onse
E.
Competitive Environment Analysis (iii) Competitive Dynamics
standard-cycle market Intense competition Ajinomoto (M) has kept prices constant selling downsized packages Packages design and ease of availability are dimensions the competitive
Innovation Had launched two new variants in their VONO® instant soup line New Potato and Potato Mushroom variants
F. Corporate-Level
Strategic Analysis
Moderate to high levels diversification
Related constrained diversification strategy
retail and industry flavor enhancers and generates not more than 70% of its sales revenue
Sharing primary activity or support activity in order to create value AJI-MIX and SERIAJI
G.
Strategy Formulation I Matching Stage
Strength
Weakness
Strong quality control Safe and Halal Offer excellent service Customer Satisfaction Code of Conduct
Heavily rely on advertising Too focus on a specific market Seasoning market
SWOT
Opportunities
Healt concern Seasoning products· nutrition issues
T reats
Unpredicta le conomy ntense competition Maggi
H. Strategy Formulation II Current and Propose Strategies Business level Current Distribution channel is inefficient Take advantage of the technology
Propose A mobile computer and printer, paired with GPRS connectivity
Wireless data processing and printing Increase field sales productivity Bringing down the cost indirectly
Competitive
Strategy
Advertising are costl y, while campaign are relevantl y cheaper. ample: blood donation, recycle, free body check up campaign More campaign to be organi ed to create awareness and increase reputation of A jinomoto(M) eputation are important as positive reputation resulted average return or otherwise This strategy may help A jinomoto(M) to save more cost and generate profit.
Corporate
Level
Current Concentrated resources in selected core market Deploying its technological strength to differentiate its well-known brand Promote products with emphasis on the ´Eat Well, Live Wellµ concept Propose tilize existing plants and equipments with little hassle Develop new product line Expand its current product line
Credits to: