Essay on Suntory

SWOT Analysis

Suntory’s strength lies in its massive resources and capabilities that it can use to gain a competitive advantage by expanding the international market. Excellent quality service can assist Suntory to expand its market dominance further, as current customers are incredibly loyal and can enable them to stay competitive in the global market with other international giants. Suntory owns several well-known brands in the home markets and has made excellent relations with current suppliers (Sugai, 2020). However, the company’s weaknesses stem from a lack of great talents, particularly in information and electronic reinvention. Among the opportunities is its ability to leverage rising expendable income to develop a new business model in which customers pay incrementally for using its commodities. On the other hand, it may face threats such as pursuing optimal post-acquisition incorporation and growing tensions between the US and China’s economic relations, resulting in protectionism. Another threat is the entry of new entrants capable of lowering costs and increasing efficiency.

Issues

Suntory is facing issues with a lack of talents with skills in artificial intelligence (AI) and advanced analytics. For example, the company has a limited geographic footprint, and 40% of its portfolio comprises low-value, slow-growing brands(Sugai, 2020). A significant portion of the weakness was inherited and is long-term in nature, which is aggravated by Suntory’s existing narrow scope on a few major brands in a tiny range of markets. Additionally, unlike its rival Brown-Forman, the returns on market expansion will be slow. Also, the company is likely to have problems creating an impression in smaller whisky classifications, like bourbon or other US liquors or Irish whiskey, due to the enormous benefit of the first differentiation strategy.

Problem Statement

Suntory is experiencing numerous challenges that may limit its competition in the international market. Furthermore, the fact that the company has such massive debts complicates purchasing a business with significant weaknesses. Hence, competitors may benefit from a weak business with minimal financial ability, as the majority of profit generated goes toward debt repayment (Sugai, 2020). Additionally, Suntory will lack the geographic reach necessary to pick up some of the slack. Likewise, Suntory has lagged behind its rival based on geographic diversity. Suntory’s marketing strategy is easily replicable, despite the firm’s numerous patents and trademarks. Project management is excessively specialized in delivering on all external stakeholders’ expectations, resulting in poor public relations and adverse customer reactions.

Case Response / Recommendation

Suntory may pursue lateral sectors like manufacturing, acquisitions, and restructuring to expand market share, particularly by enhancing the features of existing products and services. Suntory is well-positioned to capitalize on those opportunities and expand its market share through internationalization. Besides, Suntory’s can increase its commodity and branding strategy to target multiple segments of the Chinese market simultaneously. The strategy can enable Suntory to diversify its revenue streams and profit margins. Besides, the company can consider rebranding their products to compete with the international brands by incorporating the latest technology and skilled talents. Additional investment in creative vending packaging will help the company maintain its progress in the dynamic distribution network. Suntory can maintain connections through customer loyalty through the adjustment of vending machines and the adoption of digital currency. Moreover, the expanding growth of online retailers can be leveraged against the fierce competition in traditional sales outlets (Sugai, 2020). The competitive landscape in Japan today makes it challenging to establish an entirely new massive brand. As a result, opportunities are available in product innovation under an established brand portfolio.

References

Sugai, P. (2020). Suntory: Rebranding The Japanese Whisky Highball. Ivey Business School Foundation.