Management:
Suntory is very active in expanding the
Southeast Asian market. The company currently has sales of several tens of
billion yen in this market and plans to increase the sales to 100 billion yen
in three years. Focusing on the Southeast Asian market is part of Suntory’s
strategy to become a global company in the true sense of the word. The target
company is Nestle of Switzerland. It is a long way to catch up with Nestle.
Nestle has sales of 9,300 billion yen, while Suntory’s sales are 1,850 billion
yen.
Suntory grew rapidly by expanding the
whisky business around 1930 by taking advantage of the westernization of Japanese
dietary life. Actually, whisky characterized the company for a long period. In the
1980s and 1990s, its whisky business dwindled because it failed to understand
the change of consumer behavior precisely. Realizing that youths do not drink
hard drinks as much as their parents did, the company reorganized the business
portfolio drastically and set the soft drinks business as the mainstay. Soft
drinks increased the share in its business from 20% to more than 50% today. In
fact, profit from soft drink sales accounts for 60% of its total profits. The
company has established its business domain with the catch phrase “Suntory
lives with water.” Its natural water sold about 6,400,000 cases, two times as
many cases sold by the runner-up. In the soft drink market, Suntory has 22%
share following the Coca-Cola group.
Suntory is also successful in the beer
business. The company is now the third larger beer company, surpassing the
Sapporo Beer. It has 16% share in the period between January and March 2013. Consumer
behavior and taste change rapidly, and every company has making strenuous
efforts to keep abreast of these changes. Even today’s bestselling products are
destined to be one of the obsolete products sooner or later. The company will
construct a laboratory staffed with 250 researchers in 2015. No company can
maintain its competitive edge forever. Developing highly competitive new
products needs a different approach free from the traditional way of thinking,
the company reckons.
Suntory’s traditional ad strategy in a new
product launch is ad blitz with a decreased product price. The company spent
about 450 billion yen on promotion and advertising in 2012. It spends about 24%
of sales on promotion and advertising, as against competitors including Kirin spend between 11% and 15%. It is not too much to
say that future of a company depends on new product launch. Suntory’s famous
company attitude – Go for it – will help the company continue growing.
Suntory’s canned coffee CMs starring Tommy Lee Jones
