Kirin Beer: Analyzing Kirin Holdings Using McKinsey 7s Framework

This case study examines Kirin Beer, a major player in the global beverage industry, through the lens of the McKinsey 7S framework. The analysis begins with a company profile, including its history, corporate structure, and key financial data. The core of the study applies the 7S model, dissecting Kirin's structure as a holding company with autonomous subsidiaries, its strategic initiatives for growth in food & beverages, health science, and pharmaceuticals, and its systems for innovation and value creation. The study delves into Kirin's competitive advantages, emphasizing its core technologies in beer production, consumer-centric marketing, and R&D capabilities. Skills, including fermentation and packaging technologies, are highlighted as key differentiators. The case study also explores Kirin's commitment to corporate social responsibility (CSR) and its drivers for innovation, culminating in an understanding of how Kirin uses the 7S framework to manage its diverse businesses, drive innovation, and address social issues. The analysis emphasizes how Kirin is adapting to market changes and leveraging its strengths to achieve sustainable growth across its various domains.

CBME 2
CASE STUDY - KIRIN BEER
MCKINSEY 7s
Trisha Mae T. Dalipe
Company Profile:
Formerly : Japan Brewery Company Limited
Predecessor: Spring Valley Brewery Company
Founded: 1888 ; 134 years ago
Parent Company : Kirin Holdings Company, Limited(100％ )
Group companies:
● Kirin Brewery Company Limited
Business : Manufacturer and sales of alcohol beverages
● Kirin Beverage Company Limited
Business: Development , manufacturer and sales of soft drinks
● Mercian Corporation
Business: Production and retail wine and other alcoholic beverages.
● Kirin City Co., Ltd.
Business: Management and operation of the nationwide chain of Kirin City beer pubs.
● Kyowa Kirin Co.,Ltd.
Business: Manufacture and sales of pharmaceuticals
● Kyowa Hakko Bio Co., Ltd. -Business: Manufacture: manufacture and sales of Amino Acids and nucleic
acids for pharmaceutical and industrial use bulk pharmaceuticals
● Kirin Holdings Singapore
Business: To plan and execute a comprehensive strategy in South East Asia.
● Kirin Europe Gmbh(Germany)
Business: Manufacture and sales of KIRIN beer in Europe
KIRIN HOLDINGS Company, Limited
Corporate Data:
Established on : Feb 23 , 1907
Share capital: ¥102.0 billion
● Revenue -¥1, 821.6 billion
● Normalized Operating Profit -¥165.4 billion
● Group Companies-176 companies
● Number of Employees -29,515
● Corporate brand favorability -$2,476 million
● Employee engagement score -72 % ％FY2021 Results％
President and CEO: Yoshinori Isozaki
Main business : Developing group wide management and overseeing their
implementation.
● Revenue -1,821,570 million yen on a consolidated basis (for fiscal year ended
December 31, 2021)
● Share capital -102,045,793,357 yen

● Number of Employees-29,515 employees on a consolidated basis (as of December 31,
2021)
The Story Behind Kirin Beer Labels
The KIRIN is a mythical creature, a messenger of good luck. Derived from various ancient
legends, it is said to appear as a prelude to joyous times to come.
The KIRIN, a gentle creature, flies the skies; its feet never touch the ground so as not to harm
any insects or plants. Also known as a symbol of a peaceful world, it is said to bring days full of
peace and tranquility.
For over 130 years, the Kirin brand has wished joy and happiness for all, ever since the day we
chose the KIRIN to appear on the Kirin Beer label. We will continue to wish good luck and bring
joy to all of our customers.
History:
The Japan Brewery Company, the forerunner to KIRIN, was established in 1885, and by 1888
they began brewing KIRIN. The market welcomed KIRIN, recognizing the beer’s authentic
German brewmasters who used German ingredients. In 1907, the Japan Brewery Company
changed its name to KIRIN Brewery, continuing its high standards in securing the best malt and
hops and investing in facilities.
This emphasis on quality led to KIRIN ranking in the top tier of Japanese beers, attaining a 60%
domestic market share by 1972. The launch of KIRIN ICHIBAN in 1990, with its unique first
press wart process, generated record sales and soon became one of the company’s most
successful products. Even today, KIRIN ICHIBAN holds a special spot in the hearts of millions of
beer lovers in Japan—and around the world.
Kirin Holdings Company, Limites
MCKINSEY 7s
1. Structure
Structure is the way in which a company is organized – chain of command and accountability
relationships that form its organizational chart.
● Kirin Holdings has adopted a pure holding company structure as a means of
controlling its diverse and global business, which is centered on 3 domains such as
food & beverages, pharmaceuticals and health science. As a pure holding company,
Kirin Holdings takes on the role of devising and implementing the Group's overall
strategies, monitoring individual businesses, creating synergy, and responding to
challenges surrounding sustainability through coordination across the Kirin
Group.
● The Kirin Group's individual companies conduct their business autonomously with
a sense of speed, while maintaining close ties to the local customers and other
stakeholders. Kirin Holdings grants appropriate authority to match the strategic stages
of individual Kirin Group companies and improves governance through the Board of
Directors and the Boards of individual group companies by dispatching directors to those
companies.
● Directors or Executive Officers of Kirin Holdings serve concurrently as directors
at the main companies in the Kirin Group.

● Kirin Holdings has adopted a Company with Audit & Supervisory Board system,
and aims to maintain and improve on a highly transparent governance system for
its stakeholders.
● The Board, which includes a number of Outside Directors, works closely with the
Audit & Supervisory Board, which also includes a number of Outside Audit &
Supervisory Board Members, and makes effective use of the statutory and other
auditing function to take final decisions on important matters. At the same time, the
Board endeavors to reinforce the monitoring function on management. Kirin
Holdings has introduced an executive officer based system in order to implement
strategies for each of its businesses and functions in an agile fashion and clarify
executive responsibilities. The Board of Directors determines the scope of
delegation to the Executive Officers based on their experience, track record, and
expertise in their respective fields.
Group company governance and performance assessment
● Kirin Holdings formulates and promotes Group strategy, monitors all Group
businesses, and creates synergies across the Group. Each Kirin Group company is
located close to its customers and stakeholders and administers its operations
autonomously and speedily with full authority to make business execution decisions
tailored to their specific strategies. Kirin Holdings seats a director on each company’s
Board of Directors to help maintain a high level of corporate governance.
● Until 2021, return on assets (ROA) and earnings before income tax (EBIT) for each
company, which is directly linked to return on invested capital (ROIC), were used as the
performance evaluation indicators for operating companies, and ROIC and business
profit are used as unified indicators from 2022.
●

2. Strategy
Strategy refers to a well-curated business plan that allows the company to formulate a plan of
action to achieve a sustainable competitive advantage, reinforced by the company’s mission
and values.
● Financial strategies to maximize value
● By reinvesting in the organizational capabilities that are the Kirin Group's strength, we
will accelerate innovation and consolidate the cycle of the value creation model.
● KIRIN BEVERAGE BUSINESS STRATEGY 2022

Long-Term Vision KV2027, 2019 Medium-Term Business Plan
Growth strategy must be based on the new reality
● Stronger existing core businesses are essential for growth
● Social issues such as QOL and preventative healthcare create growth opportunities
bridging food and pharmaceuticals
Changes in society
● Global increase in natural disasters
● Greater uncertainty caused by drastic
changes in economic systems
● Corporations expected to contribute to
resolving social issues
Changes in the market
● Maturation of beer market in developed
countries global shift towards craft beers
and premium products

● Expansion of regulations for alcoholic beverages and mounting pressure to implement sugar tax
● Introduction of public policies to reduce healthcare costs
Redefine business domain to enable sustainable growth
KIRIN BUSINESS DOMAIN
● Food &Beverages Domain -Form bonds between people and revitalize communities
through our alcoholic beverages and soft drinks. Contribute to well-being for consumers'
daily life through Food and Beverages
● Health Science Domain -Maintain health through Food and Beverages by preventing
disease and suppressing its progression
● Pharmaceuticals Domain- Develop new drugs using advanced biotechnology. Restore
health through personalized treatment and aftercare
To create value across our world of Food & Beverages to Pharmaceuticals, Kirin Holdings
established the Health Science domain to takes advantage of its unique strengths, in
addition to the existing business domains, namely the Food & Beverages domain (alcoholic and
non-alcoholic beverages businesses) and the Pharmaceuticals domain (Pharmaceuticals
Business). In the Health Science domain, Kirin Holdings will grow the business into another core
of its business by honing the core fermentation technology and biotechnology that have been
cultivated since its founding, and by leveraging the organizational excellence and assets that
Kirin Holdings has amassed over the years.
CSV Purpose
The Kirin Group is committed to playing its role
as a responsible alcohol producer and
addressing three key social issues: “health and
well-being”, “community engagement”, and “the
environment”.
3. Systems
Systems entail the business and technical infrastructure of the company that establishes
workflows and the chain of decision-making.
Value Creation Model
● Input -Drivers for innovation
The Kirin Group’s competitive advantages stem from four of our drivers which are
organizational capabilities:
(1) core-technology that assures value creation;
(2) consumer-centric marketing expertise;
(3) ICT that accelerates value creation; and
(4) diversity and inclusion, and culture for innovation.

Enhancement of these four capabilities drives our innovations to resolve social issues. Our
recent innovations that address pressing social issues include the world-first beer-tasting
beverage with zero alcohol content, carton boxes made with less material without sacrificing
sturdiness, and a novel way to remove caffeine from beverages.They reinvest economic value
gained from our business activities in improving these drivers, which will in turn drive the next
round of innovation.
● Business -Turning social issues into opportunities to grow our businesses in
domains that span the range from Food & Beverages to Pharmaceuticals
Since Kirin Group started as a brewer in 1907, we have been investing in research and
development to create a series of innovations and expand the scope of our businesses. Today,
we offer products and services in the Food & Beverages, Health Science, and Pharmaceuticals
domains that serve people in a wide range of physical conditions—from people in good health to
those who need medical care.
● OUTPUT -Innovations that address social issues .
In the Food & Beverages domain: Provide products and services that offer people greater
opportunities to connect with others
In the Health Science domain: Provide products and services that enhance people’s quality of
life
In the Pharmaceuticals domain: Continually create groundbreaking medicines
We use our drivers to create innovations in three business domains.
In the Food & Beverages and Health Science domains, our priority is to make our brands
more competitive to increase the value we offer and achieve sustainable growth.
In the Pharmaceuticals domain, we strive to become a Global Specialty Pharmaceutical
company by continuing to create and offer high-quality medicines.
4. Skills
Skills form the capabilities and competencies of a company that enables its employees to
achieve its objectives.
Core technologies that assure value
creation.
-Beer production and the origins of Kirin
Technologies
Kirin Group's technological capabilities start
with beer production. High-quality raw
materials and optimal brewing are
indispensable for making great-tasting beer. It
was in the course of research in these areas
that we developed technologies for handling
raw materials and controlling fermentation
and cultivation. In addition, we have refined
packaging technologies such as wrapping, containers and filling in order to preserve the taste of
beer as it is delivered to our customers. Moreover, we have developed engineering skills to
build manufacturing facilities for the steady mass production of beer.

● R&D -The R&D Division is the core of the Kirin Group's research and development activities. We
are engaged in research and development to bring exciting innovations to our customers and
society at large.
● Development of unique fermentation technologies in fermentation and biotechnology.
● Packaging - developing new technologies to help solve social issues surrounding packaging,
such as the marine pollution caused by plastic containers. (Institute for Packaging innovation)
● Engineering - At Kirin Group, engineering organizations have been set up within each operating
company to ensure that our manufacturing facilities are supported by engineers with a thorough
understanding of manufacturing processes, production technology and maintenance
techniques. Kirin Engineering Company, Limited, a general engineering company
specializing in the construction of factories producing beer, beverages, pharmaceuticals
and other products, is owned by Kirin Group and is able to flexibly carry out large-scale
construction, expansion and remodeling of manufacturing facilities for group companies
both in Japan and overseas. The capabilities of these engineering organizations, along with the
know-how and technical expertise in facility development that we have cultivated through our own
engineering of various businesses, are the strengths of Kirin Group, and support the growth and
development of our business domains, ranging from food and beverages to pharmaceuticals.
5. Style
The attitude of senior employees in a company establishes a code of conduct through their
ways of interactions and symbolic decision-making, which forms the management style of its
leaders.
The Kirin Group has established an internal hotline for reporting compliance violations,
human rights issues (including harassment), and other acts that violate (or may violate)
the Compliance Policy and Compliance Guidelines, with the aim of preventing serious
problems associated with corporate activities. They provide an environment where it is
easier to report by securing multiple lines in addition to the normal lines that are directed to
managers.
● How Hotlines Work -The following is the
general procedure for handling whistleblower reports
received via the hotline.
1. A whistleblower reports an incident (anonymity
is guaranteed).
2. Prompt notification of receipt shall be made
after receipt of the report.
3. After confirming the content of the report, a
decision on whether or not to conduct an investigation
shall be made generally within 20 days of receipt of
such report, and the whistleblower shall then be notified.
4. Fact-finding and investigation shall be
conducted.
○ Information on the method and progress of the investigation shall be shared as
appropriate in a manner that does not interfere with the progress of the investigation or
with the privacy of the subject of the investigation.
○ In case of serious violations as a result of the investigation, disciplinary action shall be
considered.
5. Feedback on survey results to be provided.
○ Feedback of the results of the investigation shall be conducted in a manner that does not
interfere with the privacy of the subject of the
investigation.

○ Prevention of retaliation, including confirmation that the whistleblower has not been
treated disadvantageously because of his or her report.
Within the Kirin Group, we define compliance as "fulfilling both legal and ethical
responsibilities that society expects from us by adhering to laws, internal and external
regulations and rules, and social norms, so that the Kirin Group can avoid the risk of
suffering unexpected financial loss or of destroying its credibility and can retain and strengthen
the trust of stakeholders." Group Risk and Compliance Committee promotes and manages
Group-wide compliance activities, while each Group company integrates compliance activities
into Risk management processes to ensure effective implementation.
● KIRIN GROUP COMPLIANCE GUIDELINES (Relationships to Employees)
● Initiatives to Prevent Misconduct in Research Activities
To prevent misconduct in the research activities of each company involved in Kirin Holdings
Company, Limited,they have established and operate a consultation and whistle-blowing
system, put in place internal regulations, and conduct training in accordance with the Kirin
Group’s Compliance Guidelines.
● General manager (person with the authority to oversee overall efforts to improve research
ethics and prevent misconduct, etc.): Head of Kirin Holdings Company, Limited Research and
Development Division
● Divisional managers (personnel responsible for improving research ethics and preventing
misconduct in relevant divisions and departments): Head of Kirin Holdings Company, Limited

Research and Development Division and the heads of research and development divisions of
regional companies (for Mercian, the head of each technological division and department).
● Research ethics education managers (personnel with substantial authority in regard to
research ethics education): Personnel appointed by the divisional managers.
6. Staff
Staff involves talent management and all human resources related to company decisions, such
as training, recruiting, and rewards systems
● Compliance training program
The Kirin Group conducts compliance training every year for all executives and employees in
Japan. We aim to help them understand the basics of compliance, such as "compliance is not
someone else's problem," "bad information should be reported promptly and accurately," and
"act openly and fairly," and to develop sensitivity to changes in society through the training.
In addition, the Kirin Group has established various whistle-blowing systems (see the below
section on "Hotline"). We make people aware through compliance training and other activities
that reporting to the hotline is for the purpose of improving the company by detecting and
responding to the seeds of injustice at an early stage, thereby improving awareness of the
hotline and creating an environment where it is easy to report.
In overseas, education and training activities are conducted in accordance with the unique
circumstances of each region.
We also conduct an annual compliance and human rights awareness survey mainly for Group
companies in Japan to confirm the degree of penetration of compliance, and to investigate and
take appropriate measures to improve any comments that appear to be problematic.
● STRUCTURE OF PERFORMANCE LINKED REMUNERATION
1. Bonus
● The performance evaluation indicators are the Company's corporate performance
evaluation indicators (consolidated normalized operating profit), business performance
evaluation (normalized OP of group companies or revenue in the health sciences
domain), and individual performance evaluation.
● The amount of paid ranges from 0% to 200% where 100% indicates the achievements of
targets.
Mechanism for linkage of bonuses to performance
●

1. The base amount of bonus is determined for each position in the bylaws.
2. "A" is the ratio of the portion linked to corporate performance, "B" is the ratio of the
portion linked to business performance, and "C" is the ratio of the portion linked to
individual performance.
7. Shared Values
The mission, objectives, and values form the foundation of every organization and play an
important role in aligning all key elements to maintain an effective organizational design.
● Corporate Philosophy
KIRIN brings joy to society by crafting food and healthcare products inspired by the
blessings of nature and the insights of our customers.
We pride ourselves on offering products based on what people want.
We pride ourselves on our ability to harness the blessings of nature through innovative
technology.
We pride ourselves on delivering tangible satisfaction and quality in everything we make.
All of which ensures that we exceed customers' expectations.
And naturally, we do not stop there.
As we look forward with vision and dreams, we aim to continue offering food and healthcare
products that bring new joy to people's lives everywhere.
Always a step ahead, the Kirin Group supports health, pleasure and comfort in your life.
● ONE KIRIN VALUES
”Passion. Integrity. Diversity."
Passion :Our determination to continuously provide our customers and society with new value
propositions based on innovative ideas, and our enthusiasm to meet goals with pride in the
companies we work for and the brands we offer.
Integrity Our gratitude to our stakeholders for always helping us move forward, and our promise
to remain honest and humble in every business activity to serve them better.
Diversity: Our respect for different perspectives and values that enable constructive discussions,
and our belief that the "differences" have the power to change the world and create better
solutions.
CONCLUSION
In conclusion, in the case study of KIRIN Holdings of MCKINSEY 7s Model.
From the company history starts 1885 Japan Brewery Co., Ltd to 1907 Kirin Brwery Co., Ltd. to
1967 Feb. Vending Machines starts selling soft drinks to retail stores, 1967 Koiwai Dairy
Products Co., Ltd established , 1983 May Kirin city Co., established , 1990 Jan. Kirin
techno-system Corporation established , 2000 Kirin Logistics Co., Ltd. (the forerunner of Kirin
Group Logistics Co., Ltd.) established by Kirin Logistics Corp. merging 7 logistics affiliates ,
2002 Mar. -Acquires a stake in San Miguel Corp. in the Philippines., and 2007 July Kirin
Brewery Co., Ltd. changed its name to Kirin Holdings Co., Ltd. and became a holding company
of the Kirin Group etc. and other group companies operated.

They are all aligned with the “Joy bring us together” with their values Passion , Integrity and
DIversity as One Kirin to serve foundation of purpose to partner with society in achieving mutual
growth by addressing social issues this CSV driven approach at the redefined core of its
business management (Food & Beverages domain ),(Health Sceience Domain ) &
(Phamaceuticals domain). Each business segment makes efforts toward Thier “CSV
Commitment” under the premise of Kirin as “a responsible alcohol producer (dealing with
alcohol related problems).” These efforts are aimed at meeting guidelines related to “health and
well-being (Support for maintaining the immune system),” “community engagement (respect for
human rights,” and “the environment (Overcoming climate change). They are also alignes with
the United Nations Sustainable Development Goals to create value and grow sustainably with
society. By doing so, they will bring joy to society and contribute to a joyful life for their
customers.Their management structure specifically indicates each of their own roles and
functions as Kirin Holdings takes on the role of devising and implementing the Group's overall
strategies, monitoring individual businesses, creating synergy, and responding to challenges
surrounding sustainability through coordination across the Kirin Group as long as they are
aligned with the CSV same purpose and mission and goals of the company.
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