Strategic Analysis: Yakult's Global Market Entry Case Study

This case study examines Yakult's strategic decisions for global market expansion, focusing on the challenges and opportunities within the competitive beverage industry. The analysis highlights Yakult's adoption of franchising as a key market entry strategy, emphasizing its advantages such as reduced risk, minimal investment, and enhanced brand promotion. The report explores the internal and external business environments influencing Yakult's decisions, including the impact of competition and the importance of effective marketing mix techniques. The study concludes that franchising is a suitable approach for Yakult to achieve sustainable profitability and competitive advantage, particularly in markets like Europe, by leveraging local expertise and adapting to consumer preferences. The case study also references Yakult's partnership with Danone, which strengthens its probiotic product offerings in the European market.

CASE STUDY

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Which route will crack the tiny bottle and release Yakult's message ?
In the present scenario of marketplace, there is an increased level of competition among
industries which directly influence organisation decision making potentiality as well as ability to
attain high productivity ratio (Dant and Grünhagen, 2014). However, in order to cope up with all
current or emerging challenges or threat, an effective strategic decision help an establishment to
obtain profit maximisation with an optimal utilisation of resources in a better manner. Hence,
this report is based upon Yakult which is one of the reputed or famous beverage company in
Japan and it is incorporated in the year of 1930. Moreover, under this study it's prime focal point
is to examine the growth level of Yakult and recommend suitable path which lead them to
expand their market division in global pace.
As Yakult has started its business with an aim of delivering high and best quality of
product by targeting health conscious people across the globe. However, it has been successful in
their strategies which made them to be viewed as a pioneer in the field of Probiotics in Japan
market. Additionally, today Yakult has enlarged its functional area beyond food and beverage in
order to play a progressive role in pharmaceutical and cosmetics sector as well. Moreover,
company takes an initiative to examine or determine industry trend or demand and based on that
they make an corrective course of action which lead them to accomplish its organisational goal
in an efficacious or expeditious means. However, one of its foremost marketing strategies which
they utilise for enhancing its productivity level is that Yakult Lady System and retail sales
through increased volume of retailers, vending machine and other mode of sale. Hence, these
two techniques impact positively over firm's capability in acquiring sustainable profitability ratio
and also to add value towards its brand image (Fong, Lee and Du, 2014).
In addition to this, by analysing or evaluating internal and external business environment,
it enable Yakult to implement a decision regarding entering into new geographical region i.e.
European market which act as one of the turning point for its growth level. However, due to
fierce competition within European industry, it generated huge challenge for Yakult to survive
within the market in an innovative or creative manner (DANONE : Danone enters a new phase in
its strategic partnership with Yakult, 2018). Therefore, in order to overcome over such rivalry, in
order to expand its marketing phase across the globe there are various routes are available in the
market like licensing, franchising, merger ans acquisition, exporting, joint venture and so on.
Thus, adoption of appropriate entry mode assist Yakult to obtain sustainable profit margin in an
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impressive or productive way within prescribed time limit. Furthermore, each of the mode
contains its own procedure, obligation, rules which makes them different from each other.
Furthermore, in order to strengthen long term strategic collaboration Danone signs its partnership
with Yakult which help them to enrich their probiotic products in European industry in an
amended manner (Hennart and Slangen, 2015).
In context of Yakult business operation, Franchising market entry strategy is viewed as
most appropriate for their expansion and enrichment of productivity level. However, under this
tactics it signifies as an arrangement or procedure in which one party i.e. franchiser grant another
group (franchisee) the authority to use its trademark or name, system, processes, policies to
produce product or service in a better way. Along with this, it help Yakult to extend its brand in a
global level as it contain limited risk, requires minimum investment as well as offers enormous
opportunity to develop its proficiency ratio. Moreover, it aid them to manage both the
marketplace i.e. Japan and Europe in a amended way which help them to build a healthy or
strong relationship with customer and also empower them to attract wide range of population in
order to gain competitive advantage (Hoffman, Munemo and Watson, 2016). Apart form this,
another benefits which Yakult can acquired from Franchising is that they will be able to acquire
best contribution in advertisement and promoting brand name in a modern and ingenious style.
Thus, as in franchising each and very roles or function are shared among both parties, it will
render less operating cost as well as aid Yakult to minimise the risk in order to increase high
level of proficiency and productivity in an trenchant or prompt manner. In addition to this,
implementation of best marketing mix techniques enable Yakult to produce best quality of
products in a right location with affordable price in order to maximise profit in a improved mode.
It has been summarised from the above report effective marketing strategy plan help an
establishment to expand their market share or size as well as enable them to examine business
environment factors in order to acquire best positioning within competitive marketplace.
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