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Name: Vijay Premani
Roll No: 141162
Section: A
Batch: MBA (FT), 2014-2016
Executive Summary
We began with understanding and analysing situation which is
nothing but how to stabilise what we have and also explore growth
opportunities for Nakamura lacquer company, based on our analysis
we came up with a problem statement which helped us understand
what the real problem is, in order to correct and address the
problem we first decided what our objectives were and then came
up with available options that would help us meet our objectives in
the best possible manner, later after evaluating various options we
finalized on one i.e. to join hands with Mr. Walter and also, we
recommended a backup plan which is to explore opportunities
within Japan.
Situation Analysis
This case revolves around Mr. Nakamura who is the owner of the brand
Chrysanthemum under Nakamura Laquer Company based in Kyoto, Japan. Mr.
Nakamura started handling their family business in the year 1948 and turned it
into Japans best known and bestselling brand that is known for good quality,
dependable Lacquer ware. Nakamura built a substantial business employing
several thousand men and produced 500,000 sets of laquer table ware every
year. However, Nakamura could only sell his product to some tourists via
department stores, except that, Nakamura did no business outside Japan. Mr.
Nakamura was not being able to market their products outside Japan due to legal
issues; he had two highly recommended visitors from the US with best
credentials. Each made an offer to Mr. Nakamura about how they can help him
sell his products in the US. Mr. Phil Rose- VP Marketing with the largest
manufacturer of dinner ware in the US National China Company that had 30%
market share in the US offered to place firm order of 400,000 sets of laquer
dinner ware at 5% more which should be delivered to them in Japan itself
however the sets should be made under their brand name Rose & Crown and
also they would not sell to anyone else in the US. On the other hand Mr. Walter
Semmelbach from Semmelbach and Whittacker Chicago, which is the largest
supplier of hotel and restaurant supplies in the US and also into buying of dinner
ware for a number of department stores offered to introduce Japanese laquer
ware in the US. They estimated market of 600,000 sets per annum and expected
it to grow to millions in 5 years. They promised to make the initial investment of
$1500000 in promotion and marketing of the brand in return they asked for
standard representation of their brand for 5 years on commission basis which
would be 20% of total sales, i.e. roughly Mr. Nakamuras profit margin.
Mr. Nakamura now has to take a decision on how to grow their business and
cross national boundaries, also he has to decide if he wants to accept one of the
two proposals.
Problem Statement
Major concerns of Mr. Nakamura which needs to be addressed are stability
of his organization and growth platform which he has to choose, as he
cant invest outside Japan directly, he has to consider one of the available
options to expand and grow his business in Japan and other countries.
Objectives
Options
Evaluation of Options
Pros
Cons
5% Extra margin
No addition to existing
brand value
No awareness of brand
outside japan
Pros
Cons
No investment in marketing
& promotion required
Increase in production in
order to meet demands
Pros
Cons
Opportunity to increase
revenues and profit margin
Risk of functioning in
saturated market
Cons
Focus remains on
improving existing
business
Attain Stability
Decision
Action Plan
Contingency Plan
If in case due to some unforeseen circumstances the chosen
decision cant be implemented, best option would be to stick with
option 3 and work within Japan.
UNDERTAKING
I, VIJAY PREMANI hereby declare that this assignment is my
original work and is not copied from anyone/ anywhere. If found
similar to other sources, I shall take complete responsibility of
the action, taken thereof by, WAC Team.
Signature
Name: Vijay Premani
Roll NO.: 141162
Section: A
Batch: MBA-FT, (2014-2016)