owner, Suntory Holdings, aims to boost global sales. Photo: William DeShazer for
ID: 2759833 • Letter: O
Question
owner, Suntory Holdings, aims to boost global sales. Photo: William DeShazer for The Wall Street Journal
By Tripp Mickle
May 4, 2015
A temporary bar popped up in Tokyo’s Roppongi entertainment district last summer. Stacked on a long counter were 700 bottles of Jim Beam bourbon.
Young people were the target crowd for the Jim Beam Bar. The 30 cocktails on the menu used Jim Beam in ways likely to strike American bourbon drinkers as heresy. Among the popular ones—the Citrus Beam Highball, made with its namesake Kentucky bourbon, club soda and freshly squeezed lemon, orange or grapefruit.
That exercise in cross-cultural pollination was the work of Suntory Holdings Ltd., which bought Beam Inc. last year for $13.6 billion, creating the third-largest liquor company in the world. To help pay back debt amassed in the deal—one of the biggest-ever overseas transactions by a Japanese company—Suntory is trying to double global spirits sales by 2020.
Hitting that goal won’t be easy. Suntory will have to outpace industrywide growth in its two biggest markets, the U.S. and Japan, and expand into new markets. While bourbon sales have been on a tear in the U.S., pushing Jim Beam in Japan is another matter. And selling Japanese whiskies in the American market, where Yamazaki, Kakubin and other Suntory brands are largely unknown, is likely to be even tougher.
At the same time, another challenge looms: meshing two vastly different corporate cultures inside its new global liquor subsidiary, Deerfield, Ill.-based Beam Suntory Inc.
What appears to be the business strategy of this firm and is it likely to succeed?
Explanation / Answer
Business Strategy is expansion, Suntory holdings wants to expand its global foot prints as well as its product offerings/ portfolio. Hence, It can be rightly said that this was a very bold and brave decision as well as a futuristic decision from Suntory Holdings.
Expansion requires many ways of expanding business and acquisition is one of the fastest and more likely a safer way of expanding business, which Suntory chose. With this acquisition Suntory holdings can easily penetrate into US market can offer a combined product portfolio of strong brands to the customer in different segment of beverages. It will ultimately give a boost to the sales of Suntory Holdings.
This business strategy is likely to succeed since the acquisition will help Suntory holdings to speedy penetration in US market and other markets with combined product portfolio of strong brands.
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