Page 151 - Accelerating out of the Great Recession

ACCELERATING OUT OF THE GREAT RECESSION

Asahi’s success was not entirely the result of its focus on distri-
bution through discount and mass-market channels; it also chal-
lenged its competitors with an aggressive “replacement program.”
In 1997, the beer industry came to an agreement that the
“use by” date marked on its beer products would be nine months
from the date of production. Very shortly after the agreement
was made, Asahi announced that it would initiate a “replace-
ment program” so that all its products would have use-by dates
of three months or less. Then it launched an advertising cam-
paign emphasizing the greater freshness of Asahi beer.
Asahi’s competitors, caught flat-footed, felt compelled to
respond by updating inventories with newer products at higher
costs. But Asahi had been careful to build up its supply of three-
month products (and reduce its inventory of nine-month prod-
ucts) so that it did not actually have to replace any inventory at all.
Asahi was not afraid to take on its competitors. The company
also launched a campaign in 1993 promoting itself as the “No.
1 non-heat-treated beer” to associate itself with the number one
image. By 1996, in the face of changing public demand driven
by Asahi’s clever positioning, even the market leader had
responded, switching its own process to a non-heat-treated one.
This strategy backfired for the market leader because the
change altered the taste of its premium lager and resulted in a
drop-off in demand.
A similar example can be found in the Japanese consumer-
electronics industry. During the 1990s, Yamada Denki, a mid-
size consumer electronics retailer, chose to compete directly
with market leader Kojima to gain share. After choosing to
locate its stores next door to Kojima, Yamada launched a cam-
paign advertising itself as the number one low-cost retailer and
guaranteeing the lowest price on every product. In fact, it prom-

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