Background market and strategies of the nissin group business essay

priming coat commercialize place and st computegies of the nissin group transaction essayThrough the evaluation of the background, commercialize situation and crinkle strategies of Nissin Group, this paper provides the explanation on why Nissin flashing garrets prepare achieved a fast information performance in the clamorous domes business in Hong KongThe study of Five Forces and PESTEL analyses result lead to the instinct on how the macro-environment and micro-environment affect Nissin performance its business direction and strategy. A muchover study of the results from the berth of an inhering competence analysis to the results from the Five Forces and PESTEL will identify the strengths, weaknesses, opportunities and little terrors of Nissin. These findings will then tell Nissin of what needs to be minimized, eliminated, and to descend or neutralize risks.All these findings will add up the reasons to unloose how Nissin brooks its grocery leader position in Ho ng Kong. Suggestions on improvement and execution of corporate strategy will in similar manner be elaborated.1o. Introduction undismayed japanese entrepreneur named Momofoku Ando open up Nissin fodders around the middle of the 20th speed of light with the name Chukosasa Co., Ltd. Foreseeing that Japanese hostel was world frugal totallyy and neighborlyly reengineered toward business speed and efficiency, he besides sought to reengineer the Japanese diet in reception. His answer to the requisite of speed exerted and requireed of the advance(a) Japanese was simple the second base noodle.The invention revolutionized the food industry not provided in Japan simply also without the world. Now Nissin nourishments, produce not only clamant ramen noodles but also fresh and pre-packaged frozen food, and meals-ready-to-eat including cereals and spaghetti. But noodles remained the base harvest-home draw. Mr. Ando stayed ahead of the war-ridden pack with remarkable ex istences. In 1963, he introduced into the grocery the ramen Yakisoba, which had a separate flavoring packet. A decade later, Momofoku Ando invented shape noodles and in 1984, Nissin intellectual nourishments established in Hong Kong (Nissin pabulums Holdings, 2010).What has been Nissins strategy to squall the various forces playing upon the bit food industry? How valid and viable would this strategy hushed be in an age of high technology and rapid spheric integration? And now, lets start to know the direct come crosswise stakeholders in Hong Kong. commission of Nissin The Management receives strong support from P arnt guild who has made the sustainability a great deal easier for a stronger market shargon.Staff of Nissin They ar the executors of the business. Staff would be quick to work for Nissin if the business is stable and with continuous growth.Hong Kong consumers the market sh are is volumed amongst the youthfuler generations and white collars as they accept cutting trendy food, peculiarly from Japan.Food and Environmental Hygiene Department (FEHD) of Hong Kong Government the Government has to retard the types of incoming food products for consumption, as a statutory body, FEHD will rein the quality of food items importing to Hong Kong.Hong Kong Consumer Council it regulates the selling of consumer goods to the public in a fair trade practice.By supports of academic references, there will be a careful analysis of macro-environment and micro-environment undertaken by using Five Forces and PESTAL, add-on a review of the internal analysis by strategic capabilities. The outcomes from remote and internal environment analyses will be combined in a drudgery analysis. From the results of this analysis conclusion on overall business strategy, what ever so improvement or implementation can be careworn through the methods of Porters Generic Strategies, Ansoffs matrix and organic method.2. synopsis of Nissin in the Instant Noodles att ention in Hong KongThe sticking analysis of Nissin is based on strategy development processes suggested in major strategic management literature. There will be a careful analysis of macro-environment and micro-environment undertaken by using Five Forces and PESTAL, positive(p) a review of the internal analysis by strategic capabilities. The outcomes from outdoor(a) and internal environment analyses will be combined in a SWOT analysis. From the results of this analysis conclusion on overall business strategy, many improvement or implementation can be drawn.2.1 outer Analysis Industry Analysis/ Five ForcesAnalyzing the generic food industry from the perspective of Michael Porters five forces, namely, the threat of juvenile entrants, competitive emulation within the industry, the threat of substitutes, the bargaining power of customers, and the bargaining power of suppliers (Porter, 1985).Threat of new entrantsNissin Foods in Hong Kong does not perceive any new entrants or comp etitors in the industry. The market appears to be developmently expansive and lucrative and this is expected to lure new participants. However, the predominance and well-entrenched positions of the current players had dampened the en and theniasm of those who intend to enter the industry from outside. industrial competition would probably more ensue from within and intensified internal competition would take place in the form of innovations in the product itself as well as in promotional spirits and packaging. The barriers to entry are quite formidable considering that customer loyalty to the alive players are quite strong and that these current players have already established linkages with local baronial sources of capital and distribution outlets (Becker, et al., 1999).Competitive rivalry within the industryThe repetitive noodle industry in Hong Kong is a highly intense rivalry among the current players, thus fashioning the industry itself highly competitive. Innovations a re normal and the market now touch ons as its highly popular products, environmentally favourable instills and containers and food ready to eat from the moment the packages are opened. Advertisements fight for prison term both on mass telecommunications channels and over the Internet and companies also engage in intense competition in the sponsorship of stock-stillts like games and competitions. The breathing noodles companies also engage in the constant monitoring of the performance of their products on the market, outlaying huge sums of coin for customer surveys, promotions, and advertisement as well as in technology and manufacturing innovations.Threat of substitutesHong Kong consumers are increasingly health conscious, they demand fresher and high nutritional food. As much(prenominal), there is an increasing consumer gustatory modality for fruits, vegetables, poultry and low fat, low sugar and zero to low preservatives depicted object products. No matter how much ha rd works Nissin has contributed to the improvement of noodles quality, the dried secondment noodles are not considered as a real meal to the consumers in Hong Kong. Substitute products like those straited by Jollibee, McDonalds, KFC and fast food noodle houses are slowly but steadily flooding the market and as buyers suit more tend to the Western style of business activities and unavowed lifestyles, such substitutes become increasingly attractive than the traditional instant noodles. talk terms power of customers (Buyers)It bears negatively on the prospects of Hong Kongs instant noodle industry as more and more pot acclivity in terms of social status and economic position. The increasing purchasing power of the nation exerts leverage on instant noodle companies who might see the loyalty of their customers being eroded by their increasing incomes. The substitute product firms such as the fast food chains are also known for their notoriously low operating costs and their relat ively cheaper products. Cheaper products have a agree income effect on the consumer as they realize the greater power of their money vis-a-vis the substitute product. When combined, these factors lead to the rational consumer realigning his consumption possibilities curve to regard the substitute rather than the originly patronized product. This situation currently faces the Hong Kong noodle industry.Bargaining power of suppliersFinally, and as a counterpoint to the pathetic prospects with regard to the increasing demand of substitute products in the instant food market and the increasing power of customers, the instant noodle industry is seen to still deem its hold over the supplier sector. In this regard, the bargaining power of the suppliers for the instant noodle industry clay low as many of the free-lance supplying firms have either been vertically integrated into the existing companies or have been interlinked through long term supply contracts. The low rate of entry int o the industry also act as a safety device net that limits the power of suppliers to charge high prices for the firms inputs which basically include wheat, buckwheat, corn, sesame petroleum, and different organic inputs. The suppliers market remains huge and extensive allowing for cushy substitutability whenever a supplier becomes a party to an unprofitable relationship.2.2 External Analysis PESTELThe PESTEL analysis provides a comprehensive list of influences on the manageable success or failure of particular strategies it stands for political, economical, social, technological, environmental and legal. (Johnson, et al., 2008)Political mooringHong Kongs political system follows the set-up envisioned by the Chinese government when the former British colony returned its sovereignty back to China in 1997. The Chinese government maintained the capitalist economy and so the situation remains favorable to continued and sustained business expansion. Hong Kongs administrative struc ture conservatively and strictly enforces laws and regulations that regulate fair business competition. Corruption is at fair low levels and government ordaineds are careful to preserve the Chinese governments constitution of fair but strict governance according to the law (Goodstadt, 2010). economic itemWith Hong Kongs position as one of Asias monetary and trading bosoms tightenly entrenched, the city is actually looking forward to an some other sustained economic growth by 2011 and beyond. Hong Kong remains a fast-paced hub of businesses among almost all the global cities and thusly social mobility is fluid, leading(p) to a fast rising middle class with an increasing purchasing capacity. Demand for instant foods is therefore expected to accession and despite the existence of a fairly coat competition, notably the Toyo Suisan Kaisha, Ltd. House Foods Corporation the Nong Shim keep companionship, Ltd. the Tingyi Cayman Islands Holding Corporation Asia Food and Properti es, Ltd. the Ottogi Corporationthe Myojo Foods Company, Ltd. the Tokatsu Foods Company, Ltd. and Bing-Grae Company Ltd, the market shares of these companies remain small. With the expected expansion of existing demand, will in effect scramble for larger and larger shares of this market. amicable SituationNoodles remain a primary staple in the Chinese diet, it being one of the traditional foods associated with the culture. As the social structure modernizes and instantaneity becomes a part of the societys way of life, instant ramen noodles become the norm. Cultural adjustments in response to modernization have ofttimes been slow but the rapid toleration on instant noodles ever since its introduction in the 1950s has been sincerely yours revolutionary, the product being responsive to the demands of both tradition and modernity.Technological SituationThe information and communications technological infrastructure in Hong Kong has been everlastingly at the forefront of the adoption a nd utilization of new generations of such technology. Manufacturing equipment remains express of the art and Hong Kong laws and regulations are un proportionalityrictive of the entry of more advanced technology. Hong Kong, moreover, is solidly linked to the global village through the Internet with firms recognizing the imperative of such linkages with the status of their Hong Kong firms as hubs for their global operations.Environmental SituationThe government and the people of Hong Kong are concerned about the implications of manufacturing activities on the environment. Firms should answer the demands for corporate social responsibility in this aspect. For example, befoulment and waste management are curiously key considerations. Since government has already put in place policies that address environmental concerns, environmental reporting is now the focus of governmental essays. opposite sectors are seeing the value of linking environmental responsibility and reporting (The railroad tie of Chartered Certified Accountants, 2010). As environmental reporting becomes more widespread Hong Kong firms are also given the chance to keep with international trends. healthy SituationHong Kong provides an extremely favorable legal environment to businesses, as the official rates of income revenue enhancementation for both individuals and corporations are relatively low compared to other business areas. Corporate income taxes for example peak at 17.5% allowing business formations higher outlays for investments and expansion providing them sufficient breathing space for increase profits and returns on their investments. These conditions serve as a major pull factor for regional and local investors including Nissin Food. Companies who also have CRS departments like Nissin could also avail of tax holidays of as high as 10% on their incomes (Hong Kong SAR, 1997). In addition, courts and sublime agencies are highly competent and legal expertise are extremely trustw orthy in a place that had real an clarified disposition for judicial fairness and equitability from even from its years under British rule.2.3 versed Analysis CapabilitiesNissin Food Co., Ltd. has always been extremely competent with sufficient financial capacities that should allow it to withstand fluctuations in consumer demand throughout the years. Its manufacturing plants and equipment remain modern and environmentally safe, complemented by subsidiaries that have safety research in food technology. Nissins technological expertise, directorial competence and workforce commitment remain at the highest levels and the Ando family has kept the familys trade secrets secure with the proper legal and propriety registrations and protection. Technological knowhow has often been a trademark of the bon ton ever since it was established and kept with important business moves over the years.Quality control technology has been especially developed through the years with the company regu larly testing and re-testing its products before they are put on the shelves and marketed overseas. Even packaging, storage, and transport mechanisms are strictly monitored and much adjusted to go over quality standards of safety (Nissin Food Co. Ltd, 2010).Through these initiatives, Nissin Food has maintained a solid image as the primary instant food corporation carrying what they call Japan technology. The company also enjoys an excellent temper with its suppliers as well as its workforce and the city of Hong Kong itself. some other internal competence of the company is the presence of a highly competitive and committed workforce led by directors who are highly accomplished in their respective fields. Employees undergo periodic training and evaluation mechanisms, follow strictly implemented guidelines in the performance of their respective jobs. Human resources thus become highly motivated and trained (Nissin Food Co. Ltd, 2010).Regardless of these competencies, the company fa ces real risks, which if left unattended may pose serious attacks on the stability of the company. Among these would be food safety issues as consumers become more and more conscious of bio-terrorism while other brands are more crisply promoted. The risk of increasing prices of raw materials such as flour, palm oil and petroleum-based products for packaging purposes is also accounted. And more, risks related to information systems become more technologically sophisticated than ever.3. SWOT AnalysisSWOT analysis is an important spirit in preparation but its often being underestimated its usefulness and functions. SWOT analysis is a basic, heartyforward model that provides direction and serves as a basis for the development of marketing plans (Ferrel, et al., 1998).StrengthsNissin Instant noodles have made a significant impact in the Hong Kong residents diet ever since the companys branch was established therein in 1984. Thus the company enjoys a high reputation with the brand itse lf having instantaneous experience and respect by its patrons. The brand enjoys sustained loyalty among consumers, its manufacturing sector known for sanitary and environmentally friendly payoff processes, and the product is known for its flavor and perceptivity, price reasonability, health attributes, and long l skirt life, characteristics which make Nissins instant ramen noodles highly appropriate to the lifestyle of the modern Hong Kong resident. Mr. Momofoku Ando had retired in 2005 but the family has retained its unique capacity to adjust its products to various heathen contexts, delivering dozens of varied flavors for different country and city favorences and its keen recognition of new complementary products like environmentally friendly containers and cups to merge and link-up with manufacturers of these innovations to ensure cost efficiency to sustain business scale.WeaknessesThere is no unpatterned weakness of the company except perhaps that the aggressive expansion of its business may have reached the limits of saturation. The relatively unchanged firm logo and design over half a century may have become boring among consumers psychological recognition. Brand familiarity does have a second edge in that it may psychologically influence consumers to try out a new brand. Nissin Food has also been relatively overtaken by other firms in cutting the preparation time for the instant noodles product as ma and Fuku noodles can be eaten straight that matched perfectly instant.OpportunitiesHong Kong is a huge market for the food industry with its population of over 7 million expanding at an average annual growth rate of 1%. The market potential is therefore inspiring especially considering the fact that over half of this population is urban based with more and more young people drawn into high paced urban living. There are also more young women from both local and foreign places entering the workforce. This means that local family populations are left w ithout the traditional ways of cooking and food preparation as women who were formerly tasked with culinary preparations at home migrate to the center for employment. The emergent demographic picture also portray a steadily outgrowth segment of single people in the labor force, swelling the ranks of those who would prefer instant and fast food rather than traditional long-time home cooking.Nissins primordial demonstrated concern for environmental and health safety concerns, seen in the establishment of its food safety research institute is also a positive sign given the worlds increasing concern for environmental safety standards and the increasing health consciousness of people in recent times as they look consistently for low fat, low salt diets. Hong Kongs fast paced society also is an opportunity, as the citys demands for instant convenient food remain high. This offer Nissin the opportunity to expand from noodles to other instant food such as coffee, juice drinks, spaghetti, bread and snacks and the chance to establish linkages with other food outlets like restaurants, or otherwise introduce distribution innovations mobile snack center in schools, shopping malls, cinemas and exhibition halls.ThreatsThe instant food competition comprised of the companies mentioned higher up and other brands like Doll noodles, Sau Tau and Master Hong pose the main threats to Nissin Foods. If the development health consciousness provides a positive note vis-a-vis the companys effort at development safer and healthier products, there is also a downside as mass media increasingly airs concerns about monosodium glutamate (MSG) and other preservatives used in instant food production. There is also a growing taste and preference for restaurant food and fine dining especially among the new rich. The emergence of organic and fresh instant noodles in the market particularly by the competition and the rising prices of wheat and other raw materials are foreseen to pose considerab le threats especially with rising demand for these products by other demanders worldwide.DiscussionThis section will critically propose some strategies that Nissin Food Co., Ltd might implement in consolidating or even expanding its hold in the instant foods market in Hong Kong. Michael Porter recommended three generic strategies in this regard, namely cost leadership, differentiation, and focus (Porter, 1980).In terms of cost leadership, Nissin Food has always been ahead in the development of low cost instant noodles and other food products compared to many of its competitors. Company policy has always been tell to the elimination of operational glitches that would lead to increased production costs and streamline the process. This explains why despite the upgrading of technological capacities and the establishment of research institutions that would simultaneously increase expenses, Nissin Food is still capable of producing high quality noodles the be interchange at relatively a ffordable prices on the shelves.With regard to differentiation, the Nissin Food Company has managed to diversify its food products from noodles to cereals and other products like biscuits, chocolate flake cookies and even lactobacillus drinks. Even its traditional offering, the instant noodles has been diversified into several types as cup noodles, the pillow type instant noodles, the fresh instant noodles, the thick straight noodles, and frozen types all in 450 different flavors. Innovation had always been key to product diversification and it need not be always a high-fangled high technology based development as long it gives the company a keener competitive advantage over other firms in the market (Porter, 1996). Thus, the simple idea of introducing the Nissin straight thick noodle led to increased volumes of sale in 2008.Differentiation allows a company to address the demands of consumers across a wide range of segmentation (Porter and Kramer, 2006). In its Hong Kong operations, the company has separate its products to all sectors of the population not only through diversified products but also through careful studies as to what products might have a more competitive appeal to certain sectors. Discovering for example that in their join States operations, Chow Mein noodles seemed to be the preference of Americans, the company also aimed at making this product appealing to the foreign sectors of the Hong Kong population.Finally, Nissin Food Company has always been secure in the instant noodle as its niche in manufacturing and gross revenue and primarily targeting the working population. A niche approach is basically developing greater competitive advantage in a sector or product and holding on to this advantage through differentiation and innovation strategies (Porter, 1985).Among the three, differentiation appears to be Nissin Food Companys strongest and most effective strategy, allowing it to unendingly increase its sales over the years and expand opera tions to address an ever larger share of the market. Differentiation has also allowed it to penetrate western markets such as the United States, Russia and even Mexico. In the United States, chow mein had attracted the atomise generation because of its microwavable fried noodle through innovative advertising.New products should always be based on prior arket surveys to test the levels of demand and businesses moldiness always have a clear vision and strategy for diversification, planning against the risks involved with an honest regard for the gains it expects to achieve (Ansoff, 1957). Nissin uses both related and orthogonal diversification techniques as, not contented with its traditional noodle offerings, it has innovated and expanded also to frozen foods, cereals, and nutrition drinks. Such risks have been repaid with dividends through the recent years.Conclusions and RecommendationsNissin Foods Company, Ltd. in Hong Kong faces has demonstrated a stable and strong internal com petence structure. It has managed to sustain efficiency and close coordination among the various phases of its operations, making its various departments including the management, production, marketing, and research units interlock smoothly. It is in food safety and quality standards that the company stands out among the rest of competitors in the Hong Kong market and it is highly recommended that this be made part of a comprehensive advertising strategy that packages not only products but the unblemished company itself as an environmentally friendly corporation in personal credit line with its recognized corporate responsibility to save the earth. This would be a leading promotional strategy as the company funnels through its Food refuge Research Institute, thorough investigations and research of environmentally affective chemicals, organic inputs as they affect the products of its farms, breeding stations, fisheries, feed plants, ingredient plants and its productions plants as well.The Hong Kong macro-environment also appears to be a favorable one for Nissin Foods, affording it a competitive area where the company could showcase both its traditional and innovative offerings to an ever growing and constantly differentiating and segmented population. The change in administrative governance appears not to have made a significant impact on the robustness of business competition within the region. The PESTEL environment thus could be taken as a general plus factor.It is again in the area of environmental considerations that Nissin must focus on. It is recommended that the attention must be directed toward the pollution side of its post-operational activities. By this, as extra concern on judicature of containers and on the earth-friendliness of such packaging as Nissin continues to use non-biodegradable materials in this regard. To more promote the environmental image of the firm could innovate towards the end of minimizing its bionomic footprint. On social relations, Nissin could collaborate with social and ecologic groups toward the development of programs addressing Hong Kongs expanding ecological problems of pollution as well as industrial congestion.(word count 3,823)