Company
Background:
Yakult is a Japanese probiotic milk-like
product which is made by fermenting a mixture of skimmed milk with a special
strain of the bacterium Lactobacillus casei Shirota. It was created by Minoru
Shirota. Yakult started their business in 1969 in Hong Kong. In the beginning,
the plant was located at Kwun Tong and now the factory is at Tai Po. Sumiya
Hori is the current chairman in headquarter.
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Question List:
1. How can your company deal with the increasing customer demand in
China? How do you plan for your production forecast?
Yakult
owns 4 plants (excluding the one in Hong Kong) in China. Two are located in Guangzhou, One is in Shangha
and one is in Tianjin. As the headquarters see the demand in China market, the
second plant in Guangzhou starts working on 16-4-2014 but the management team has not plan
to open the fifth plant now.
There
are some experts in a department to forecast the daily, weekly, or periodic
demand based on the past sale data.
2. With more intensive competition from similar
probiotic products from mainland and other Asia countries, what are the
strategies for Yakult to keep its competitiveness?
Although
there are more competitors entering the market, Yakult has competitive
advantage. The company has a very good brand image and the product has strong
unique characteristics – containing Lactobacillus
casei strain Shirota. This bacterium has its unique
function which is benefit to the intestinal system of human body. What Yakult
needs to do is to maintain its brand image and stay focus on it.
3. Will you consider providing more varieties of
products?
Actually,
Yakult produces one type of health tea, cosmetics and drugs (for cancer) too
but we rarely see them. The company has no plan to produce one new type of
drink in short run as there are only three production lines in Hong Kong plant
and the production limit is utilized. It is difficult for Yakult to a new
product line now.
4. Why don’t Yakult develop a new product with
other flavor?
There
are mainly two reasons Yakult only provide one flavor in Hong Kong.
The
first reason is that the selling point of Yakult drink is “healthy drink” to
help to maintain intestinal health. It is not necessary to provide a number of
flavors.
The
second reason is the production limit. As the three production lines in Hong
Kong plant utilize the production limit, it is difficult to increase the
production limit in short term.
5. Yakult can keep longer than in the past. What is the reason behind?
There
are many successful factors in Yakult so that the company can be sustainable.
First,
Yakult take a good advantage of a long history of 46 years in Hong Kong and 80
years in Japan. The company build up a good image and word of mouth.
Also,
the company has the patent of bacterium Lactobacillus casei Shirota which makes
the product has unique feature and hard to substitute.
6. As the customer demand of mainlander increases, how do Yakult control its
production process efficiently?
To
keep the drinks fresh, the production lines in a plant only supply the nearby
regions. There are 4 plants in mainland China now. The plant in Hong Kong is only responsible for Hong
Kong and Macau market rather than mainland. It will not increase the production
pressure in Hong Kong because of the increasing demand in mainland. The
experienced experts will look the past data and determines the a optimal
production amount to minimize the choice of excess supply.
7. How do you forecast the market demand under the condition of
decentralized sales in numerous distribution networks?
The
experts will use some computer software to estimate the daily or seasonal
demand by different historical data such as the sale data. The computer system
can review the weather and the average sales quantity to forecast too. Then, the experienced production
managers will determine the production amount and the amount transported to
different regions in Hong Kong.
8. There are lots of favours in different regions except Hong Kong only got
2 favours in total. What is your product strategy in dealing with customers in
Hong Kong?
Hong
Kong Yakult’s top management decides to produce 2 favors based on their business
experience and market research. Also the current production plant in Hong Kong
cannot afford to produce one more type of favor.
9. How do you manage the fluctuation in demand
to your production resulted by the large volume of purchase from the
mainlanders especially the parallel traders?
Yakult
produces a certain amount of products in a certain day or season based on the
experts’ analysis. The mainlanders should not affect the supply in Hong Kong as
there are 4 plants in mainland now. To open a new plant in China, Yakult must
compare the cost and benefit. The top management team has no plan to open a new
one now.
10. To cope with the huge demand from mainland
China, do you consider making some new changes in your logistics/ distribution
network, such as providing online purchase to mainland people?
No,
Yakult has no plan to provide online purchase in China market because the
Yakult have to remain specific condition in order to keep probiotics alive. The
drinks are produced every day and transported to the nearby regions. Online
purchase may affect the freshness of the drinks. Also, it needs capital and
resources investment, the company need balance the cost and benefit.
11. There are many similar products in the existing market, how can you
differentiate yourself with those products?
Lactobacillus
casei strain Shirota make Yakult’s drink has a unique product feature that
other competitors cannot provide. The company has a significant product image
and good word of mouth.
Sources Of Reference:
China Yakult’s
official website:
http://www.yakult.com.cn/
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