Submitted to: Submitted by:

Prof. Y N Kaushal Ankita Sehjpal FMG 19B 191076

ACA

Case

Summary

The Nakamura lacquer company of Kyoto, Japan making lacquer for the daily table use with Chrysanthemum brand became bestselling brand in japan. But practically Company has no business outside of the Japan and to be a global brand, so it’s require to expanding Nakamura Lacquer Company business outside Japan. U.S. could be big market for Nakamura “Chrysanthemum” product. In this situation Mr Nakamura received offer in rapid sequence from two visitor of the U.S.

Situation analysis

Mr Nakamura had taken over his old family business in that height where his lacquer demand reached 5 lakh sets in domestic market. His brand Chrysanthemum has become Japan’s best known and bestselling brand with good quality, middle class, and dependable. Now he wants to expand his business in abroad .But as the rule, Japanese government does not allow anyone to invest in abroad. Outside of Japan however, Mr Nakamura did no business, except for selling occasionally to American tourists through his established Japanese outlets such as the big

departmental stores & therefore Mr Nakamura needed to expand his market. Mr Nakamura received two good offers from United State companies, which are building a dilemma in front of him to accept which offer.

PROBLEM STATEMENT:

Mr Nakamura has to make a decision whether he should go with first offer or second offer. Also he has to decide whether to explore new territories in the global market, taking into consideration the present opportunities and risks.

STATEMENT OF OPTIONS:

Mr Nakamura has three options;

(1) He should sign a deal with National China Company (2) He should sign a deal with Semmelback, Semmelback and Whittacker (3) He should continue his business and expand in that market without sign a deal.

EVALUATION OF OPTION:

If he makes a deal with National China Company:

There is no global representation of his brand. He has to supply with Rose and Crown trademark and he can’t sell with his own brand

Chrysanthemum. So after the end of 3 year Mr Nakamura's company might have to restart all business again.

The cost has to be endured by Mr Nakamura himself. The profit margin will increase by 5%.

If he makes a deal with Semmelback, Semmelback and Whittacker:

There is a global promotion and representation of his brand “Chrysanthemum” in U.S. market, which will enhance the market of Chrysanthemum.

There is no risk. Time duration of contract is 5 years, which is a long term investment for Nakamura

Lacquer Company. The company is willing to pay the full cost of introduction for the next two years for

introduction and promotion with budget $ 1,500,000.

If he is conservative and doesn’t want to lose anything then he should go with 3rd option. Where he will concentrate in his domestic market and try to improve that market and profit. But in this case product will not get the brand image in the global market and profit margin will be limited.

RECOMMENDATION:

After evaluation of option it is recommended that Mr Nakamura should sign deal with “Semmelback, Semmelback and Whittacker, Chicago “, because this is a long term profit deal. He is able to promote his own brand in international market and there is no introductory cost by Mr Nakamura.

ALTERNATIVE PLAN:

He has to see whether he is able to produce the required demand or not because it is expected that demand will be around 2 million per year within five year and if he is not able to produce then he will lose the opportunity cost. If anyhow he is not able to make this deal profitable then he should not leave his original customers of Japan. He should focus on his domestic market and try to overcome that loss which he bears in that deal.

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