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Written Analysis and Communication

Individual Assignment No. 1
Case Analysis Report on
The Structure of a Business Decision

Submitted by:
Name: Vijay Premani
Roll No: 141162
Section: A
Batch: MBA (FT), 2014-2016

Institute of Management, Nirma University

Date of Submission: 23/07/2014

Executive Summary
We began with understanding and analysing situation which is
nothing but how to stabilise what we have and also explore growth
opportunities for Nakamura lacquer company, based on our analysis
we came up with a problem statement which helped us understand
what the real problem is, in order to correct and address the
problem we first decided what our objectives were and then came
up with available options that would help us meet our objectives in
the best possible manner, later after evaluating various options we
finalized on one i.e. to join hands with Mr. Walter and also, we
recommended a backup plan which is to explore opportunities
within Japan.

Situation Analysis
This case revolves around Mr. Nakamura who is the owner of the brand
Chrysanthemum under Nakamura Laquer Company based in Kyoto, Japan. Mr.
Nakamura started handling their family business in the year 1948 and turned it
into Japans best known and bestselling brand that is known for good quality,
dependable Lacquer ware. Nakamura built a substantial business employing
several thousand men and produced 500,000 sets of laquer table ware every
year. However, Nakamura could only sell his product to some tourists via
department stores, except that, Nakamura did no business outside Japan. Mr.
Nakamura was not being able to market their products outside Japan due to legal
issues; he had two highly recommended visitors from the US with best
credentials. Each made an offer to Mr. Nakamura about how they can help him
sell his products in the US. Mr. Phil Rose- VP Marketing with the largest
manufacturer of dinner ware in the US National China Company that had 30%
market share in the US offered to place firm order of 400,000 sets of laquer
dinner ware at 5% more which should be delivered to them in Japan itself
however the sets should be made under their brand name Rose & Crown and
also they would not sell to anyone else in the US. On the other hand Mr. Walter
Semmelbach from Semmelbach and Whittacker Chicago, which is the largest
supplier of hotel and restaurant supplies in the US and also into buying of dinner
ware for a number of department stores offered to introduce Japanese laquer
ware in the US. They estimated market of 600,000 sets per annum and expected
it to grow to millions in 5 years. They promised to make the initial investment of
$1500000 in promotion and marketing of the brand in return they asked for
standard representation of their brand for 5 years on commission basis which
would be 20% of total sales, i.e. roughly Mr. Nakamuras profit margin.

Mr. Nakamura now has to take a decision on how to grow their business and
cross national boundaries, also he has to decide if he wants to accept one of the
two proposals.

Problem Statement
Major concerns of Mr. Nakamura which needs to be addressed are stability
of his organization and growth platform which he has to choose, as he
cant invest outside Japan directly, he has to consider one of the available
options to expand and grow his business in Japan and other countries.

Objectives

To stabilize growth of the company.

To enter new markets by introducing different variants and entering
new domains.
To maximize market share and profit margin.
To enter new territories for trade, both within and outside border.
To increase brand awareness and brand recall in Japan and introduce
brand in other countries.
To preserve emotional value attached with the company.
To work on and improve customer relations and loyalty.

Options

1) To accept the offer made by Mr. Phil Rose

2) To accept the offer made by Mr. Walter Semmelbach
3) To stick to the market in Japan only and explore new opportunities in
terms of product diversity, new variants and work towards
increasing market share within Japan.
4) To continue with existing business and work on stabilizing what is
already there.

Evaluation of Options

1) To accept the offer made by Mr. Phil Rose.

Pros

Cons

Association with a good

brand

Will not be able to

introduce their brand in
the US

Guaranteed & firm orders

Will not be able to sell to

anybody else in the US

5% Extra margin

No addition to existing
brand value

Increased production and

revenues

No awareness of brand
outside japan

Growth prospects from

increased revenues
Association with Foreign
brands
Entering B2B sector,
Increased customer base

2) To accept the offer made by Mr. Walter Semmelbach

Pros

Cons

Will be able to introduce

their brand in the US

Firm orders not guaranteed

No investment in marketing
& promotion required

Risk involved in terms of

product failure

Increased market size,

opportunities

No profits for 5 years

Increase in production in
order to meet demands

Will not be able to

associate themselves with
other companies

Will be able to preserve

emotional value attached
with the brand
Increase in brand
awareness and brand recall

3) To stick to the market in Japan only and explore new

opportunities and work in increasing market share within Japan.

Pros

Cons

Opportunity to enter new

domains and introduce new
variants

Limited awareness outside

Japan

Opportunity to increase
revenues and profit margin

Risk of functioning in
saturated market

Improve customer relations

Limited market size

4) To continue with existing business and work on stabilizing what is

already there.
Pros

Cons

Focus remains on
improving existing
business

Not being able to explore

new opportunities

Attain Stability

Limited marketing share

Internal process can be

improved

Presence limited to Japan

only
Cant tap new markets
Limited opportunities in
terms of market
expansion and growth

Decision

As per the evaluation of all the available options, best would be to

go with the second option as it helps Mr. Nakamura meet most of
the objectives that have been set and it doesnt require any
investment in marketing & branding which is generally a risk taken
by any company. The risk involved in choosing the second option is
minimum, there is a chance of product not being successful in the
market but that is one risk that every businessman has to take.

Action Plan

Conduct a research and study on credibility of Mr. Walter and their

company.
Carefully sign a contract that covers all the major issues which need
to be addressed.
Plan production well in advance in order to avoid not being able to
meet demand.
Discuss remedial actions in case of disputes and mention the same
in the contract.

Contingency Plan
If in case due to some unforeseen circumstances the chosen
decision cant be implemented, best option would be to stick with
option 3 and work within Japan.

UNDERTAKING
I, VIJAY PREMANI hereby declare that this assignment is my
original work and is not copied from anyone/ anywhere. If found
similar to other sources, I shall take complete responsibility of
the action, taken thereof by, WAC Team.

Signature
Name: Vijay Premani
Roll NO.: 141162
Section: A
Batch: MBA-FT, (2014-2016)