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Ajinamoto

In: Business and Management

Submitted By yahleeni92
Words 1210
Pages 5
Ajinomoto (Malaysia) Berhad is established in 1961 as Ajinomoto (Malaya) Co., and becomes a public company in 1968. They celebrated their 50th Anniversary in 2011. It’s engaged in manufacturing and selling of monosodium glutamate (MSG) and other related products. The taste of Ajinomoto is based on five basic tastes which include sweetness, sourness, bitterness, saltiness and umami (savoury taste). Ajinomoto (M) Berhad operation divides into two segments which are Umami segment and food and seasoning segment.

Ajinomoto (Malaysia) Berhad had analysed based on Porter's Five Forces of Profitability.

1) ENTRY
Ajinomoto Company is based on marketing and production of MSG. It is a well-established brand with strong reputation and high brand equity. It has a strong financial position and nearly 25,000 employers are working in Ajinomoto (Malaysia) Berhad. It has wide economic scale which includes import and export (Singapore, Mauritius, Peru, and New Zealand). Ajinomoto Malaysia Berhad defined as Monopolistic Competition Market. Although there are many companies related to seasonings, there is no perfect substitute for Ajinomoto(Malaysia) Berhad because of its umami taste. This company has low treat of new entrants due to high entry barriers and involves large capital. Ajinomoto didn’t rely on one product only. Time to time it continues R&D and produce more seasoning related products. 2) POWER OF INPUT SUPPLIERS
Powerful suppliers capture more of the value for themselves by charging higher prices, limiting quality or services, or shifting costs to industry participants. Powerful suppliers including suppliers of labours can squeeze profitability out of an industry that is unable to pass on cost increases in its own prices. Ajinomoto as their motto “Eat well, live well” has a strong desire “to create better lives globally by contributing to significant advances in Food and Health and by working for Life. Ajinomoto Group also uses original ingredients and technologies for health and life. Since then, the Ajinomoto Group has continued to work for the advanced research and development of amino acids – the origin of our company’s establishment and one of the sources of life – and has developed novel technologies related to biotechnology, chemistry, pharmacology, food science, analytical chemistry and others. (Good relations with Suppliers) 3) INDUSTRY RIVALRY
Ajinomoto staggering 90% of market shares in Malaysia. The new “TUMIX” increase the sales of Ajinomoto, and intends to reduce contribution from lower margin industrial seasoning. In industrial and retails flavour seasoning, Ajinomoto challenges industries by understanding local food culture based on the languages, national identities and value of target market. Their local staffs conduct their own research on consumers need and create product that balance flavour and quality. Ajinomoto is tailoring the markets via product development and marketing activities. They are marketing to 130 countries and regions, with no two countries sharing the exact same cooking methods, eating habits or ideas of what constitutes the best taste. In marketing and sales, Ajinomoto has created a mechanism for women to sell products at each village, in cooperation with an international NGO focused on empowering local women. Ajinomoto is committed to making products available at affordable prices, and in sizes that are convenient to use. Ajinomoto has adopted a “direct cash sales model” in areas where supermarkets are not yet common. Packaging is one of factor. Ajinomoto has adopted new packaging technologies for HON-DASHI, including thinner, lighter, smaller paper boxes, packaging design for improved transport efficiency, and caps derived from plant (biomass) materials instead of petroleum. Ajinomoto plans to improve labelling and design of transport containers. The company implemented Transport Container Design Guidelines to set rules for labelling. Adopting a new packaging design approach that starts from pallet loading efficiency, Ajinomoto set a target of over 80% efficiency. 4) POWER OF BUYERS
For a past few years, Ministry of Health was launched their campaign about healthy food where the rising number of some health issues such as undernourishment, over eating and aging population. The more knowledge the customer has about the product, the greater their bargaining power will be aware of the product’s benefits and features. Thus, its impact a company’s product and selling decision, so buyers can demand higher quality of products and can exert to lower prices. The convenience to enhance flavours offered by Ajinomoto cause the volume of buyers increasingly. In markets where the products have little to differentiate them, brand loyalty is very low. Since Ajinomoto was includes in monopolistic competition market structure, its only consists several competitors, this gives the customers lower bargaining power. Increased demand for Ajinomoto products especially in international market also influence bargaining power of buyer. This is because rising number of buyers lead to minimal control in price of buyer. Ajinomoto step ahead forward by developing product tailor to regional food cultures, making the most of umami to solve health issue and developing human resources to promote better nutrition for children in conjunction with their tagline, Eat well Live well. It also has HALAL Certified products and has SIRIM ISO 900, SIRIM ISO 1400, HACCP and OSHAS 18001 certification. (Customers Call Centre)

5) SUBSTITUTES AND COMPLEMENTS
A substitute performs the same or a similar function as an industry’s product by a different means. Availability of substitutes erodes the demand for the industry’s output. Complements boost industry demand. When the price elasticity of demand is large, pressure from substitutes will be significant. Change in demand can in turn affect internal rivalry and entry/ exit. Compliments affect profitability through the way they influence the five forces. With the strong credo and passion to propose new values to the customer for the next 100 years, it is their desire to remain as the heart of the Ajinomoto Group by listening attentively to the voice of customers as a Value Innovator. The Ajinomoto Group R&D will continue to move forward, step by step, for the sake of “Food,” “Health,” and “Life,” and seek to expand the three areas in the future, especially where “Food,” “Bioscience Products & Fine Chemicals,” and “Pharmaceutical & Health” overlap. (Price of competitors)

DUE DILIGENCE AND MARKET RESEARCH
Ajinomoto (M) Berhad makes possible effort through legal to protect its intellectual property and other rights in its business. These efforts include cooperating with suppliers on CSR procurement other than protecting and properly using intellectual property through trademark education and compensation for inventions. CSR procurement responsible to issue such as human rights and labor safety across raw materials producing regions and supply chain to ensure sustainable and stable procurement now and future. Meanwhile trademark education enhanced employee appreciation of trademarks and prevent Ajinomoto trademark from being used by the other party; compensation for inventions pays for patent applications for an invention.
Three methods being used in identifying the market situation of Ajinomoto (M) Berhad: * BCG GROWTH SHARE MATRIX
As Ajinomoto’s products are in high growth markets with high market share, its products locate in the Star category.

* MARKET SEGMENTATION.
Ajinomoto also divides its customers through geographic segmentation (Asia, The Americas and Europe, and Africa), demographic segmentation (occupation and income) and behavioral segmentation (loyalty status).

* CUSTOMERS’ FEEDBACKS.
Ajinomoto also increase customer satisfaction by respond earnestly to complaints. As a result, more than 90% of customers who received a follow-up contact in fiscal 2013 indicated that they would continue to purchase products manufactured by Ajinomoto Co., Inc.…...

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