Asahi Glass Company:Strategy

Essay by Amit MehraUniversity, Master'sA, June 2004

download word file, 6 pages 3.0

1. Asahi Glass Company has diversified through internal growth, acquisition, and joint ventures from its origin in flat glass to broad glass-materials, chemical, and electronics manufacturer. It has also vertically integrated and expanded internally to become the leading global glass manufacturer. In 1993, Asahi Glass is reviewing its future direction, particularly whether it should divest its electronics business.

New Product Opportunities

New Glass The glass industry is the cash cow for Asahi. Although earlier the industry was designated as a mature business, industry observers viewed the future of the new glass business as rosy, expecting it to reach $20 billion by the turn of the century. Flat glass could be viewed as the company's core competency as not only was it the biggest generator of sales but also in 1992, 56% of the sales came from glass and related products.

New Glass is in the emerging growth stage. Company is moving up the 'Value Chain' in glass business and had developed number of new products in the recent past such as 'heat reflective glass' and 'double-glazing' glass units.

Asahi should definitely tap on its core competency which is flat glass and exploit opportunities in this business. This glass with distinctive characteristics will be used in mainly "high technology" industries ranging from printing to communications However to gain a competitive advantage and capitalize on existing know how, Asahi has to first determine what new glass industry comprised of. Was it glass with inherent functions or glass with improved characteristics.

Electronics In 1992, Electronics contributed only 5.6% of sales. While Asahi has a head start with equity partnerships with two firms which are among the industry leaders, it is struggling to establish a firm position in this industry due to competition from Hitachi, Toshiba and NEC with strong skills in semiconductor. I...