ACA Assignment

Nakamura Lacquer Company

Submitted to: Submitted by:

Prof. Y N Kaushal Khem Singh Chauhan

FMG 19B 191090
Summary:

Nakamura Lacquer Company is going through a phase where it has explored every possibility in
the domestic market and has reached an optimum level. Globalization of the product is a policy
decision, which needs to be taken. Practically Company has no business outside of the Japan and
to be a global brand, the company needs to exploit this market. Two American companies,
National China Company and Semmelback, Semmelback and Whittacker, have shown interest to
promote the brand in the American market. After assessing the important criteria like, company
profile, growth, marginal profit, security offered, risks involved, brand building etc. it seems
appropriate that the company forms an alliance with Semmelback, Semmelback and Whittacker
to promote its product in the global market.

Situation Analysis:

After 12 years that Young Mr. Nakamura had taken over the reins of the Nakamura Lacquer
Company, the company has conquered the domestic market. The strategy change with effective
mechanization of the trade of producing lacquer wares named the “Chrysanthemum” brand at
large volumes and effective prices bore fruit. With growth in the domestic sector attaining levels
of saturation, “globalization” was what other companies were offering to Nakamura Lacquer
Company. With the brand spreading, American companies started showing interest in starting
ventures in this domain. Two first rate companies, National China Company and Semmelback,
Semmelback and Whittacker lined up immediately, offering Mr. Nakamura, substantial growth,
valid prices, increasing brand domain and new investment opportunities.

Problem Statement:

Deciding whether to explore new territories in the global market, taking into consideration the
present opportunities and risks. The company’s own production and managerial competitiveness
to deal with the substantial growth, also is a concern for the company.

Statement of Options:

The options that Mr. Nakamura has at the present moment are:
1. To maintain a status quo, i.e. to remain focused in the domestic sector.
2. To opt for National China Company for partnership in its globalization strategy.
3. To opt for Semmelback, Semmelback and Whittacker for partnership in its globalization
strategy.
4. To opt for a Company for partnership in its globalization strategy after surveying the market
scenario itself.

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:

Globalization do seems to be the need of the hour leading to more stability and growth of the
company. Partnership with Semmelback, Semmelback and Whittacker, a company based on
marketing dinner wares, seems to be the more profitable option with higher returns, no initial
investment and brand building opportunities. Security in order quantities though is less in this
venture but the spurt of opportunities the companies are providing after market surveys, do give
out optimistic signals about the demand for lacquer wares in future.

Alternative Plan:
In case that the partnership with Semmelback, Semmelback and Whittacker fails, proper
inventory management procedure must be in place to tackle the situation (storage of goods) and
also proper funding resources must be identified to carry forward the marketing process of the
product initiated by the partnering company.

No. of Pages: 710