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Title: HETBAHN Case


1
HETBAHN Case
Technology Management and Strategy
2
HETBAHN Case
Presented by Kihoon Kim, Toikye Cho, Younghwan
Jeon
3
HETBAHN Case
4
HETBAHN Case
PART ? PART ? PART ?
5
HETBAHN Case PART I
PART ? PART ? PART ?
6
Introduction
  1. Company Overview
  2. Industry Overview
  3. Product Overview

7
Introduction
1. Company Overview
Vision Mission
Vision To become a Global Enterprise that Creates
a Healthy, Happy and Convenient Lifestyle
Mission To Create Premium Value for Customers,
Shareholders and Employees by Supplying the Best
Products and Services through the "Only One"
Spirit
CJ creates a Healthy, Happy and Convenient
Lifestyle
8
Introduction
1. Company Overview
Business Area
Food
Logistics
Entertainment
IT Infrastructure
Bio Technology
CJs business areas include food, bio, processed
food, animal feed, pharmaceuticals and
entertainment
9
Introduction
1. Company Overview
Business Performance
(April, 2010)
CJs is one of the biggest companies in food
industry in Korea
10
Introduction
1. Company Overview
Business Performance
(April, 2010)
CJs is one of the biggest companies in food
industry in Korea
11
Introduction
1. Company Overview
History before HETBAHN (1953)
19531970 Foundation and Take off
19731980 Growing into Composite Food Company
19801990 Advanced Technology Development and
Overseas Market Entry
19911995 Diversifying Independent Business
Fields
Launching Life and Culture Group 1996
12
Introduction
1. Company Overview
History before HETBAHN (19531997)
1953. 8. Founded Cheil Jedang Co., Ltd. (the
first manufacturing business of
Samsung Group) 11. Commenced sugar
manufacturing (first sugar-
producing facility of Korea) 1973. 11. Commenced
animal feed manufacturing 1975. 11. Commenced
production of Dashida 1987. 2. Founded Cheil
Frozen Food 1991. 11. Commenced life science
business 1994. 2. Entered food service
business 1996. 2. Established CGV, the multiplex
theater 1997.4. Completed official and legal
separation from Samsung
Group 1997.12.
13
Introduction
1. Company Overview
History before HETBAHN (19531997)
1953. 8. Founded Cheil Jedang Co., Ltd. (the
first manufacturing business of
Samsung Group) 11. Commenced sugar
manufacturing (first sugar-
producing facility of Korea) 1973. 11. Commenced
animal feed manufacturing 1975. 11. Commenced
production of Dashida 1987. 2. Founded Cheil
Frozen Food 1991. 11. Commenced life science
business 1994. 2. Entered food service
business 1996. 2. Established CGV, the multiplex
theater 1997.4. Completed official and legal
separation from Samsung
Group 1997.12.
HETBAHN selected as hit product in the field of
ready-to-eat processed foods at the Korea
Consumer Festival 1997 CJ General Research Center
won a prize of 1st Technology Research Center
Award from the Ministry of Science and
Technology for outstanding research performance
14
Introduction
2. Industry Overview
Ready-to-eat Processed Rice
  • Frozen Rice (1993)
  • Food businesses adopted frozen fried-rice, frozen
    rice-ball manufacturing facilities from Japan
  • Market penetration was unsuccessful due to bad
    taste
  • Retort Rice (1995)
  • Market penetration was unsuccessful due to bad
    taste

Food businesses gave constant effort to develop
ready-to-eat processed rice product to meet the
market taste The market was attracting businesses
with great potential demand
15
Introduction
2. Industry Overview
Ready-to-eat Processed Rice
  • Frozen Rice (1993)
  • Food businesses adopted frozen fried-rice, frozen
    rice-ball manufacturing facilities from Japan
  • Market penetration was unsuccessful due to bad
    taste
  • Retort Rice (1995)
  • Market penetration was unsuccessful due to bad
    taste
  • Aseptic Rice (1997)
  • Aseptic packaged rice introduced to the market by
    CJ

Food businesses gave constant effort to develop
ready-to-eat processed rice product to meet the
market taste The market was attracting businesses
with great potential demand
16
Introduction
3. Product Overview
Brief History of HETBAHN
1996. 12. CJ developed Aseptic Packaging
System and launched brand new aseptic
packaged ready-to-eat processed rice,
HETBAHN. 1997. 7. CJ supplied
HETBAHN to KOREANAIR. HETBAHN began
to be served as airline food. 1997. 12. HETBAHN
recognized as the best-hit- product
from 12 newspapers.
HETBAHN had bean launched in 1996 and became a
bestselling ready-to-eat processed food in 1997
17
Motivation of Innovation
  1. Demographic Changes
  2. New Knowledge

18
Motivation of Innovation
1. Demographic Changes
  • Structure of food market had been changed as
  • the number of nuclear family increased
  • the number of double-income family increased
  • Life style / Eating habits had been changed
  • The new structure of food market had created
  • massive opportunities for ready-to-eat processed
    food providers

2. New Knowledge
New Knowledge of Aseptic Packaging System brought
Changes in Perception of ready-to-eat food
product
CJ developed new technology Aseptic Packaging
System (Details follow)
(Details follow)
The Discipline of Innovation, HBR, Peter F.
Drucker (Unexpected Occurrence, Incongruities,
Process Needs, Industry Market Change,
Demographic Change, Changes in Perception, New
Knowledge)
19
Motivation of Innovation
1. Demographic Changes
  • Structure of food market had been changed as
  • the number of nuclear family increased
  • the number of double-income family increased
  • Life style / Eating habits had been changed
  • The new structure of food market had created
  • massive opportunities for ready-to-eat processed
    food providers

2. New Knowledge
New Knowledge of Aseptic Packaging System brought
Changes in Perception of ready-to-eat food
product
CJ developed new technology Aseptic Packaging
System (Details follow)
(Details follow)
The Discipline of Innovation, HBR, Peter F.
Drucker (Unexpected Occurrence, Incongruities,
Process Needs, Industry Market Change,
Demographic Change, Changes in Perception, New
Knowledge)
20
Motivation of Innovation
1. Demographic Changes
  • Structure of food market had been changed as
  • the number of nuclear family increased
  • the number of double-income family increased
  • Life style / Eating habits had been changed
  • The new structure of food market had created
  • massive opportunities for ready-to-eat processed
    food providers

2. New Knowledge
New Knowledge of Aseptic Packaging System brought
Changes in Perception of ready-to-eat food
product
CJ developed new technology Aseptic Packaging
System (Details follow)
(Details follow)
The Discipline of Innovation, HBR, Peter F.
Drucker (Unexpected Occurrence, Incongruities,
Process Needs, Industry Market Change,
Demographic Change, Changes in Perception, New
Knowledge)
21
Motivation of Innovation
1. Demographic Changes(cont.)
Increasing female employment
5-day-work-week
Microwave
68 of households owned at least one microwave in
1996. Microwave became a one of the
most popular equipment.
5-day-work-week changed the life style of the
customers. Customers started to enjoy
sports and leisure activities on weekends.
The number of female employment kept
increasing. Females role changed from
housewife to career women.
(Number of female employment)
(Proportion of microwave ownership)
32
68
Statistics Korea
Statistics Korea
The changes implies that the customers potential
demand for convenient food increased
significantly.
22
Motivation of Innovation
1. Demographic Changes(cont.)
Increasing female employment
5-day-work-week
Microwave
68 of households owned at least one microwave in
1996. Microwave became a one of the
most popular equipment.
5-day-work-week changed the life style of the
customers. Customers started to enjoy
sports and leisure activities on weekends.
The number of female employment kept
increasing. Females role changed from
housewife to career women.
(Number of female employment)
(Proportion of microwave ownership)
32
68
Statistics Korea
Statistics Korea
The changes implies that the customers potential
demand for convenient food increased
significantly.
23
Motivation of Innovation
1. Demographic Changes(cont.)
Increasing female employment
5-day-work-week
Microwave
68 of households owned at least one microwave in
1996. Microwave became a one of the
most popular equipment.
5-day-work-week changed the life style of the
customers. Customers started to enjoy
sports and leisure activities on weekends.
The number of female employment kept
increasing. Females role changed from
housewife to career women.
(Number of female employment)
(Proportion of microwave ownership)
32
68
Statistics Korea
Statistics Korea
The changes implies that the customers potential
demand for convenient food increased
significantly.
24
Motivation of Innovation
1. Demographic Changes(cont.)
Increasing female employment
5-day-work-week
Microwave
68 of households owned at least one microwave in
1996. Microwave became a one of the
most popular equipment.
5-day-work-week changed the life style of the
customers. Customers started to enjoy
sports and leisure activities on weekends.
The number of female employment kept
increasing. Females role changed from
housewife to career women.
(Number of female employment)
(Proportion of microwave ownership)
32
68
Statistics Korea
Statistics Korea
The changes implies that the customers potential
demand for convenient food increased
significantly.
25
Technology Management
  • Key Success Factors
  • Aseptic Packaging System
  • (Core Technology of HETBAHN)

26
Technology Management
1. Key Success Factors
KSFs for ready-to-eat rice product
Customer-Driven
Knowledge-Driven
Capacity-Driven
  • Brands or Customer Relations are relatively
    important
  • RD is relatively important
  • Physical capital is relatively important

Both Brand Image and RD are KSFs for CJs
ready-to-eat rice product
27
Technology Management
1. Key Success Factors
KSFs for ready-to-eat rice product
Customer-Driven
Knowledge-Driven
Capacity-Driven
  • Brands or Customer Relations are relatively
    important
  • RD is relatively important
  • Physical capital is relatively important

? Food products industry is Customer-Driven
Industry in general ? The taste of ready-to-eat
rice must be upgraded through New Knowledge
to meet the mass market
Both Brand Image and RD are KSFs for CJs
ready-to-eat rice product
28
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Frozen Rice and Retort Rice could meet only small
portion of the enormous demand because of BAD
TASTE
Aseptic Packaged Ready-to-Eat Rice which tastes
just like home-made rice
CJ could meet the massive market with the new
product which provides outstanding taste
Potential customer demand for Ready-to-Eat Rice
29
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Frozen Rice and Retort Rice could meet only small
portion of the enormous demand because of BAD
TASTE
Aseptic Packaged Ready-to-Eat Rice which tastes
just like home-made rice
CJ could meet the massive market with the new
product which provides outstanding taste
Potential customer demand for Ready-to-Eat Rice
30
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Innovative Packaging Process Aseptic Packaging
31
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Innovative Packaging Process Aseptic Packaging
1. Clean Room HETBAHN factory is managed as
clean as semiconductor factories Number of
particles of dust 100/ft2 (Normally there exist
20,000 particles of dust/ft2 in the air)
2. Inspection 3-hour-cleaning must be conducted
everyday If any problem occurs All the
processes must be stop immediately until the
problem gets identified and removed
3. UV Sterilization All the packages must be
sterilized with UV
32
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Innovative Packaging Process Aseptic Packaging
1. Clean Room HETBAHN factory is managed as
clean as semiconductor factories Number of
particles of dust 100/ft2 (Normally there exist
20,000 particles of dust/ft2 in the air)
2. Inspection 3-hour-cleaning must be conducted
everyday If any problem occurs All the
processes must be stop immediately until the
problem gets identified and removed
3. UV Sterilization All the packages must be
sterilized with UV
33
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Innovative Packaging Process Aseptic Packaging
1. Clean Room HETBAHN factory is managed as
clean as semiconductor factories Number of
particles of dust 100/ft2 (Normally there exist
20,000 particles of dust/ft2 in the air)
2. Inspection 3-hour-cleaning must be conducted
everyday If any problem occurs All the
processes must be stop immediately until the
problem gets identified and removed
3. UV Sterilization All the packages must be
sterilized with UV
4. Vacuum-packing Packaged rice gets cooled in
cold water for 15minutes No preservative is
needed because the rice is vacuum-packed
34
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Innovative Packaging Process Aseptic Packaging
No Preservative No Extreme Heating No
Freezing No Dehydration
HETBAHN can be stored in room temperature for 6
month, doesnt have to be kept in freezer, and
delivers the Great Taste just like home-made rice!
35
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Aseptic Rice
Frozen Rice
Retort Rice
Aseptic Packaging System provides outstanding
taste
36
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Aseptic Rice
Frozen Rice
Retort Rice
Freeze cooked rice from 40? to below 0 ? Can
be stored for an year in a freezer
Heat cooked rice to over 100 ? for
sterilization Can be stored in room temperature
for an year
Seal the cooked like in room temperature Can be
stored in room temperature for 6 months
Aseptic Packaging System provides outstanding
taste
37
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Aseptic Rice
Frozen Rice
Retort Rice
Freeze cooked rice from 40? to below 0 ? Can
be stored for an year in a freezer
Heat cooked rice to over 100 ? for
sterilization Can be stored in room temperature
for an year
Seal the cooked like in room temperature Can be
stored in room temperature for 6 months
Aseptic Packaging System provides outstanding
taste
38
Technology Management
2. Aseptic Packaging System (Core Technology of
HETBAHN)
Aseptic Rice
Frozen Rice
Retort Rice
Freeze cooked rice from 40? to below 0 ? Can
be stored for an year in a freezer
Heat cooked rice to over 100 ? for
sterilization Can be stored in room temperature
for an year
Seal the cooked rice in room temperature Can be
stored in room temperature for 6 months
Aseptic Packaging System provides outstanding
taste
39
Timing of Entry
  1. First-Mover Disadvantages
  2. Overcoming Disadvantages
  3. First-Mover Advantages

40
Timing of Entry
1. First-Mover Disadvantages
Uncertainty of Customer Requirements
High Development Expenses
CJ was the first mover of the Aseptic Packaged
Ready-to-Eat Rice market and had to face
first-mover disadvantages
41
Timing of Entry
1. First-Mover Disadvantages
Uncertainty of Customer Requirements
High Development Expenses
  • Previous Ready-to-Eat Rice products failed to
    penetrate the market due to the bad taste.
  • The failure of the frozen rice and retort rice
    established negative customer perception of
    Ready-to-Eat rice product.
  • Aseptic Packaging System required huge amount of
    initial cost for establishing the facility.
  • The new process required high cost of maintenance
    for keeping the cleanness.
  • RD for Aseptic Packaging system took 2 years

CJ was the first mover of the Aseptic Packaged
Ready-to-Eat Rice market and had to face
first-mover disadvantages
42
Timing of Entry
1. First-Mover Disadvantages
Uncertainty of Customer Requirements
High Development Expenses
  • Previous Ready-to-Eat Rice products failed to
    penetrate the market due to the bad taste.
  • The failure of the frozen rice and retort rice
    established negative customer perception of
    Ready-to-Eat rice product.
  • Aseptic Packaging System required huge amount of
    initial cost for establishing the facility.
  • The new process required high cost of maintenance
    for keeping the cleanness.
  • RD for Aseptic Packaging system took 2 years

CJ was the first mover of the Aseptic Packaged
Ready-to-Eat Rice market and had to face
first-mover disadvantages
43
Timing of Entry
2. Overcoming Disadvantages
Marketing 4P
Product
Price
Outstanding taste Convenient storage
Competitive price (1050won) compare to a bowl of
rice served in restaurants (around 1000won)
Promote
Place
Concentrated displays in convenience stores in
urban area
TV advertisements Offering free samples
CJ overcame first-mover disadvantages through
Marketing 4P
44
Timing of Entry
3. First-Mover Advantages
Brand Loyalty
Reaping Increasing Returns
CJ was the first mover of the Aseptic Packaged
Ready-to-Eat Rice market and enjoyed the
first-mover advantages
45
Timing of Entry
3. First-Mover Advantages
Brand Loyalty
Reaping Increasing Returns
  • Achieved 91 brand awareness in only 1 year from
    the launching
  • HETBAHN became a BYWORD for ready-to-eat rice
  • Attained 15,000,000,000won annual revenue in 3
    years from the launching

(Brand awareness Ready-to-eat rice)
9
(Market sales of HETBAHN)
91
HETBAHN report, 2000
SERI, 2005
CJ was the first mover of the Aseptic Packaged
Ready-to-Eat Rice market and enjoyed the
first-mover advantages
46
Timing of Entry
3. First-Mover Advantages
Brand Loyalty
Reaping Increasing Returns
  • Achieved 91 brand awareness in only 1 year from
    the launching
  • HETBAHN became a BYWORD for ready-to-eat rice
  • Attained 15,000,000,000won annual revenue in 3
    years from the launching

(Brand awareness Ready-to-eat rice)
9
(Market sales of HETBAHN)
91
HETBAHN report, 2000
SERI, 2005
CJ was the first mover of the Aseptic Packaged
Ready-to-Eat Rice market and enjoyed the
first-mover advantages
47
Types of Innovation
  1. Types of Innovation

48
Types of Innovation
Product Process Innovation
Convenience
Taste
PRODUCT CJ produced new product which could
bring outstanding taste to the customers
PROCESS CJ implemented new process which could
produce ready-to-eat rice in room temperature
HETBAHN Product Innovation Process Innovation
49
Types of Innovation
Product Process Innovation
Convenience
Taste
PRODUCT CJ produced new product which could
bring outstanding taste to the customers
PROCESS CJ implemented new process which could
produce ready-to-eat rice in room temperature
HETBAHN Product Innovation Process Innovation
50
Types of Innovation
Radical Competence Destroying Innovation
RADICAL HETBAHN was the first product which was
manufactured through aseptic packaging system
COMPETENCE DESTROYING Aseptic packaging system
made previous CJs ready-to-eat rice packaging
system obsolete. It was entirely new technology.
HETBAHN Radical Innovation Competence
Destroying Innovation
51
Types of Innovation
Radical Competence Destroying Innovation
RADICAL HETBAHN was the first product which was
manufactured through aseptic packaging system
COMPETENCE DESTROYING Aseptic packaging system
made previous CJs ready-to-eat rice packaging
system obsolete. It was entirely new technology.
HETBAHN Radical Innovation Competence
Destroying Innovation
52
Stakeholder Model
  1. Stakeholder Analysis

53
Stakeholder Model
1. Stakeholder Analysis
Benefits of HETBAHN
Stakeholders who are better off with
HETBAN Stockholders, Suppliers, Government,
Customers
54
Stakeholder Model
1. Stakeholder Analysis
Benefits of HETBAHN
Stockholders (More Earning per Share)
Government (Reducing Cost of Government-stock
rice)
Suppliers (Increasing Demand)
Customers (Tasty Ready-to-Eat Rice)
Stakeholders who are better off with
HETBAN Stockholders, Suppliers, Government,
Customers
55
HETBAHN Case PART II
PART ? PART ? PART ?
56
Analysis of Technology Diffusion
  • Market Growth Brand Image
  • Technology S-Curve

57
Analysis of Technology Diffusion
1. Market Growth Brand Image
Market Sales of CJ HETBHAN
Perceived Brand Image Rate
- 2005 seri, CJ
- 2005 seri, CJ
The sales increased 30 40 every year
Brand image of CJ HETBHAN was overwhelming
HOWEVER!(cont.)
Market sales of HETBAHN increased consistently
with high growth rate The brand image of HETBHAN
was the best in the market
58
Analysis of Technology Diffusion
1. Market Growth Brand Image
Market Sales of CJ HETBHAN
Perceived Brand Image Rate
- 2005 seri, CJ
- 2005 seri, CJ
The sales increased 30 40 every year
Brand image of CJ HETBHAN was overwhelming
HOWEVER!(cont.)
Market sales of HETBAHN increased consistently
with high growth rate The brand image of HETBHAN
was the best in the market
59
Analysis of Technology Diffusion
2. Technology S-Curve
Sales of Aseptic Packaged Rice Market
1. Adoption is initially slow because the product
is unfamiliar 2. Adoption accelerates as the
product becomes well understood 3. Eventually
market is saturated and the rate of new adoptions
declines
1400
1200
1000
800
S-curve of diffusion
600
400
200
0
1997
1999
2001
2003
2005
The market growth rate DECREASED
- CJ survey
The market of aseptic packaged rice became
saturated
60
Analysis of Technology Diffusion
2. Technology S-Curve
Market Share in Aseptic Packaged Rice
Sales of Aseptic Packaged Rice Market
1400
1200
1000
800
S-curve of diffusion
600
400
200
0
1997
1999
2001
2003
2005
The market growth rate DECREASED
The market share of HETBAHN DECREASED
- 2005 YTN news
- CJ survey
The market share of HETBHAN constantly decreased
61
Analysis of Technology Diffusion
2. Technology S-Curve
time
Saturation The growth of market almost finish
Entering The product Becomes perceived
Growing Power of brand image becomes strong
CJ had to deal with the threat of competitors and
decreasing market growth rate
62
Analysis of Technology Diffusion
2. Technology S-Curve
Market growth rate decreased
Threat of competitors Decreasing market growth
rate
?
Threat of competitors
time
Saturation The growth of market almost finish
Entering The product Becomes perceived
Growing Power of brand image becomes strong
CJ had to deal with the threat of competitors and
decreasing market growth rate
63
Implemented Strategies
  • Protecting Innovation
  • Changing the Rule of Competition
  • Individualized Strategies for Competitors

64
Implemented Strategies

1. Protecting Innovation
Trade Mark
  • HETBHAN became a BYWORD for aseptic processed
    rice
  • The name, HETBHAN, distinguished the product
    from the others

CJ protected the right to use the name, HETBHAN
Patents registered Korean Intellectual Property
Office
65
Implemented Strategies

1. Protecting Innovation
Trade Mark
  • HETBHAN became a BYWORD for aseptic processed
    rice
  • The name, HETBHAN, distinguished the product
    from the others

TRADE MARK
Patents registered in KIPO
PATENT

CJ registered 16 patents to protect the name
HETBHAN
CJ protected the right to use the name, HETBHAN
Patents registered Korean Intellectual Property
Office
66
Implemented Strategies
2. Changing the Rule of Competition
Previous rule of competition
TASTE - As the technology of Aseptic processed
rice spread out, the taste of competitors
ready-to-eat rice became almost the same BRAND
IMAGE - Consumers bought HETBAHN based on brand
image at the first. However, the brand image
slowly became less influential.
67
Implemented Strategies
2. Changing the Rule of Competition
Previous rule of competition
TASTE - As the technology of Aseptic processed
rice spread out, the taste of competitors
ready-to-eat rice became almost the same BRAND
IMAGE - Consumers bought HETBAHN based on brand
image at the first. However, the brand image
slowly became less influential.
To survive in the fierce competition, CJ
changed the rule of competition!
New rule of competition
VARIETY in CUSTOMER OPTION - CJ expanded the
product line and started to provide derivative
products of HETBAHN
68
Implemented Strategies
2. Changing the Rule of Competition
Different size
Rice soup
Rice with sauce
Rice with soup
People who eat more or less than 200g
People who want to eat rice soup
10s and 20s
30s and 40s
target
200g is too much or too small
For breakfast
For lunch or dinner
For breakfast or dinner
situation
8801880 won
price
2430 won
2430 won
2540 won
By providing variety in customer option, CJ
tried to capture more customers
69
Implemented Strategies

2. Changing the Rule of Competition
How often does customer buy ready-to-eat rice?
When does customer want ready-to-eat rice?
- CJ survey (N211)
- CJ survey (N211)
provide VARIETY in CUSTOMER OPTION
CJ tried to expand the market of ready-to-eat
rice
70
Implemented Strategies
3. Individualized Strategies for Competitors
Threat 1 NONGSIMs low price products
Provide low-price-package of HETBAHN
Alliance with Joennam rice association
Threat 2 DONWON FBs High quality rice
The individualized strategies implemented to deal
with the threats
71
Analysis of the company
  • SWOT analysis
  • Five forces analysis
  • Value Chain analysis
  • BCG analysis

72
Analysis of the Company
1. SWOT Analysis
Strength
Weakness
SWOT
Opportunities
Threats
73
Analysis of the Company
1. SWOT Analysis
Strength
Weakness
  • Price of rice varies
  • Negative perception of instant food
  • Accumulated knowledge knowhow
  • Powerful brand image
  • Rice is essential food

SWOT
Opportunities
Threats
74
Analysis of the Company
1. SWOT Analysis
Strength
Weakness
  • Price of rice varies
  • Negative perception of instant food
  • Accumulated knowledge knowhow
  • Powerful brand image
  • Rice is essential food

SWOT
  • Competitors
  • Economic recession
  • Regulations (Plastic Package)
  • Microwave is available everywhere
  • Increasing female employment
  • Modern life style too busy to cook
  • Increasing export

Opportunities
Threats
75
Analysis of the Company
2. Five Forces Analysis
High
Potential Entrance
Low
Bargaining power of suppliers
Bargaining power of buyers
Existing Rivalry
Threats of substitutes
76
Analysis of the Company
2. Five Forces Analysis
High
Potential Entrance
  • Korean food companies
  • Foreign companies

Low
Bargaining power of suppliers
Bargaining power of buyers
Existing Rivalry
  • Many companies were already involved in the
    market of aseptic processed rice

Threats of substitutes
  • Fast foods(such as hamburger, sandwich, kimbab,
    instant noodle etc)

77
Analysis of the Company
2. Five Forces Analysis
High
Potential Entrance
  • Korean food companies
  • Foreign companies

Low
Bargaining power of suppliers
Bargaining power of buyers
Existing Rivalry
  • Many companies were already involved in the
    market of aseptic processed rice
  • Plenty of farms were available for supply
  • CJ already had good brand image and customer
    royalty

Threats of substitutes
  • Fast foods(such as hamburger, sandwich, kimbab,
    instant noodle etc)

78
Analysis of the Company
2. Five Forces Analysis
High
Potential Entrance
  • Korean food companies
  • Foreign companies

Low
Bargaining power of suppliers
Bargaining power of buyers
Existing Rivalry
  • Many companies were already involved in the
    market of aseptic processed rice
  • Plenty of farms were available for supply
  • CJ already had good brand image and customer
    royalty

Threats of substitutes
  • Fast foods(such as hamburger, sandwich, kimbab,
    instant noodle etc)

79
Analysis of the Company
3. Value Chain Analysis
80
Analysis of the Company
3. Value Chain Analysis
Procurement, technological development and
marketing sales mostly contributed for the
HETBHANS competitive advantage
81
Analysis of the Company
3. Value Chain Analysis
Procurement, technological development and
marketing sales mostly contributed for the
HETBHANS competitive advantage
Primary activities
  • Technological development
  • - The Aseptic packaging technology made the
    product delicious
  • Marketing Sales
  • - The active marketing strategy increased the
    sales and raised the brand image

Support activities
  • Procurement
  • -The self rice-polishing facility of CJ improved
    the quality of HETBHAN.

82
Analysis of the Company
3. Value Chain Analysis Technological
Development
Aseptic packaging technology
Multi-layer plastic package technology
The aseptic technology improved the taste of
ready-to-eat rice radically The multi-layer
technology extended the expiration date
significantly
83
Analysis of the Company
3. Value Chain Analysis Marketing Sales
Online Event
Off Line Event
TV Advertisement
Various marketing activities enhanced the brand
image and increased the sales
84
Analysis of the Company
3. Value Chain Analysis - Procurement
- 2008.03.17 ??? ??
The procurement system of CJ contributed for
outstanding taste of HETBHAN
85
Analysis of the Company
3. Value Chain Analysis - Procurement
- 2008.03.17 ??? ??
CJ was the only one (ready-to-eat rice
manufacturing) company in Korea which had a self
polishing system to polish raw rice. CJ could use
fresh rice to manufacture HETBAHN.
The taste of rice starts to go bad right after
get polished
The procurement system of CJ contributed for
outstanding taste of HETBHAN
86
Analysis of the Company
4. BCG Analysis
Position of HETBAHN on BCG Matrix Star
87
Analysis of the Company
4. BCG Analysis
HETBHAN
It had largest market share and its market had
great potential to grow
Position of HETBAHN on BCG Matrix Star
88
HETBAHN Case PART III
PART ? PART ? PART ?
89
Suggestion
  • Five Forces Analysis
  • SWOT Analysis
  • TOWS Analysis
  • 3-Phase Future Strategy
  • Balanced Scorecard

90
Suggestion
1. Five Force Analysis
Porters Five Force model 2010
External Analysis
91
Suggestion
1. Five Force Analysis
Porters Five Force model 2010
External Analysis
92
Suggestion
1. Five Force Analysis
Porters Five Force model 2010
External Analysis
93
Suggestion
1. Five Force Analysis
Porters Five Force model 2010
Degree
High
Middle
Low
External Analysis
94
Suggestion
1. Five Force Analysis
Porters Five Force model 2010
Degree
High
Middle
Low
External Analysis
95
Suggestion
2. SWOT Analysis
SWOT Analysis 2010
Internal Analysis
96
Suggestion
2. SWOT Analysis
SWOT Analysis 2010
  • Powerful brand image
  • Diversified distribution channel
  • First mover advantages
  • Both B2B sales and B2C sales
  • Expensive price
  • Negative perspective for instant food

Internal Analysis
97
Suggestion
2. SWOT Analysis
SWOT Analysis 2010
  • Powerful brand image
  • Diversified distribution channel
  • First mover advantages
  • Both B2B sales and B2C sales
  • Expensive price
  • Negative perspective for instant food
  • Decreasing brand power
  • Increasing bargaining power of suppliers and
    buyers
  • Overseas demand
  • Increasing employment rate of women

Internal Analysis
98
Suggestion
3. TOWS Analysis
TOWS Analysis 2010
Suggested Strategies
99
Suggestion
3. TOWS Analysis
TOWS Analysis 2010
Suggested Strategies
100
Suggestion
3. TOWS Analysis
TOWS Analysis 2010
Suggested Strategies
101
Suggestion
3. TOWS Analysis
Priorities
we give priorities to the strategies in TOWS
analysis
Suggested Strategies
102
Suggestion
3. TOWS Analysis
Priorities
we give priorities to the strategies in TOWS
analysis
3
2
1
Suggested Strategies
103
Suggestion
3. TOWS Analysis
Future Strategy
Overseas market has great potential China,
Japan, India etc.
Future Strategy Glocalization
104
Suggestion
3. TOWS Analysis
Future Strategy
CJ should become glocalized and provide localized
products to global customers
For glocalization, decentralized RD will be
helpful for better performance. Decentralized
RD can better understand local consumers needs
and culture.
Future Strategy Glocalization
105
Suggestion
3. TOWS Analysis
Future Strategy
CJ should become glocalized and provide localized
products to global customers
For glocalization, decentralized RD will be
helpful for better performance. Decentralized
RD can better understand local consumers needs
and culture.
Future Strategy Glocalization
106
Suggestion
4. 3-Phase Future Strategy
  • Decentralized RD for new product and focus on
    glocalization
  • Contact actively with many institutes and
    companies to increase B2B sales
  • Attain price competitiveness through B2B sales
    strategy

Financial Stability
107
Suggestion
4. 3-Phase Future Strategy
  • Focus on securing its high quality and
    luxurious brand image through various promotions
  • Strategic collaboration with the competitors
  • Decentralized RD for new product and focus on
    glocalization
  • Contact actively with many institutes and
    companies to increase B2B sales
  • Attain price competitiveness through B2B sales
    strategy

Financial Stability
108
Suggestion
4. 3-Phase Future Strategy
  • Decentralized RD for new product and focus on
    glocalization
  • Contact actively with many institutes and
    companies to increase B2B sales
  • Attain price competitiveness through B2B sales
    strategy
  • Focus on securing its high quality and
    luxurious brand image through various promotions
  • Strategic collaboration with the competitors
  • Penetrate Chinese market with Korea 1 brand
    image
  • Diversify the product distribution channel

Financial Stability
109
Suggestion
5. Balanced Scorecard
Balanced Scorecard
110
Suggestion
5. Balanced Scorecard
Balanced Scorecard
111
Reference
Strategic Management of Technological Innovation
3rd Edition, Melissa Schilling HBR casestudies
for Technology Management , POSMIT Pub, 2010 Food
News www.foodnews.co.kr CJ cooperation
www.cj.net Hetbahn Homepage www.hetbahn.co.kr Sams
ung Economic Research Institute www.seri.org
Statistics Korea www.kostat.go.kr
112
EOD
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