See's Candies

See’s Candies: Japanese Market Entry

I believe that entering the Japanese market is the right decision for See’s Candies due to several external factors. First, as of 1988, there is a tariff reduction from 35% down to about 10%. Second, the stage for chocolate demand has now been revealed by Mars, and continues to increase. Although it is three years later from this chocolate surge that See’s is facing in 1991, the market does not seem to be oversaturated and shows that there is still room for satisfying and expanding the Japanese chocolate market. Third, See’s Candies has experienced a western regional success including Hawaii, which translates into an expansion into a relationship with Japan. Fourth, the company is experiencing flat U.S. sales volume, and needs to find new opportunities. Fifth, part of the U.S. sales issue is the extreme seasonality, and the different cultural practices of the Japan market could help even out the highs and lows throughout the year.

With the decision to enter the Japanese market, See’s Candies must be cautious in its entry strategy. I believe that of the three proposals it is currently facing, the wisest choice is Option 2: joining forces with M.A.T. and trusting the successful importer. Compared to the other options, M.A.T. has the most synergy with See’s historical brand and strategy in many ways. One similarity is the company size and growth. Both companies have always been small and more regionally focused with an emphasis on a slower and more organic growth. Another similarity is the focused attention on quality. See’s and M.A.T. clearly do not compromise on quality in their products, and that match in branding is extremely important for sustainable success. This leads to a third similarity of positioning. In Exhibit 4 on the positioning diagram, See’s Candies shares the same high degree of traditional chocolate (vs. trendy), while it falls right in between brand and boutique on the scale of simple to...