Delissa in Japan

1. Main Problem

After 10 years in Japan, Agria’s Delissa yogurt brand’s market share is too low – just 2-3%, compared to the double-digits in USA, Germany and the UK. Agria is seeking a way to improve the situation.

Alternatives: Agria’s Delissa line of fresh dairy products can:

A. Maintain its presence in Japan and stay with the current franchisee (Nikko),

B. Maintain its presence in Japan and change the franchisee, or

C. Pull out from Japan.

2. SWOT Analysis

Strengths:

- Agria is a Sweden’s leading dairy products cooperative, powerful national and international organization (name recognition). /”By 1991, more than 1.1 billion Delissa yogurts and desserts were being consumed per year worldwide. In fiscal year 1990, Delissa had sales of $1.6 billion and employed 4,400 people in and outside Sweden.”/

- Product variety /”yogurts, desserts, fresh cheese, and fresh cream”/.

- Distribution /”Ekman's idea of know-how transfer ventures, whereby a local licensee would manufacture yogurt using Swedish technology and then market and distribute the product using its own distribution network, had enabled Delissa to penetrate over 13 foreign markets with considerable success and with a minimal capital outlay.”/

- Promotion: /“Delissa was very active in sponsoring sports events, and Bjorn Robertson, himself a keen cross-country skier and sailor, offered his personal support to Delissa's teams around the world.”/

- Japan entry strategy: substantial advertising and sales promotion budget.

- Priced at 15% above competitive products, Delissa's image was "fashionable."

Weaknesses:

- Lack of franchising experience for Agria /”Industrial franchising was rare in the 1970s, and Swedish dairy products firms did not usually invest money abroad.”/

- “When you enter a market like Japan, you are on your own. If you don't speak the language, you can't find your way around.”

- Distribution: delivery procedure is too long for fresh food products. Ordering system is...