Business Strategies of World’s Successful Companies: Ajinomoto Co. Inc.’s Winning Business Strategies

By | January 19, 08

Business Strategies of World’s Successful Companies: Ajinomoto Co., Inc.’s Winning Business Strategies

Beginning as a small business start up in 1909 with the introduction of the original seasoning AJI-NO-MOTO into the market, Ajinomoto’s strong business strategies have enabled that small business to grow into a global business committed to supplying original, high-quality products with its original technology and superior marketing skills.

Business Strategy 1: Where Do You See Your Market?

This question is so fundamental to the success of your business that it has to be clearly answered in your business plan – you need to have a written business plan for your business just in case you don’t have one yet.

From the onset of starting out in business, you must know where you would most likely sell your products to keep your business going effectively so that you can evolve a strong marketing strategy to enable you realize your sales goals.

Ajinomoto’s business strategy as regards to sales was to focus on the international market. This saw the company opening an office in New York in 1917 and later expanding over the whole of Asia between the wars. Between 1947 and 1953, AJI-NO-MOTO had taken its business to the United States and Europe, while it by 1954 offices had been opened in São Paulo, Paris, Bangkok, and Hong Kong.

Business Strategy 2: Discover Other Products from Your Present Process

Very possible in your business, whether it’s a small or large scale business is the fact that you can create additional one or two products from the same process you are presently using to produce a single product.

But many business owners or managers are not easily able to see this opportunity or adopt it as a business strategy, so they continue to lose the additional income that would have come into their business. More sadly for such business owners is also the fact that these additional products could not only have been easy and cost effective to produce, they could equally have turned out to be best sellers.

Between the wars, AJI-NO-MOTO began to produce cooking oil. This was an additional product to the company’s offering and was made possible when the company discovered it could equally produce cooking oil from the process it was applying in making MSG from soyabean protein.

Business Strategy 3: Establish the Capability to Continually Produce

Since business is all about meeting consumers’ needs, to remain in business therefore you must be able to effortlessly continue to churn out products that will keep your customers satisfied. To ensure this is to consciously put in place a system or structure in your organization.

Ajinomoto’s business strategy to enable it to continually creating products was the establishment of its Central Research Laboratories in 1956. This helped the company to discover several different ways, both biological and synthetic of producing MSG. It also enabled it to diversify into the pharmaceutical business.

Business Strategy 4: Joint Ventures & Licensing Agreements Can Be Extremely Rewarding

Depending on the circumstance, a business success strategy to consider adopting is to engage in joint ventures or licensing agreements or both. This type of business strategy is particularly favorable where it is highly expensive to either get into the production or the marketing of certain products.

Through joint ventures or licensing agreements you can obtain other company’s products to sell when it is favorable to do so compare with if you were to produce them yourself. On the other hand, you can grant licenses to other companies to sell your products where selling it yourself will cost you a great deal.

In the 1960s, Ajinomoto was able to enter the U.S and European markets, as well as to expand its product line locally through joint ventures and licensing agreements.

It went into a licensing agreement to market Kellogg’s breakfast cereals in Japan in 1962 and also had an agreement with CPC International Inc. in 1965 to produce and market Knorr soups. Again, Ajinomoto in 1973 went into a joint venture with General Foods to manufacture soft drinks, coffees and instant coffees.

Business Strategy 5: Flexibility Is Needed To Adjust To Changing Circumstances

More than any other time, businesses that desire to survive and succeed in the 21st century must be flexible enough to be able to quickly come to terms with the changes that are ever taking place so rapidly – consumer preference, technology, etc.

Due to its flexibility, Ajinomoto was able to make up for the low sale of its foods products in the 1980s by changing its focus and concentrating on products derived from its research on amino acids. Consequently, its new fine chemicals and pharmaceutical businesses kept it afloat during this era.

Business Strategy 6: Don’t Stop Looking For New Markets for Your Products

Successful Businesses or companies are those whose revenues are constantly increasing because they have a business strategy in place to identify and penetrate new markets which promise good potentials. This ability is particularly important not only for the increased total revenue to your business, but for the fact that your business is protected from a fall in sales in one market.

Recognizing the huge market to be exploited in China in the 1990s, following the country opening up its economy to the outside world, Ajinomoto moved in and established its business.


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