Asahi Glass and Co

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Glass and construction – Internal Growth and acquisition.

• Chemicals – Joint Venture.

• Ceramics and refractories – Internal growth.

• Electronics and other Businesses – Joint Venture.

4. What should they do with the electronics industry?

They should continue with the electronics industry because it is a fast

developing industry and has bigger opportunities. They can sell off their ceramic

industry which is making only 2% profit and they can use this money to expand the

electronic industry. Asahi’s main products in electronics industry i.e. their LCD panels

and the thin film magnetic memory (hard) disks are well accepted in the market and

have good growth opportunities. The main problem for Asahi in the electronic industry

is there lack of knowledge in the field. This void can be removed by entering in a joint

venture with a well-established electronics company or improving expertise by investing

more money and by research and development. Glass industry is mature industry

whereas electronics is a growing industry and so there is good opportunities in the

electronics industry. As the case states, the glass sector was the cash cow for Asahi

Glass, they should use the money from glass industry in electronics to make it more

profitable.

5. Are there differences between AGC’s and a typical US firm’s corporate strategy?

• Generally Asahi use international acquisition to transfer technology and best

practice to home market rather than taking their practices outside

• Asahi has a passive style of managing its international acquisition thereby

differentiating from a normal American conglomerate by resembling a portfolio

diversification rather than a business diversification

• Asahi generally enters in joint ventures to expand its business which is not seen

among US firms

• Unlike a typical US firm, In Asahi Transfer prices were not employed between

production and sales division within the same product division, but were used if

product flowed across product divisions