The Nakamura Lacquer Company (NLC) of Kyoto, Japan, employed several thousand men and produced 500,000 pieces of lacquer tableware annually, with its Chrysanthmum brand becoming Japan's best known and bestselling brand. The annual profit from operations was $250,000.
The market for lacquerware in Japan seemed to have matured, with the production steady at 500,000 pieces a year. NLC did practically no business outside Japan.
In May 2000, (much to your chagrin!) the ambitious and dynamic, Mr. Nakamura (Chairman, NLC) received two offers from American companies wishing to sell lacquer ware in America.
The first offer was from the National China Company. It was the largest manufacturer of good quality dinnerware in the U.S., with their “Rose and Crown” brand accounting for almost 30% of total sales. They were willing to give a firm order for three years for annual purchases of 400,000 sets of lacquer dinnerware, delivered in Japan and at 5% more than what the Japanese jobbers paid. However, Nakamura would have to forego the Chrysanthemum trademark to “Rose and Crown” and also undertake not to sell lacquer ware to anyone else in the U.S.
The second offer was from Sammelback, Sammelback and Whittacker (henceforth SSW), Chicago, the largest supplier of hotel and restaurant supplies in the U.S. They perceived a U.S. market of 600,000 sets a year, expecting it to go up to 2 million in around 5 years. Since the Japanese government did not allow overseas investment, SSW was willing to budget $1.5 million for the next two years towards introduction and promotion. Nakamura would sell his “Chrysanthemum” brand but would have to give exclusive representation to SSW for five years at standard commission rates and also forego his profit margin toward paying back of the billion 1.5 $ explain introduction to industry explain introduction to problem explain cause and effect explain swot analysis explain solution of this case study
Answers
Explanation:
Analyse the following case and answer the following question:
The Nakamura Lacquer Company (NLC) of Kyoto, Japan, employed several thousand men and produced 500,000 pieces of lacquer tableware annually, with its Chrysanthmum brand becoming Japan's best known and bestselling brand. The annual profit from operations was $250,000.
The market for lacquerware in Japan seemed to have matured, with the production steady at 500,000 pieces a year. NLC did practically no business outside Japan.
In May 2000, the ambitious and dynamic, Mr. Nakamura (Chairman, NLC) received two offers from American companies wishing to sell lacquer ware in America.
The first offer was from the National China Company. It was the largest manufacturer of good quality dinnerware in the U.S., with their “Rose and Crown” brand accounting for almost 30% of total sales. They were willing to give a firm order for three years for annual purchases of 400,000 sets of lacquer dinnerware, delivered in Japan and at 5% more than what the Japanese jobbers paid. However, Nakamura would have to forego the Chrysanthemum trademark to “Rose and Crown” and also undertake not to sell lacquer ware to anyone else in the U.S.
The second offer was from Sammelback, Sammelback and Whittacker (henceforth SSW), Chicago, the largest supplier of hotel and restaurant supplies in the U.S. They perceived a U.S. market of 600,000 sets a year, expecting it to go up to 2 million in around 5 years. Since the Japanese government did not allow overseas investment, SSW was willing to budget $1.5 million for the next two years towards introduction and promotion. Nakamura would sell his “Chrysanthemum” brand but would have to give exclusive representation to SSW for five years at standard commission rates and also forego his profit margin toward paying back of the $ 1.5 million.
Question: What should Mr. Nakamura do?
Question: What should Mr. Nakamura do?
Answer: Mr. Nakamura has to decide that which offer he should accept and whom can he make partner to supply goods for next few years. Mr Nakamura should accept orders from Mr. Phil Rose and have a contract for next three years for supply material for US markets. Salient features of the deal He has order of three years for annual purchase of 400,000 sets at 5% more amount than the current rate. Mr. Nakamura will not sell any merchandise to USA client’s during the contract period of next 3 years.