Case Number: 5-204-251, Year Published: 2004
HBS Number: KEL003
Economics, Competitive Strategy
In early 2000, Asahi’s senior management was under considerable pressure to launch its own brand of happoshu, a low-end form of beer that enjoyed certain tax benefits under Japanese law. Unlike its major rivals, all of whom had launched happoshu brands in the previous few years, Asahi steadfastly refused to enter the happoshu category. The case allows students to explore the economic logic of Asahi’s strategy. The case can be used to study how the entry of a new product affects price competition across two closely related product categories (beer and happoshu) and how an anticipation of changes in price competition might affect the economics of the launch decision.
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