SWOT Analysis

國

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

14

rice wine. According to the forecasts in a Vinexpo / IWSR study, consumption should grow by a further 3.57% between 2009 and 2013 to reach 2.7 billion 9-litre cases.

3.3. SWOT Analysis

The following SWOT analysis provides the strengths and weaknesses of the company, and demonstrates the opportunities and threats that Bon Ju (本酒) is facing when trying to develop operations in the Taiwanese market.

3.3.1. Strengths

 Uniqueness - Healthy new alcoholic drink for the market in Taiwan

 Wide range of choice - Variety in products and their taste

 End-to-End storage and transportation - Understanding the difficulties of delivery due to the products‟ sensitivity to high temperatures.

 Convenience - Easy to buy anywhere in Taiwan.

Firstly, Bon Ju (本酒) sells nutritious and healthy rice wine since this product contains a lactic acid bacteria and dietary fiber, both having an extensive range of positive effects for the human body; e.g. prevention of liver damage, anti-cancer effect, increase of metabolism, burning fat, prevents constipation, ameliorate menopausal symptoms and help improve the skin care.

Secondly, Korean rice wine has many different production outcomes. The taste of rice wine depends on the mixture of its main substance, rice or wheat, plus adding other ingredients like fruits or medicinal herbs to develop a wide range of flavors. Current rice wine variety includes ginseng, rubus coreanus fruit, bamboo, apple, strawberry and pear flavors.

In addition Korean rice wine has not only low value products but also exclusive products.

Thirdly, because of its fermented condition, this type of rice wine is very sensitive to temperature fluctuation. Thus the company can secure the refrigerated transportation and storage of the products to maintain the best quality of this wine. Finally, Bon Ju (本酒) plans

‧

to sell all retailers in Taiwan through wholesales and distributers, making the product readily available for the consumers, who will no longer have to go to expensive restaurants or import stores to drink or buy this type of Korean wine. Bon Ju (本酒) will place the product directly where consumers demand requires it.

3.3.2. Weaknesses

 Delicate control of temperature to guarantee the high quality of products

 Short expiration date

 Costs of storage and transportation in refrigerated facilities

Because of the fermented condition of this type of Korean rice wine, it is very delicate and sensitive to high temperature so this must be controlled carefully in order to maintain its good flavor. Delivery of the product in plastic bottles as it is often distributed might be a risk especially in Taiwan, which as marine tropical climate island posses a long and humid summer. The only solution is to consolidate the refrigerated transportation of the product even though it may be costly. Because of a similar reason, this type of rice wine has also a shorter expiration date than other types of white or red wine. Using refrigerated facilities at all times during its storage and delivery must be guaranteed although it may imply a higher cost for the company‟s expenses.

3.3.3. Opportunities

 Possibility to promote Korean popular culture in Taiwan

 To extend market targets from young generation to middle aged people

 To create synergy effects with Korean restaurants all over Taiwan

Korean rice wine has historically been an “only for Koreans” unique traditional wine, especially if we understand that the food of a country is usually embedded with that nation‟s own characteristics. Accordingly, the imports of Korean rice wine can become a great chance to introduce Korean traditional culture, in this case its drinking culture, to the Taiwanese market. Until now the consumption of rice wine in Taiwan has generally been attached to low-income customers, however, Korean rice wine can be targeted to a different segment of

‧

That is the unquestionable focus here, especially considering all those middle or upper class Taiwanese visitors that spent time in Korea and would appreciate to have access to these products in Taiwan as well. Indeed, Korean restaurants are one of the most favorite places for dinner appointment in Taiwan, thus a very important aspect when selling rice wine to distributors in this business will be the creation of synergy effects with the big amount of Korean restaurants in Taiwan.

3.3.4. Threats

 Enormous competitors with massive investments from Japan, Italy, France, Spain, USA, Australia and Chile in the wine market

 Taiwanese hot and subtropical weather

 Not a first mover

In despite of the global economic recession, Taiwan is the one of the countries that is steadily growing in economic terms every year. However, due to the high taxes and regulation on the imports of wine, Taiwan is indeed a difficult market to enter. Moreover, the demand of wine in Taiwan is very low, due to the lack of drinking culture of Taiwanese people in comparison to other nations. France is the dominant source of supply of grape based wine, with a market share of 57 percent, followed by Australia with 9 percent, Chile with 9 percent and the USA with 8 percent. Italian and Spanish wines have been introduced and promoted in recent years.

Italy has around 5 percent of market share and Spain has now about 4 percent of it. In addition, and more specifically about rice wine, 90 percent of its imports comes from Japan, making Korean rice wine relatively unknown in Taiwan. This although it may be considered as a threat, it also underscores a considerable scope for a new market development. This should include generic promotion to develop consumers‟ awareness of Korea as a premium new world source of wine.

Another possible threat comes from the type of climate in Taiwan, as an island country having marine tropical weather and often having typhoons and earthquakes. The type of weather will be a challenge when it comes to the delivery of products making sure to avoid

‧ 國

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

17

their deterioration. This issue will be tackle properly as mentioned before in this chapter thanks to appropriate refrigerated transportation and storage facilities.

Lastly, we acknowledge the fact that the company is not a first mover supplying rice wine for the Taiwan alcoholic beverages market. Rice wine is a traditional drink in East Asia, and the Japanese influence Taiwan have historically make Taiwanese people more pervasive to the taste of sake. Japan is indeed the biggest trade partner of Taiwan while Taiwan is the second greatest sake destination for this Japanese product which is much consolidated in the country.

While early developers of this rice wine market have now their brand names strongly established, there are however new opportunities for more competitors to diversify the range of wines available as wine tastes mature in Taiwanese people. There is a considerable interest in quality wines from new source countries, including Korea.