Academic journal article Journal of the International Academy for Case Studies

Instructor Note's: Ichitan Group and the Price War in Thailand's Ready-to-Drink Tea Market

Academic journal article Journal of the International Academy for Case Studies

Instructor Note's: Ichitan Group and the Price War in Thailand's Ready-to-Drink Tea Market

Article excerpt

ABSTRACT

In November 2015, Tan Passakornnatee, the founder and CEO of Ichitan Group, most well-known for its ready-to-drink (RTD) green tea branded "Ichitan," had an extremely critical business decision to make regarding the firm's strategy in view of the long-lasting price war in the RTD tea industry that he had been part of for more than ten years. Two years ago, Ichitan had finally taken the largest market share of the Thai RTD tea market for the first time. Before that, the winner in this market had always been Oishi Group, also founded and led by Tan, who had later left the company, on good terms in midyear 2010, to start another company - later renamed Ichitan Group. As the year 2015 was coming to an end, however, there were a couple of signs that triggered Tan's worries about his recent business performance.

First, based on the third quarter data, Oishi had managed to reclaim its largest market share status, along with a revenue increase that far exceeded Ichitan's. Second, the RTD tea market was projected to suffer a declining trend in 2015, following its first negative growth in ten years that took place last year. In addition, although the total consumption of RTD tea in Thailand increased slightly from the previous year, its value had actually dropped due to various forms of increasingly aggressive, and expensive, price promotions that Ichitan's entry into the market had triggered. …

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