Ajinomoto SWOT and PESTLE Analysis

Strength

1. Leading edge bioscience and fine chemical technologies.The Ajionomoto Group has been trying to expand the business in health care by applying its leading-edge bioscience and fine chemical technologies. With these technologies, it aims to build environmentally friendly and mild to skin products in the personal care segment. In the health and nutrition segment, it builds health value products based on amino acid benefits. It also works towards disease risk assessment based on amino acid balance and concentration in blood. In healthcare ingredients, it originally formulates amino acids. It also develops protein materials for regenerative medicines. It also provides high value-added contract manufacturing services based on proprietary technologies. With the power of the technology that it excels in, it aims to strengthen its pharmaceutical custom manufacturing business.

2. Reorganized research and development structure to respond to changing market. In April 2019, Ajinomoto reorganized its R&D structure which helped the Group to quickly respond to rapidly changing market environment. This new structure enables the company to create value even more linked to business which will help in fundamentally research product development and industrialization and hence contribute to sustainable growth. The company reorganized its research in new fields and introduced technological support functions from the Institute for Innovation into the Research Institute for Bioscience Products and Fine Chemicals (BF), Institute of Food Sciences and Technologies (FOOD), Information System Planning Department, and Production & Technology Administration Center. The Group will also collaborate with external organizations to strengthen the reach and value of their R&D. The Japanese food major, also accelerates its research and development through various technologies integrated so as to provide value to customers quickly.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Practicing sustainable materials sourcing.For Ajinomoto, getting good quality raw material is very important and hence it conducts comprehensive assessment of raw materials whichever are used in its operations. The results of this assessment are then used to analyze by consulting with associated departments and external experts. The Group actively supports sustainable sourcing of raw materials like palm oil, paper, and other forestry resources. The Group targets to procure 100% sustainable palm oil and paper by financial year, 2020. Palm oil is a very critical raw material for the Group since many of its products like cup soup, instant noodles, coffee creamers etc., use palm oil. These are made in regions spanning Japan, Southeast Asia, Europe and South America and the supply of certified palm oil is not available in all these regions. The Group defines sustainable palm oil as which is either certified by the RoundTable on Sustainable Palm Oil or which is traceable to sustainable sources. In 2018, 25% of the palm oil used was certified and the Group is gathering data on the oil for which it has confirmed the traceability. The Group also supports that the paper used by Group must be based on its Paper procurement guidelines which states that sustainable paper should not be derived from deforestation in areas of high conservation value. The paper sourced should come from providers who produce it with proper accordance with laws and regulations of production areas. It also includes Forest Stewardship Certified paper. In 2018, 95% of paper used in Japan was sustainable.

2. Focused to create positive impact on environment and resources .Ajinomoto Group actively seeks to reduce the use of plastic and is also working towards developing recyclable plastic material. Plastic is an important material for the Group as it is widely used in packaging and ensures that the food is protected and safe to eat. In 2018, the annual amount of plastic use was approx. 70 thousand tons. The Group is currently working towards improving and developing new materials to make eco-friendly product packaging. The Group aims to achieve zero plastic waste by financial year 2030. It is also working towards better technologies to avid waste altogether. In 2017, it converted some of the stick shaped packaging of one of its products to paper which reduced the plastic use by some 11 tons. Changing the design to more compact packaging of its coffee product Blendy also cut the plastic consumption by 25 tons. The Group also develops mono-material plastic packaging and alternative packaging materials which can be recycled.