Business Risks

We appropriately identify risks from a companywide business management perspective, and we develop countermeasures according to the impact of those risks. In this way, we not only minimize risks, but we also achieve sustainable growth and gain new growth opportunities.
We outlined the three visions—the Business Vision, Sustainability Vision and Management Vision—in the Meiji Group 2026 Vision. We have identified the Meiji Group Business Management Risks according to those three Visions. The Executive Committee combines these business risks with the Group visions and evaluates and confirms them. We thus build a risk management system that also adapts to changes in the business environment.
Risks are assessed taking into account the likelihood of occurrence and the level of impact on the Group.

Business Risks

Risks Countermeasures Importance
to the
Group
Sale and supply of products and services
  • Abandon to launch planned product
  • Changes in customer lifestyles and values
  • Negative rumors about the Meiji Group’s core materials (milk, cocoa, etc.)
  • Establish solid Proofs of Concept (POC)
  • Gather information on market trends
  • Develop products that are friendly to the environment and society
  • Create products and services unique to Meiji that address social issues
  • Appropriately disseminate relevant information about products and materials
The majority of profits comes from specific products
  • Sluggish sales of products that account for a considerable portion of sales and profits
  • Implement promotions that maximize unique value
  • Improve product portfolio management
  • Explore new markets and new business domains
Supply chains
  • Insufficient or excess procurement or price increases of raw materials
  • Difficulties in procuring raw milk
  • Cessation of production due to production problems, etc.
  • Unstable product supplies due to distribution problems
  • Gather information on raw materials markets and promote procurement strategies
  • Diversify suppliers and consider alternative materials
  • Strengthen coordination between production and sales divisions
  • Improve distribution efficiency through labor-saving/automation
Technological advances
  • Rapid advances in digital technologies
  • Discovery of innovative treatment methods, manufacturing methods and formulation methods
  • Consider introducing new technologies as early as possible
  • Research new manufacturing and formulation methods, and search for alliances
Laws and regulations
  • Revisions that significantly impact corporate activities
  • NHI drug price revisions
  • Obtain information about system revisions early and implement countermeasures
  • Make appropriate approaches to relevant government authorities
  • Expand portfolio of products that are not affected by NHI drug price revisions
Overseas expansion and overseas Group companies
  • Rapid changes in society, or outbreaks of war or terrorism
  • Revisions of the systems that greatly exceed expectations in various countries
  • Gather information, and investigate and implement countermeasures early
  • Create product supply systems from multiple locations
Business plans, etc.
  • Failure to achieve the Visions or Medium-Term Business Plans due to change in business conditions
  • Growth slowdowns in Core Business, or failure to achieve targets for overseas markets or new business domains
  • Impairment losses on non-current assets or goodwill
  • Fluctuations in foreign exchange or interest
Enhance unique value and search for new value
  • Provide unique value in overseas markets
  • Manage business portfolio from the perspectives of profitability, growth and productivity
  • Make decisions and monitor investment and M&A plans appropriately
  • Use foreign exchange contracts and borrow at fixed interest rates

Sustainability-related Risks

Risks Countermeasures Importance
to the
Group
Caring for the Earth
  • Respect for the environment in corporate activities
  • Reduce CO2 emissions and prevent fluorocarbon leaks, switch to renewable energies, appropriately treat wastewater and industrial waste, and conduct initiatives in compliance with ISO 14001
  • Manage supply and demand, and decrease food loss
  • Comply with policies related to the environment
Climate change
  • Address climate change
  • Analyze climate change scenarios according to the TCFD framework, formulate strategies and release information
A Richer Society
  • Sustainable raw material procurement
  • Consider human rights, and human rights issues
  • Understand diversity, and use a diverse workforce effectively
  • Increase the ratio of sustainably procured raw materials, such as cocoa beans and palm oil
  • Strengthen cooperation and collaboration with dairy farmers and other suppliers
  • Address challenges of human rights based on due diligence
  • Create organizations and cultures that value diverse perspectives and abilities
  • Comply with policies related to procurement, human rights and society, etc.

Management-related Risks

Risks Countermeasures Importance
to the
Group
Governance
  • Make business decisions in a timely and appropriately manner
  • Internal or external non-compliance
  • Improve effectiveness of the Board of Directors
  • Enhance corporate governance systems
  • Provide education on compliance and social media usage, and comply with internal and external policies
Damage to the Meiji brand
  • Product recalls or withdrawals from the market due to quality defects or unexpected side effects of pharmaceuticals, etc.
  • Unexpected harmful rumors about the Meiji Group or its products
  • Pursue quality and safety
  • Communicate appropriately with each stakeholder
Human capital and culture
  • Recruit and develop human capital required for corporate growth
  • Employee engagement
  • Effects of business environment on productivity
  • Appropriately implement succession planning
  • Improve employee training
  • Enhance employee engagement
  • Enhance health and productivity management and create comfortable work environments
Information asset leaks
  • Information leaks and system shutdowns due to unauthorized access, etc.
  • Data breaches due to inappropriate system management
  • Strengthen information management systems and information security
  • Strengthen education on information management and comply with regulations and policies
Disaster, emergency or other unforeseen circumstances
  • Temporary or full suspension of business operations due to disasters, pandemics or other unexpected emergency
  • Increases or decreases in product demand due to changes in business conditions in an emergency
  • Develop business continuity plans and risk management plans for swift recovery
  • Maintain a broad product portfolio across the Group