Case Study – the Demise of Foreign Competitors in the Chinese Beer Industry

Success in the Chinese’ fruit beverage market is contingent upon distribution decisions made by firms in the market. Many companies have failed to prosper in this market due to poor distribution decisions. However, the Chinese fruit beverage market is attractive. The advantageous nature of this market is revealed by examining competitive rivalries, and the social, economic, and political forces that will affect your firm’s ability to successfully compete.

When entering the Canadian market, Guo faced multiple problems that halted the process. These problems included; high duties and taxes, non-Chinese Canadian consumers not knowing Yanjing’s products, and Canadian prices compared to the Chinese market prices. Although there are many present problems with selling this beer in Canada, immigrant entrepreneurs can avail services and are able to stay in the market. As long as one stays vigilant and was willing to take high risks, the success in importation of beer to Canada could be achieved.

It is also important to consider the MACRO environment whilst planning for future areas for development as these factors can have an impact on possible training. PESTLE is a useful tool to enable us to do this. PESTLE assesses the market, including competitors, from the standpoint of a particular proposition or a business. PESTLE becomes more useful and relevant the larger and more complex the business or proposition, but even for a very small local business a PESTLE analysis can still throw up one or two very significant issues that might otherwise be missed.

a) The consumers’ tastes were changing. According to the case, the beer consumption had declined by 2.3% due to the competition from wine and spirits-based drinks. What’s more, an increase in federal tax as well as health concerns also caused the decline of the sales of beer.

iii. Import beer companies: These companies include Beck’s(Germany), Heineken (Holland) and Corona (Mexico). They control about 12% of the region’s market. However, these companies are seen to operate at disadvantage due to higher shipping costs, weaker distribution networks and an inability to control product freshness

     The brewing industry was once held to competition among many breweries in small geographic areas. That was almost a century ago. The U.S. brewing industry today is characterized by the dominance of three brewers, which I will talk about in this paper. There are many factors today that make the beer industry an oligopoly. Such factors include various advancements in technology (packaging, shipping and production), takeovers and mergers, economies of scale, barriers to entry, high concentration, and many other factors that I will cover in this paper. Over the course of the paper I will try to define an oligopoly, give a brief history of the brewing industry, and finally to show how the brewing industry today is an

PEST analysis is an imperative strategy tool used for a company, mainly to oversee and assists in project management. PEST analysis stands for the political, economic, social and technological factors of an organization. This tool is used as an aspect of an organization's competitive strategy to analyze and assess the critical external factors that may positively or negatively impact the organization (Kadlubek, 2016). When a PEST analysis is performed, the external factors are analyzed and monitor the external marketing environment. A company may consist of several external factors that can bolster or impede the development of an organization; therefore, it is beneficial and more productive to subdivide the external analysis into more feasible segments (Frederick, Agnes and John, 2011).

2》 Other beer brands have occupied large market capacity, market share of Carlsberg and Budweiser far exceeds that of Tsingtao beer

The three most critical challenges Starbucks faced in China were political restrictions, socio- cultural, economic and financial challenges. China is highly bureaucratic country with difficult processes of getting permissions and sanctions to start and run business. The biggest challenges for Starbucks were the old tradition of tea drinking in China. At the beginning Starbucks managers didn’t how to accustom Chinese to drinking coffee; to acquaint employees and Chinese executives with coffee drinking experience Starbucks provided different training programs for them in which they learned more about coffee and Starbucks’ culture.

The final project is going to be about the market entry of Starbucks into China. This project will focus on gauging the success of the company's market entry strategy thus far. Starbucks has announced in a press release that it believes China will be its #2 market by 2014, and the company has been one of the most successful American companies in that market (Starbucks, 2012). The company entered the Chinese market in 1999 with a store in Beijing. This followed the acquisition of greater knowledge about Chinese business culture through outlets in Taiwan. The company initially used a licensing agreement to enter the Chinese market (Starbucks, 2010).

• The demand of American beer has been increased in Europe, Asia and South America.

Political –Governments tend to exercise significant control over beer as it contains alcohol which has caused many problems in society and has addicted people. This attention from the government will affect Heineken in sale volume in the market. Many governments have imposed heavy taxes on liquor and beer imports, and with globalisation many brewers are looking for new markets where they can gain maximal profits. This proves to be a threat for Heineken. Heineken must conduct thorough research on countries policies on alcohol such as drinking in public, alcohol contents in drinks, legal drinking ages and must strategically plan their integration into these markets based on the research.

|After seeing a reduction in gross profit in 2008 Grupo Modelo recovered and increased their gross profit 10.6% in 2009. However, Grupo |

Direct export access to China used to be difficult due to the complexity and slowness of the country 's customs rules and regulations. But with the relaxation in regulatory restrictions and the opening of its markets to foreign investors, China could become the next successful market for cognac and champagne importers. The elimination of tariffs in the wake of China 's accession to the World Trade Organization may encourage more cognac and champagne importers to the mainland, thereby skewing cognac/champagne import statistics in the near future. Last year, China ranked 20th in terms of cognac imports, with 1.2 million bottles (Export.gov). Since China became a member of the World Trade

Beer is expected to post a total volume CAGR of 4% to reach 130 million litres in 2016. As the social drinking scene in Singapore consistently expands, beer will be able to expect a steady growth. However, in years to come, Singapore’s domestic beer industry will experience a slowdown as beer in Singapore is reaching maturity. (EuroMonitor International 2011, Beer in Singapore)