Anheuser-Busch and Harbin Brewery Group of China
I. Executive Summary Anheuser-Busch (AB) is once again pushing forward in their attempt to gain market share in China. Many major global brewing corporations over the last 10 years have failed to achieve any degree of success in the tough Chinese market. Many challenges exist for foreign entrants into the Chinese market and very few foreign companies have been able to gain market share. Our group has decided to first look at past mistakes foreign brewers have made when entering the Chinese market. Learning from others mistakes has allowed our group to determine what strategic plan to recommend to AB’s CEO. Our strategic plan will enable AB to grow their market share across all of China’s four main regions. We have determined that the strategic issue at hand is the challenge of gaining market share in a country mainly looking at cost and is dedicated to cultural tastes as well. The five major firms in the industry make up only 38% of the market. AB has purchased a 10% minority interest in the number one firm, Tsingtao. AB’s recent takeover of Harbin Brewery shows that AB believes it is the right time to start acquiring dominant players and further pursue China’s potential. Finally, we outline three major strategies that AB could follow: multi-domestic, global, and transnational. Of these three strategies, we suggest that the transnational strategy be adopted by AB. The transnational strategy best deals with the issue of keeping prices low through increased economies of scale and the need for local responsiveness simultaneously. II. Introduction
Anheuser-Busch (AB) is facing many difficult challenges competing in the Chinese beer market. In this case analysis, we will identify AB’s strategic issue. We will then analyze the financial statements while completing a SWOT analysis. Following the analysis, we will present alternative strategies that relate to the strategic issue. Finally we will discuss our recommendations for moving forward and
Anheuser-Busch (AB) is facing many difficult challenges competing in the Chinese beer market. In this case analysis, we will identify AB’s strategic issue. We will then analyze the financial statements while completing a SWOT analysis. Following the analysis, we will present alternative strategies that relate to the strategic issue. Finally we will discuss our recommendations for moving forward and