Anheuser-Busch and Harbin Brewery Group of China

2936 WordsApr 29, 201012 Pages
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…show more content…
Appendix I outlines various financial ratios that illustrate AB’s overall financial health and potential. One of the most important pieces of financial strength that AB possesses is their free cash flow. This cash flow will allow AB to acquire local Chinese breweries which is a pivotal part of the strategies outlined in this analysis. In addition to large sums of free cash, AB already has a strong position in the Chinese market since its acquisition of Harbin Breweries. This acquisition has allowed AB to enter the Chinese market with a major customer base already established. These strengths will give AB the strategic advantages needed to succeed in the Chinese beer market. (Weaknesses) AB has to be conscious of how it is perceived by the Chinese market. Since AB is a US company they may have trouble getting Chinese consumers to buy their product. This is a weakness that AB has very little control over since consumer attitudes are hard to change. The best way for AB to remedy this problem would be through disguising themselves as a Chinese company by purchasing WFOE and operating under that Chinese guise. (Opportunities) The most prominent opportunity for AB, that is made available by entering the Chinese market, is the enormous size of the market itself. Without a doubt, the Chinese market is thirsty for alcohol and 1 billion beer consumers are sure to help AB achieve massive economies of scale. However, this opportunity has caught the attention of

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