Harbin Brewery Group

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Executive summary

Anheuser-Busch (AB) Harbin Brewery Group, the fourth largest brewery in China was founded in 1900 and was acquired by Anheuser-Busch (AB) at $720 million in 2004. Known for its Hapi beer, the brewery holds 4% market share in China and is also the leading brewery in Northeast China. The external environmental analysis has indicated the overall attractiveness of the beer industry in China due to tremendous growth potential. However, there are also threats for AB Harbin which will be explained in this report. AB Harbin also reflected a healthy situation from the internal analysis.

There are 3 main problems for AB Harbin which includes the intense competition, increasing expectation and demand from customers and the
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Fortunately, Beijing and other provincial governments focus more on the long term economic growth of China.

For example: the local breweries in China are very much supported by the local government as the imposed taxes on beer generate huge revenue. This is the main reason for the abundant rules and regulations involved for the beer industry. These regulations have created many challenges for the breweries and interested investors.

The opportunity for AB in the China market is to have a joint venture with Harbin Brewery at the initial stage before it takes over the full ownership. This ensures that AB will have a better understanding of managing Harbin Brewery so as to minimize the risk and degree of control involved.

4.1.2 Economic

Although China is a growing country with increasing growth in per capita income and growth in the population, it cannot escape the huge changes from the outside world. The sub-prime crisis in USA and the world wide recession have made many countries including China slow down in growth.

However, with increasing purchasing power and changing lifestyles of the Chinese, it has created demand for premier beers. This has increased the awareness level between the different beer brands available in China. Thus, the Chinese beer market has shown large growth potential.

4.1.3 Social-cultural

China has a population of 1.3 billion in 2008. It is a huge market with growth potential due to large
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