Anheuser-Busch Acquisition of the Harbing Brewery Group Ltd.
Analysis of International Competitiveness
3/27/08
1. -What bureaucratic challenges do foreign companies face as they make investment decisions about China?
a. Limited cross-provincial capital transfers
b. Hierarchical governmental and legal structured that required all levels of the pyramid to be in contact or in touch.
c. Barriers of entry such as local content requirements and partnership agreements.
2. -What particular challenges do the bureaucracies of China present for foreign entrants into the Chinese beer industry?
a. Local brewers are supportment by the government, some sort of indirect or rather direcrt form of subsidy.
b. “Chinese problems require chinese solutions”
3. -What economic and demographic changes make the Chinese market more attractive now (2005) for foreign brewers than it was during the 1990’s, when many foreign brewers invested and then exited at extremely high costs? Income increased along the “gold coast” of China, as well as in cities and metropolies along the Pacific Coast. Furthermore, there was an increase in technology and innovation required for the preservation and manufacturing of the product. Awareness of global beer brands also grew.
4. -What decision criteria does the Chinese beer drinker use when he/she decides to purchase beer? Price largely influences their decesion, as a large part of the Chinese population is poor and leads a rural life. Brand has little influence in the purchasing decision of this segment of the population as most beer is drank at home. Alternatively, urban Chinese with higher disposable incomes, and much more aware of international trends and global brands, as seek to fit in ...