Western Beer Read the linked article and answer the five questions that follow. Big Volumes Don't Mean Big Profits in China's Beer Market Click here to view the full article on WSJ.com SUMMARY: This article focuses primarily on industry analysis. It concerns China's beer market, where despite big volumes, intense competition among large brewers keeps a tight lid on margins. In the US, AB InBev and SAB MillerCoors hold more than 70% of the market by volume, with margins of 38% and 18% in 2014. In China, the same 70% market share is split among five robust competitors whose EBIT margins range between 6% and 9%. Now, after decades of robust growth, beer volumes in China are slumping and turning a profit is posed to get even tougher. QUESTIONS: 1. On the surface, why does the Chinese market for beer seem attractive? In fact, why is the Chinese market an irresistible one for major Western beer producers to enter? 2. In reality, why is the "structure" of the Chinese beer market not so favorable? In terms of Porter's Five Forces, why is the Chinese beer industry not necessarily that attractive? And why might this market actually become less attractive in the near future? 3. Reflecting on the previous question, do you think the Chinese beer industry will actually remain rather unattractive for a long time? Or do you think the market will consolidate one day? 4. How is SAB dealing with the problem? Which strategy is it using to raise margins in the Chinese market? How has AB InBev utilized this strategy? 5. According to the article, why is SAB's strategy being criticized? What is SAB doing differently from InBev, for example? Do you think SAB is on the right track in the long run, or does it need to introduce more of its own Western brands into China?
13 October, 2015
A combination of business memo and business report Order Description Instructions uploaded. Assignment: Your boss, James Del-Yeager ([email protected]), is requesting a memo. Here are the instructions you received. A list of potential resources is provided to help you in completing the request. We are in the initial phase of deciding where our newest manufacturing plant should be located. We have narrowed down our options to Brazil, the Czech Republic, Thailand and South Africa. In order to help us make a final decision, we need you to provide some data. Specifically, for each of those countries, I want you to research four factors: •Literacy rate •Wage rates •Infrastructure •Government corruption Your memo will be reviewed by our international location development team, not all of whom speak English as a first language. As a result, I expect you to include several visuals to help make the information you provide understandable and accessible to all. We have not determined the weight of the factors yet so it is not as simple as plugging information into a formula. For that reason, I want you to include your thoughts on the ramifications of the data you uncover. Since I will be sharing your memo with a number of people invited to follow up conversations, I need you to provide the following information as part of your document: •Discussion of the options will take place at various times in Conference Room C •Meeting times are: oThursday, October 8 from 8:00 to 9:00 a.m. oMonday, October 12 from 2:00 to 3:00 p.m. oWednesday, October 14 from 11:00 to 12:00 oTuesday, October 20 from 10:00 to 11:00 a.m. Please include language that informs everyone that they are not permitted to attend more than one session. And also please explain that they should RSVP their preferred session to me via email no later than end of day on Monday, October 5 so that I can add them to the attendance list for that session. I look forward to your findings. Potential Research Resources: http://www.portal.euromonitor.com/portal/account/login http://www.countrywatch.com/ https://www.cia.gov/library/publications/the-world-factbook/ https://www.transparency.org/ Instructions: 1. I already did the research and pulled the data in a document including the four factors: Literacy Rate, Wage Rate, Infrastructure, and Government Corruption. Therefore, you don’t need to do the research, but you can do so if you lack information. 2. This assignment is a combination of business memo and a business report. The business report will be attached to the memo. So please refer the report in the memo. 3. For the memo, the information that should be put on the memo is in the assignment part above. The memo should also summarize your findings, based on the assignment, and reference the attached report. Focus on tone, positive positioning, attitude, format of the memo (use a memo template that is single spaced) 4. For the report, please carefully read the research data I collected. Analyze the data, compare data between countries.Please include my graphs in the report. As I highlighted above, I want you to include your thoughts on the ramifications of the data you uncover. Please NOTE: the scenario is to select a proper place to launch the new manufacturing plant. 5. The main focus is the memo, please make sure to include every information required in the assignment part above, and use the right format. Or I will request revision. Thank you! 6. The professor looks for grammar errors. Please be very careful about grammar. 7. The memo can be one to one page (single space). The report can be one and half pages words (double space), plus graphs.
13 October, 2015