Fermentation in the China
Beer Industry
JOHN W. SLOCUM JR.
WENDY CONDER
ELTHON CORRADINI
ROY FOSTER
ROBYN FRAZER
DAVID LEI
MIKE MCGUIRE
JOHN ROSS
STAN SCOTT
INTRODUCTION
As firms in many industries seek to enter
new international markets to sustain their
growth, they often find themselves in a stra-
tegic quandary. Product designs, marketing
approaches,
supply-chain management
issues, and business strategies designed for
one region of the world often require signifi-
cant time and managerial effort to success-
fully reconfigure and adapt them to new
markets. The evolution of customer demand,
preferences, and buying patterns can vary
markedly from onemarket to another. In fact,
regional markets can exhibit profound differ-
ences even within the boundaries of a single
nation. For example, in China, the sophisti-
cated urban coastal mega-cities that line the
Pacific shores teem with millions of custo-
mers willing to pay top dollar for foreign-
branded goods. Yet, a few hundred miles
inland, there are hundreds of millions of
people who have yet to see a foreigner walk
through their small city streets.
Entry into a large foreign market gener-
ates considerable strategic opportunities as
well as challenges for both multinational
firms and domestic firms. Foreign markets
often allow a multinational firm to introduce
a new line of products designed specifically
for that market, or to modify their existing
products to better suit the tastes and needs of
the targeted customers. These efforts can take
considerable time and effort to yield success.
Some firms may seek to establish a presence
rapidly in a new market so as to capture first-
mover advantages; others may move slowly
in order to better understand the local subtle-
ties and possible pitfalls of serving customers
with very different preferences. Although
firms in any given market compete with
one another for customers, they paradoxi-
cally also become highly interdependent
over time—in that they are impacted by a
common set of underlying geographical fac-
tors and