Anheuser-Busch and Harbin Brewery Group Case Study

Anheuser-Busch and Harbin Brewery Group - Case Study showcaseHarbin Brewery acquisition cost was the highest in China years 2002-2004 and depicted for $28.4 mm.Harbin Brewery was the leader in selling beer in completely three segments in Heilongjiang where the per capita consumption was 36 liters, double the national average. However, the high consumption rate has left(p) no opportunity for further growth and the company was forced either to live with the existing gross revenue train or to expand nationally. The acquisition by Anheuser-Busch allowed Harbin Brewery to meet its growth objectives and gain national identity.B/C. Governance and Top Management Anheuser-Busch, being very interested in expanding to China, has experienced the number of small-scale and big acquisitions of the national and regional breweries. Chinese beer market is very fragmented and the top five firms account only for 38 per centum of the market. Anheuser-Busch has bought the minority ownership positio n in the Tsingtao premier brewer on 2002 in order to gain the access to brewing capacities and distribution channels. Harbin Brewery Group has also experienced legion(predicate) ownership changes since 2001. In 2002 the firm has went public with 41 percent of shares distributed to public. On June 1 2004 Anheuser-Busch held 37.4 percent in Harbin. The current CEO of Harbin is Peter Lo who has supported the acquisition of his firm by Anheuser-Busch and is expecting to experience significant elaboration of Harbin brands on the national and international markets. II. External surround (Opportunities and Threats)A. General Environment Chinese beer market is the superior in the world since late 1990s with the solid sales growth of more than 40 percent in the recent five years. With the largest sales volume globally, the average sales price is still relatively low, confirming the growth potential for domestic and foreign brewers. In addition, there is significant growth in the target po pulation for beer and rise in the average income. Chinese consumers do non have inscription to the particular brands, while they favor the domestic brews (99.5 percent of all consumed beer). The acquisition of Harbin by Anheuser-Busch and low level of competition, gives the company the opportunity to gain the loyalty of major segment of beer consumers. B/C. Industry Environment and abbreviation of External Forces In overall the Chinese beer market is very attractive - the growth of sales and increase number of consumers reduces the number of competitors. Even though the threat of substitute is high, the supplier power threat is not significant. Nevertheless, the manufacturing infra structure and personnel problems make it almost impossible for Harbin to uniform the high quality of the product. III. Internal Environment (Strengths and Weaknesses)A/B Corporate Structure and Culture The Harbin Brewery, as the part of Anheuser-Busch, did not change the structure and culture. Taking i nto account the current problems with personnel training and lack of skilled professionals, the workforce is culturally diverse. C. organizational Activities Analysis Harbin is not outperforming its competitors (Tsingtao, China Resources Enterprises, Beijing Yanjing Group, and Guangzhou) from both financial and market