Foreign Market Entry and Diversification Essay

1165 Words Dec 6th, 2011 5 Pages
Foreign market Entry and Diversification
Dr. Sarita Wesley
BUS 599- Strategic Management
November 12, 2011

Global beer market trends Over the past decade, the global beer market has undergone a lot of change. Developments and improvements in the quality and appeal of beer brands have resulted in a strong organic growth in the beer category. Brewers have responded to the declining beer consumption trends in developed markets. The decline of beer consumption in developed markets is due to high unemployment rates, high fuel prices, and reduced consumer spending. Industry consolidation has continued and the four largest brewers-Anheuser-Busch InBev, SABMiller, Heineken, and Carlsberg- produce almost half of all industry volume and
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The distribution agreement required each importer to be responsible for all activities involving the sale of the beer, except for production.
Foreign market strategy The recent trends in the global beer market proved Modelo with a chose of three foreign markets to enter; Africa, Asia, or Latin America. Based on these three emerging beer markets I think Asia offers Modelo with the greatest potential for success. Asia has become a significant region in the global beer market, accounting for about a third of global beer sales. China’s economic growth has resulted in a booming beer industry due to its growing middle class and increasing discretionary income. These factors have made China the biggest beer consumer in the world and the fastest rising market. Their beer consumption is predicted to expand at a compounded rate of five to ten percent over the next five years. Modelo should use the Think-Global, Act-Local approach for entering China’s beer market. The middle ground approach would allow Modelo to use the same basic competitive of differentiation but allow local managers the ability to (1) incorporate whatever country-specified variations in product attributes are needed to best satisfy local buys and (2) make whatever adjustments in production, distribution, and marketing are needed to be responsive to local market conditions and compete successfully against local rivals. Modelo should use a similar strategy to the one they used when interring the

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