Lion Nathan China Case Study Analysis
Chinese Economy:
In the year 1998, there has been a decline in the economic growth i.e. GDP of China by 8 percent due to the steady growth of export, falling retail cost, and less consumption of beer due to unemployment issues and low income. The per capita GDP of China was about $2800 as compared to $23,600 GDP per capita of with 4 percent growth of Australia, and with -0.4 percent growth of New Zealand i.e. $18,500 GDP per capita, despite the fact that China offers new entrants with exponential consumer market – world’s largest market in terms of beer and biscuits sale. (Luo, 2000)
Chinese Beer Market:
Yangtze River Delta Region – the fastest growing region of Chinese beer market demonstrated 350,000 to 400,000 retailers, 30 different local breweries, 200-300 distributors, 6000-8000 wholesalers providing services to an approximate of 70 million people. Premium beer was sold in large quantity as compared to the sales of mainstream beer. Despite the slightly higher prices of mainstream segment of beer, it demonstrated higher market share in YRD and Shanghai as compared to the premium market share. As LN deals in production of premium products, the sales growth does not favour the culture.
Corporate culture and HR policies:
The organizational culture was primarily based on efficient business practices. Their operational services in China involved all new staff members with significant years of experience in brewing industry. The core objective of the organization was to represent high performance and an improved growth. For this purpose, the management of the organization initiated a project through the use of all the available resources for induction and training of employees at the organization. Therefore, the expansion of business by Lion Nathan in China required the recruitment for which they took three reasons of Chinese people leaving their jobs under consideration (as shown in Appendix D). Thus, in order to meet the performance targets, the HR management of the organization preferred candidates of not more than 30 years old, with a minimum 2 years of experience,with offering of additional benefits with respect to the mind-set of the Chinese individuals. Although the hiring process was not an issue for the organization, but they leveraged skills and knowledge of their staff working in Australia and NewZealand. Due to the difference in the environment of all the involved countries, Expatriates demonstrated the fact that they should learn new things. Due to increase in the responsibilities, the organization prioritized team work rather calling expatriates to work on their projects.
Marketing Strategy:
The marketing strategy of the organization initially included the launch of Rheineck – a pen delta brand,which was presented in the market with a tag line “you drink with friends” targeting young generation. The strategic approach influenced the volume growth greatly. One of the key innovative advertising approach primarily included the change in the beer bottle design to be launched in restaurants,in order to encourage the consumption of beer in winter season. Additionally, the key approach of the organization primarily involved the concept of providing the consumers with the product i.e. acceptable and affordable based on the concept used by Coca-Cola.
Recommendation:
Since, the performance of the company has been downgradingdue to an occurrence of some consistent problems related to the debt management and undifferentiated products within a highly competitive market, some strategic recommendations are offered in order to allow the organization to strengthen its foothold in the market, whichinclude planning of an evolved product’s offerings to serve more consumer segments, in addition to improving, sustaining and strengthening the relationship with existing customers.
Implementation
Lion Nathan would target young males, who reside in Chinathrough bar, pub and restaurant promotions. The company would have its advertisement activitiesin the spot market, mainly the highly populated region of the China. The customers would tend to gravitate the sense of the involvement and community that the company fosters and have some knowledge of the social media and internet. The owner of the company should also participate in the quality testsand trade.
Execution Plan
The company should execute the social media marketing strategy by creating website that would bring together creative, key messages and conversion points for customers and prospects. The key objective of creating website would be to drive engagement and action. The company can execute the plan by creating a viral marketing campaign, which would help the company in spreading the word about Lion Nathan. Such socialization tactics would help the company in enhancing the products’ branding and in reaching the targeted audience, critical to the success of Lion Nathan. (Quesenberry, 2016).
Additionally, the company should use community management,which includes the information related to the new product launching and events. (Trevail, 2016). The company should also create events for exclusive experiments and taste testing, also the testing of new products would improve the relationship with customers, because they would feel like they have an exclusive privilege.(Teixeira, 2012).
Evaluation
The company should run analytics for the purpose of determining the engagement level, regarding which groups are interested in viewing the sites, and how the group are getting to the company’ page and if they are sharing information with their friend, family or relatives, and are they reaching out to Stack Brewing company. Similarly, the company would survey the customers in order to find the attachment level they feel to the brand, also the personal relationship the company has developed over the period of time..............................
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