Strategic Research Of Tsingtao Beer’s Internationlization

With the stable progress of global economic integration, the degree of internationalization in beer industry continue to be strengthened and have a great influence on the development of the world beer market. In the past 10 years, the world’s beer production has been increasing year by year, since 2001, the world’s beer production has reached a volume of 142.4 million kl, with an average annual growth rate of 3%, up to 192.5 million kl in 2011, with the cumulative growth volume of 6.2 million kl. Although affected by the global financial crisis in 2008, in 2009 the growth rate decreased to 0.8%, in 2011 the growth rate has climbed to an average of 3% and it’s expected that in the next five yearsthe globle beer industry will maintain an annual growth rate of 2%-3%.As the country in Asia accounting for the largest part of beer sales volume, in 2011 China has contributed a 67% of incremental volume to the world beer market, and 88% to the Asia market. It’s undoubted that China not only has been the world’s largest beer market in terms of volume growth, but will also become an international beer market the main investment capitals are going to focus on and more proper for marketing activities. For the highly competitive beer industry, the concentration of domestic beer market has been increasing, and for the development of the domestic market, the share has been declining. Faced up with such situation, domestic enterprises have to make up their long-term plans for the future. For most businesses in China, if the domestic market is large enough, most companies prefer to remain in the country because managers do not have to learn a new language, comply with new regulations, deal with fluctuations in the exchange rate and suffer from the uncertainty of the political and legislative situation in outward market, moreover, they do not have to meet the customers’needs and expectations to redesign new products for international customers. What’s more, the domestic market environment is more secure. However, in addition to decreasing market share, the internationalization of companies can bring more opportunities to them, for example, in the international market has more profitable opportunities compared with the domestic market. In order to achieve economies of scale, companies need a larger number of customer group. The company hopes to undermine the risk of high dependence on the single market, squzzing the domestic market share of international opponents and meeting the demand of international customer and so on. However, before deciding to enter the international market, the company must recognize and evaluate a variety of risks, including expenses, outside foreign preferences, business culture, expectations and international management, talent introduction, differences over the domestic business regulations, exchange rate depreciation and even cases of coups and property confiscation. Therefore, concerning how to succeed in the highly competitive domestic market and go globally to enter the international market, the first step in the strategic choice will be particularly important.Tsingtao Brewery, as the most successful company with high international strategy within Chinese beer companies, has achieved a healthy and stable development in terms of sales volume, sales revenue and net profit nearly a decade. Tsingtao’s brand value has increased from RMB 10.48 billion in 2003 to RMB80.585 billion in 2013. Based on the great performance, Tsingtao Brewery still need to continue to explore the his own internationalization strategy with the development of economic environment and the beer industry, focusing on how to win the domestic market, which will be a source of inspiration to the whole beer industry as well as to other national enterprises.This paper aims to study nearly previous 10 years of data of the beer industry with the purpopse of summarizing the characteristics and development trend of the world’s top international beer brands and companies and analyzing the existing issues in both domestic and international beer markets and further improvement space within the highly competieive market environment. Meanwhile, based on the large amounts of data sorting and investigation, from the viewpoint of marketing models and strategic layout, this paper has a detailed discussion of the four stages of international strategy (First, the stage of flexible export activities; Second, the stage of export by way of independent agents; Third, the stage of setting upsubsidiaries or branches; Fourth, the stage of establishing overseas production facilities). Based on the analysis of the four stages of international strategy, this paper intends to determine the stage of Tsingtao Brewery’s internationalization strategy, and then through the SWOT analysis, do the relevant research on Tsingtao’s strength, weakness, opportunity and threat for his international strategy, expecting to make clear of the target market Tsingtao’s entering, if it’s the developed markets or developing markets, and have a consideration of the ways of entering. In recent years, through strategic cooperation with AB and market investigation on South Africa and Thailand construction project, Tsingtao Brewery has made a great attempt and exploration for the international strategy. Even though for various reasons, such attempts and exploration fail to achieve the best performance, they will offer rich experiences and benefits for the future development of Tsingtao Beer.