Research On Internationalization Of Chinese Dairy Enterprises

This paper intends to study the internationalization of the leading enterprises in the dairy industry under the wave of internationalization of Chinese enterprises.China's top three dairy enterprises,Mengniu Dairy and Guangming Group are selected as research cases,using comparative research method for in-depth comparation.Through the comparative study,we found that the state-owned holding enterprise,Guangming Group,belonging to the jurisdiction of Shanghai SASAC,showed the following characteristics:the advantage in brand and market shareis extremely obvious;compared with the private enterprises,it is large-scale,well-funded,and easy to obtain the support of the government and other investors and strong in financing channels and financing capacity;because its the government background,it has a certain administrative task indicators.Its business activities is not only determined by the market,but also by the government administrative behavior;information asymmetry leading to the lack of foreign enterprises to understand the domestic approval system,there may be political risks in the acquisition,which has become the concern of many overseas enterprises,resulting in negotiations in the process of obstacles.Based on its financing ability,and responsibility of shouldering the national will,Guangming Group,achieve its international operations through a large number of cross-border mergers and acquisitions.Mengniu Dairy,although the largest shareholder being state-owned COFCO Group,its historical background and development history made it more like a private enterprise with international background.Unlike Guangming Group,it presents the following characteristics:financing behavior throughout the development of enterprises has always been initiated by the natural person,later by venture capital,and eventually listed on the HKEx.Because of the capital nature of making profit,Mengniu must maintain a high-speed growth,to meet the risk of capital with the gambling conditions;as a company led by industry professionals,its raw materials,production and sales system market significantly,meet the requirements of the market;Finally,partly due to its foreign capital background,it has smaller obstacles and greater convenience in the process of internationalization,by the small obstacles.Through the comparative study,the following problems in the process of internationalization of Chinese dairy enterprises were found:1.M&A behavior is not rational enough and there is a problem that the payment price is either too high or too low.On the one hand,Chinese enterprises have long stressed the low-cost strategy and blindly stressed low price in M&A activity,most likely resulting to acquiring low-quality companies and losses.On the other hand,large-scale milk enterprises,due to the strength of funds,often premium Mergers and acquisitions,thereby enhancing the cost of overseas M&A activities.2.China's milk enterprises overseas business activities lack the guidance and support of national laws and regulations.So far,China has not yet promulgated a system of overseas investment legal documents,at present existing only a departmental rules and local provisions of the main provisions.At the same time,the relevant information and consulting services for overseas investment enterprises are not in place.Today,our enterprises rely mainly on the embassies to understand the political and economic environment,legal and regulatory information requirements of the investment destination,but because the main functions of the embassies are political cooperation and teaching and cultural aspects of the basic cooperation,they are far less enough to meet our dairy enterprises overseas investment's requirements.3.China's milk enterprises lack of professional overseas investment and management capacity.International investment environment and domestic investment environment is quite different,because China's dairy enterprise basically grow locally,lacking of overseas investment in professional investment talent and management personnel.4.Value of the brand has not been paid enough attetntion.With the internationalization of China's milk enterprises accelerating,more and more enterprises in China began to internationalize,but China's milk brand awarenessis not high enough.Compared with the European and American dairy giant,China's dairy enterprises lack of long-term system for brand awareness.In the last part of the article,for the characteristics presented at this stage,suggestions were given to the internationalization of Chinese milk enterprises:1.Given the short time of internationalization of our enterprises and the lack of sufficient international experience,more strategic planning from internationally renowned enterprises should be learned.2.The necessary prerequisite for the internationalization of Chinese milk enterprises is to effectively improve the integration capacity,management ability,management ability and brand awareness.3.In the process of overseas mergers and acquisitions,full account of the proportion of mergers and acquisitions,consulting and public relations team and other details should be taken.When the proportion of equity involved in mergers and acquisitions is large,the cost of mergers and acquisitions and the possibility of failure is greater,because many departments and stakeholders are involved,the higher.4.Whether making domestic integration of mergers and acquisitions or overseas strategic investment or mergers and acquisitions,food safety issue is the primary issue to be concerned about,and sometimes it can even be said to be the core issue.China's food safety is witnessing a huge new crisis.In order to break the green barriers for our dairy products to go overseas and effectively guarantee the implementation of our overseas strategy of dairy enterprises,mesures should be made by dairy enterprises to ensure the dairy products' safety and quality.This article to study the internationalization of Chinese dairy products,the use of case studies and comparative research method,the selection of well-known Chinese dairy enterprises Light Group,Mengniu Dairy as a case,through the history of the two companies,international history,The characteristics of the comparison,to start China's dairy enterprises internationalization of the study,and the dairy industry in China to make the future of international outlook.This paper intends to study the internationalization of Chinese enterprises under the tide of the dairy industry,the specific case of internationalization,so that the internationalization of enterprises have a concrete understanding.In the first part,the article introduces the definition of internationalization and the well-known theory of internationalization of enterprises.The second part reviews and analyzes the development process of China's dairy industry and the characteristics of the present stage,which has a macro control of the Chinese dairy industry.In the third part of the article,we began to introduce and study the two cases of this article:Mengniu Dairy Co.,Ltd.,Bright Food(Group)Co.,Ltd.,through the history of these two cases,the internationalization process,future strategic outlook comparison and research,Come between them common and personality.In the fourth part of the article,it summarizes the problems and characteristics of the internationalization of Chinese enterprises and puts forward opinions and suggestions on the future internationalization of Chinese enterprises.