Forecasting The Future Trends Of The Beer Industry In China

Despite having been conceived just over a century ago,the modern day beer industry in China has witnessed consistently positive growth in regards to both consumption and production of beer over the past three decades.As a result,China has already surpassed all other countries in terms of establishing itself as the global leader in both beer production and consumption.The development of the beer industry in China can be characterized as relatively stable;however,new trends have recently emerged that could alter the landscape of the industry.The gradual diversification of Chinese consumer preferences and the over-saturation of the mass-produced beer market exemplify a new phase in the evolution of the industry.Consequently,beer producers in China are at a crossroads.Shrinking profit margins,geographical discrepancies in terms of consumption,and product homogenization have caused beer producers in China to re-evaluate their approach to these emerging trends.The underlying factors that perpetuate these issues are the current structure of the beer market and the competitive tactics adopted by firms within the industry.Given these developments within the industry,this thesis incorporates both a theoretical and practical research methodology in order to forecast the future development of the beer industry in China.A comprehensive approach is applied by combining foundational economic theory,econometrics,and game theory in order to analyze market structure,industry competiveness,and the corresponding competitive approach adopted by firms operating within the industry.The result is a six chapter,in-depth research study that provides extensive analysis of the factors influencing the future development of the beer industry in China.The first chapter introduces the topic background,research methodology,and content overview.The second chapter reviews the findings and theories of relative academic literature that serve as the foundation for this research study.The next section initially introduces the developments of the beer industry from a historical perspective,followed by an outline of the current state of the beer market in China in terms of the market segmentation,market structure,and the beer producers and consumers that compose the industry.Additionally,the relevant macro and micro environments in China are detailed in order to gain a comprehensive understanding of the present status of the beer industry.Following the introduction of the current state of the beer market is a multi-variate regression analysis of the factors influencing beer imports into China.The purpose of this portion is to outline the positive growth trend of beer imports into China,thus establishing the shift in the preferences of Chinese beer consumers towards higher quality,differentiated beer.The fifth chapter explores both the price leadership and non-price-based competitive strategies currently adopted by mass-produced beer firms,and establishes the non-price-based,product differentiation strategy as the superior approach.The concept of product differentiation in terms of the beer industry is illustrated by the emergence of the craft beer revolution;this section elaborates on the advantages of craft beer for mass-produced beer firms and forecasts the future of the high quality craft beer market.The final section of this thesis outlines the conclusion of the research study,acknowledges the limitations of the study,and puts forth suggestions for future research.This thesis applies foundational economic theory to analyze the structure of the beer market in China,the competitiveness of firms operating within this market,and the ensuing competitive strategies adopted by firms seeking to gain additional market share.The focal point of this research study is the application of game theory to analyze the price wars thatcurrently plague the market,thus illustrating the deficiencies of the price leadership competitive strategy while simultaneously establishing the opportunity for growth via product differentiation.In reference to the market structure,Porter's five competitive forces model serves as the basis for the analysis of the competitiveness and competitive practices of the four firms that function as the industry oligopoly.In regards to the craft beer industry,field research and formal questionnaires were applied in combination with foundational economic theory to forecast the opportunity for growth for.the future market in China.While the findings of this thesis present significant implications in terms of the development of the beer market in China,it is important to acknowledge its limitations as an economics-based research study.The impact of culture,gender,and geography on the development of the beer industry in China are important factors to consider and thus warrant additional research and exploration.