Case Study - Tapping (beer) into the chinese supplier market

Résumé du document

The current problems AB InBev has to solve are mainly to find the right suppliers and the right products, …

Extraits

[...] What are the pros and cons of having an IPO as a shared service centre? An IPO proves useful to coordinate several autonomous entities, like a national state and its subdivisions. It analyses the needs of a particular market and aims at providing it with the right products, along with other markets, instead of each of them conducting the search individually. It is particularly interesting, as one single voice has more weight in negociations with external suppliers. However, like for a country, the IPO might tend to centralize things, calling for more standardization in products and practices. [...]

[...] However, all markets are different, even more so in Europe than in generally similar areas like North and Latin Americas and China, each having hundred of millions of consumers with the same language and basically the same consumption pattern. Packaging then requires localization. As well, one may doubt about the raw materials. As the document says, beer is a low-price product whose haulage makes it not so interesting as local production. Apart from carrying water, the main element of beer, which has little commercial value compared to the shipping costs, the brewed cereals are specific to the soil where they are grown, giving them a distinctive flavor. [...]

[...] What did AB InBev do to set up an IPO in China? It took some time for AB InBev to settle in China. It started with a business trip of the top-level staff to analyse the strategy of other companies (Procter and Gamble, Unilever) and to meet the local professionals in the brewing industry in order to know the suppliers, their manufacturing processes and ascertain the quality of their products. Drafting the project and making the dream come true in technical terms seemed pretty easy and quick, only a few months. [...]