Global Expansion of Tsingtao Beer in North America

Executive Summary

        China already the largest beer market globally in volume terms and it is set to overtake the U.S. as the world's largest beer market in value by 2017. Tsingtao beer is the 2nd largest brewer in China and it has developed well in China beer market and gain lots of benefit for its global expansion. There are lots of beer markets among the world but Tsingtao cannot its business in all market rapidly. Thus, North America will be the first target that Tsingtao would like to acquire. North America is well develop with high economic freedom and large beer market. Apart from those attractive factors, there are few challenge facing there such as heavy competition, brand of “made in China” and side effect of alcohol drinking. In order to expand its business, Tsingtao should overcome those challenge.

[pic 1]

Introduction

        China is the fast growing country in the world. After joining WTO, lots of local companies are facing the competition from multi-national companies and globalization. China is the world’s factory floor. Most of global products are made in China such as Mattel’s products. But it is hard to name an international famous Chinese brand before. Nowadays, the global brand was born in China, Tsingtao Beer is one of them. It is well-known China brand which is able to capture the foreign market effectively.

Background of Tsing Tao Beer

        The Company, the earliest brewery in China, can trace its root back to 1903 when its predecessor, the State-owned Tsingtao Brewery Factory, was established. The Company’s business scope is production and sales of beer, and other related business. At present, the Company occupies leading position in the domestic beer industry in terms of size and market share with 55 wholly-owned and controlling breweries, and 12 associated and joint-investment breweries in 20 provinces, municipalities and autonomous regions in China. Tsingtao Beer is the most well-known Chinese brand in the international market that it is distributed to more than ninety countries and regions throughout the world (Source: Annual Report 2014, Tsingtao). Tsingtao beer was ranked No.10 of the most valuable Chinese brands of 2013.

Beer Market in North America

        Tsingtao need a oversea market for its future expansion and global business. North America would be the 2nd market that Tsingtao to implement its global expansion. There are several reason for choosing North America as its global expansion target.

Well-developed Country with potential market

        Canada and USA are one of the most developed countries among the world. They have similar cultural, living standard and economy development. Comparing with Germany, United Kingdom, France, Italy, Australia & Korea, North America is much well-developed among them. According to International Monetary Fund (IMF), USA and Canada have about 319.047 and 35.492 millions population respectively which is more than the total no. of population of six countries Germany, United Kingdom, France, Italy, Australia and Korea. The no. of population is the basic foundation for the market size and it can ensure the demand of Tsiangto Beer.