Anheuser Busch and Harbin Brewery Group of China Essay

Anheuser Busch and Harbin Brewery Group of China - Essay Example It is because of this fact that no particular local player emerged as the leading national beer producer in the country. The government intervention in the market is not up to that extent as normally considered by outside players. Since the industry experience very small margins and mushrooming of the low cost producers of regional level therefore there is a greater threats of substitutes for AB to enter into the market. As discussed in the case that no international beer brand has been able to make in-roads into Chinese Consumers subtly suggest the level of strong presence of substitutes developed according to the taste buds of the local consumers. The lack of market space for the leading beer brands of the world suggest that the substitutes have strong presence in the market and pose a greater threat. The threats of substitutes are from moderate to High. If the basic use of beer is just to quench the thirst of the consumer than the threats of substitution can be high however since Chinese consumer prefer to have some level of liquor in it therefore the scope of substitutes get bigger as wine and liquor products also become direct substitutes of our products. It has been the strategy of Chinese government to allow the entry into the Chinese Market through the formation of Joint ventures with the local companies in order to help the local players to gain technology and management expertise. Thus the biggest barrier to the entry into the market is the fact that companies looking for making in-roads into the Chinese Markets have to find local players to pair with as they themselves cannot start the sort of Greenfield projects. The current experiences in the Chinese Market suggest that the companies that have brought in foreign capital in the country has been not been able to sustain in the longer run therefore they have to look for the local players to take over their stakes in the