Question

Kraft chose to "export" the Oreo brand direct to China. Evaluate the advantages and disadvantages of this approach (export approach) compared to setting up a joint venture.

Need exactly 400 word. No more, no less. Give me the references with correct APA format.

Answer 1

The advantages of the approach of choosing to "export" the Oreo brand direct to China are cost savings as the product could be tested in Chinese market without investing in infrastructure and facilities. The resources could be more invested in Marketing and developing the distribution than in manufacturing. The disadvantages of this approach are the Oreo brand could not be modified as per local Chinese customer taste and preferences. There was a problem in acceptability of a foreign brand that was different in the taste from the normally sold cookies in China. After establishing the operations in China, it was easier for the brand to win the trust of local consumers, expand the brand distribution, invest in research and development and improve the profitability of the brand in China with increase in popularity.

The brand launched flavours specific to Chinese markets that was not possible with the other approach "export" the brand. Kraft also launched other food products in the range with Oreo when it established local manufacturing facilities in China improving brand presence and introducing more variety of the brand.