Question

In: Operations Management

Read the case “Cola Wars in China: The Future Is Here”. In light of the case...

Read the case “Cola Wars in China: The Future Is Here”. In light of the case (only use the case narrative – no external sources about Wahaha are approved) AND materials covered in the course, answer the following questions: Which business-level strategy was Wahaha following? Does it make sense? Explain. List the competitive tactics Wahaha used to gain market share in China. Keeping the timeline in mind, which 2 of these strategies/tactics proved to be most effective? Support your answer. Which corporate-level strategies should Wahaha adopt/continue (given the case information) to compete successfully against such large MNEs? Explain.

Solutions

Expert Solution

Wahaha is the biggest beverage company in China. This company was founded in 1987 which was start as a soda water bottling company as well as ice cream stationery company to the children. Company was started by having a specific focus on children with its nutritious drinks. This is specific industry consistently grew, availability of competition horror specific brand was also increased. Company consistently launched their new products such as future cooler as well as other products in the respective market. Company has been competing with other brands such as Coca Cola and many of the Other brands in the respective environment where Coca-Cola, Pepsi, Nestle and Danone are the main competitors in the respective environment of operation. Wahaha has been consistently showing growth where availability of output capability for the specific brand has consistently increased over the years. As Chinese beverage industry is accepting multinational investments there is consistent growth in its respective environment of operation.

Company is using marketing tactics where it is the regulating the brand with healthy as well as wholesomeness with quality and reliability criteria to sell their products. They are targeting the market including milk drink, packaged water, carbonated drinks,tea, juice drinks and other specific healthcare and food products. As the company is directly originated from Chinese culture they understand the requirement of the Chinese people and implementing the promotional strategy on the basis of the specific market has always been a better criteria of operation for the company in the respective environment.

Company has a specific line up such as future Cola having a taste specifically modified for Chinese people. Price is exceptionally lower from other competitors in the respective environment where the availability of the product is extensively big as it goes to the smaller villages our town and have a very strong relationship as well as very high ability to reach remote corner in China. Company has a strong complaints policy where it focuses on long term goals of Gain as well as security deposit. Extremely strong sales force distribution in the respective environment of operation is also a one of the most positive point for the company.

Company has been using TV Advertisement as the primary tool to build market awareness and to influence the customers. Company uses CCTV news channel as a tool to develop a separate brand identity in the respective environment and specifically provide advertisement during the world soccer Cup. Company has been always sponsoring CCTV spring party and also spend 34 million RMB for the future cooler launch and implementing and outdoor advertisement strategy. Company also encourages to promote travelling film shows across the village where celebrities and other slogan endorsed with the specific company.

Company has a very strong advantage where it is targeting children in the beverage industry which is not focus by any other brand in the respective environment. Companies basic motive is to create a brand that makes children happy with their specifically attractive slogan saying "drinking Wahaha boosts appetite". Company has been diversifying their product range by a huge margin as well as implementing the same service in its respective operating environment creating a change in Operation. This technique of local adoption and consistently increasing its adaptability in the local environment has provided adequate level of support to the company to fight with the multinational organisations in respective environment and create a separate identity in China to create a Bad Influence on people by targeting a different market segment.


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