Articles Summary: Heinz Emerging Market by Bill Johnson
KFC’s Radical Approach to China
Heinz emerging markets
The growth of the Heinz’s sales in the developing countries, such as China, India, Indonesia, Russia, and Brazil, is increasing quickly in recent years. Bill Johnson, the CEO of Heinz, thinks that referring to these countries as the emerging markets is not accurate anymore. They have huge consumers and high quality supporting industries. Focusing on this situation, Bill developed the Three A’s long-term strategy. The first A is “applicability” which means that the products should be suitable for the local culture. The second A is “availability” which means that the marketing strategy should be effective for the local population. The third A is “affordability” which means that the pricing strategy should be reasonable for the local conditions. And then a few years later, there is an added fourth A “affinity” which means that the relationship should be closed between the local employees and the local consumers and the company. The approaches to evaluate acquisitions in the emerging markets, which are different from the methods in the developed countries, are considering the per capita consumption trends, the macro environment and the overall state of the category. The issues in the developed economies, such as the tax system, the regulatory environment, currency trends, and the political climate, are easier to be compared with the problems in the United States by these governments’ authorization. However this process may take longer time in the emerging markets. Managers should try to avoid the business risks in the emerging markets by the diversifying. But the balance between the risk and the potential reward is also should be considered by the business managers. The developing process in the emerging markets is a long-term strategy. The products should tailor to the local tastes, and then there may be...
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