Rougemont Fruit Nectar Analysis
MEMORANDUM
Success in the Chinese’ fruit beverage market is contingent upon distribution decisions made by firms in the market. Many companies have failed to prosper in this market due to poor distribution decisions. However, the Chinese fruit beverage market is attractive. The advantageous nature of this market is revealed by examining competitive rivalries, and the social, economic, and political forces that will affect your firm’s ability to successfully compete.
Because your firm’s product will be marketed to China’s high-end market segment, competition is low. Chengbao, is your firm’s only competitor. However, Chengbao’s product, unlike your firm’s product, requires consumption within five days. Also, Chengbao only targets high end hotels and restaurants, leaving out potential consumers who don’t frequent these establishments. As for substitutes, there are few threats, because there are no products available in the market that will have the same thick consistency as your firm’s product. Other products that are thinner in consistency aren’t being targeted towards the higher income market that your company is targeting, so these products will not be substitutes. Further, thicker juices are viewed as better quality in China. Economically, reforms in China resulted in the rise in income levels. As a result, Chinese consumers are beginning to demand fruit beverages in their daily diets at the expense of cheaper substitutes because of the perceived health benefits they offer. An issue that may detract from the attractiveness of this venture is the high threat of new entrants. As the Chinese government continues to deregulate their businesses, outside corporations are able to enter the Chinese market facing few barriers.
Beijing Oasis’ fruit nectars fit within the market’s needs. The Chinese market does not contain many firms who are able to offer real fruit juice. Most juices are diluted concentrates. Your company produces high-quality
Success in the Chinese’ fruit beverage market is contingent upon distribution decisions made by firms in the market. Many companies have failed to prosper in this market due to poor distribution decisions. However, the Chinese fruit beverage market is attractive. The advantageous nature of this market is revealed by examining competitive rivalries, and the social, economic, and political forces that will affect your firm’s ability to successfully compete.
Because your firm’s product will be marketed to China’s high-end market segment, competition is low. Chengbao, is your firm’s only competitor. However, Chengbao’s product, unlike your firm’s product, requires consumption within five days. Also, Chengbao only targets high end hotels and restaurants, leaving out potential consumers who don’t frequent these establishments. As for substitutes, there are few threats, because there are no products available in the market that will have the same thick consistency as your firm’s product. Other products that are thinner in consistency aren’t being targeted towards the higher income market that your company is targeting, so these products will not be substitutes. Further, thicker juices are viewed as better quality in China. Economically, reforms in China resulted in the rise in income levels. As a result, Chinese consumers are beginning to demand fruit beverages in their daily diets at the expense of cheaper substitutes because of the perceived health benefits they offer. An issue that may detract from the attractiveness of this venture is the high threat of new entrants. As the Chinese government continues to deregulate their businesses, outside corporations are able to enter the Chinese market facing few barriers.
Beijing Oasis’ fruit nectars fit within the market’s needs. The Chinese market does not contain many firms who are able to offer real fruit juice. Most juices are diluted concentrates. Your company produces high-quality