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Coca Cola's Challenge in China: Healthy Growth

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Coca-Cola was one of the first MNCs to enter post-reform China. The soft-drink manufacturer established robust market share on the back of a strong brand. Chinese consumer preferences, however, gradually changed: they preferred “healthy” drinks over soft drinks. As a result, Coca Cola's competitive position eroded as foreign and domestic competitors released new products.  After a failed high-profile M&A attempt, Coca-Cola faced a strategic challenge: develop new products in-house or attempt to acquire them?

Learning Objective:

1) To use Porter’s five-forces analysis to evaluate change in China’s beverage market in comparison to more developed beverage markets;
2) To understand how MNCs in China, in light of Coca-Cola’s experience, are revamping their business models with an increasingly competitive industry landscape and regulatory challenges;
3) To assess how different cooperation models with local firms, including strategic partnerships and M&A, can help boost a firm’s competitive position.

Year of Publication: 2017
Ref. No.: 16/583C
Discipline: Economics & Business Policy, Strategy & General Management
Industry: Food & Beverage
Country: China (People's Rep. of)
Company: The Coca-Cola Company
Languages: English
Pages of Text: 18