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Case Analysis

In: Business and Management

Submitted By edricktan
Words 608
Pages 3
1. Apply Porters model of industry competition in China and Australia. What are the key implications for Lion Nathan’s marketing strategies in both of these countries?
Porter’s model of industry competition is one of the strategic tools to plan for long-term as well as to evaluate the current situation of the company. According to Grundy (2006, 215), Porter’s model of industry competition can also determine the profitability of the company. There are five forces involved in the model such as threats of new entrants, bargaining power of buyers, bargaining power of suppliers, rivalry within the industry, and threats of substitutes.
China is a large geographic market compared to other countries and brewing industry in China is highly fragmented. There are more than 600 brewers in 1998. To apply Porter’s model of industry competition to China market, the threats to Lion Nathan will be different according to the region but this application is an average application of Lion Nathan China. Firstly, the threats of new entrants has the high rank for LN China because the case described that there is a growth potential for brew industry and it makes more attractive to international brewers to China. LN China can also have high bargaining power of buyer because there are many other beer producers in the country and customers will have more choices to buy. For bargaining power of supplier, there will be medium threat to LN. As LN is a large company in China, they will have strong supply chain for their products. Rivalry within the industry is highest threat to LN as the case described about major brewers and brands in China which covers premium, mainstream and low end beers in China. There can be many substitutes alcoholic drinks available in China market so that LN China will have medium threat of substitutes.
For Australia market, there are both high and medium threats...

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