Case study: The adventure of Lion[]Nathan Group in China
Lion[]Nathan Group is an international beer & beverage listed
Company in Australia, whose revenue per year is more than 10billion
RMB. In the 90s of 21st century, many foreign bear enterprises had
joined the Chinese beer market, such as Heineken.
Lion[]Nathan Group also had the lion[]like ambition, since the
whole market proportion in Australia is less than the 10% in China. In
1995 Lion[]Nathan Group employed the McKinsey to make a project for
the development of east China. In 1996 Lion[]Nathan Group spent 170
million dollars to establish a beer factory which can produce 300
thousand tons beer each year. Among 1997 and 1998, Lion[]Nathan Group
spent millions of RMB to conquer the Shanghai Market, but at the end
of 1998, Lion[]Nathan Group lost 200 million RMB. The loss was due to
the lack of local management. If they the management had been
localized, they would not have extended so fast.
Lion[]Nathan Group was blindly optimistic about the Chinese
market, but their localization was not good enough. Product
positioning was not suitable with the Chinese consumers. The prices
were too high for Chinese consumers at that time. （Lu, 2005:106）
Conclusion:
The first period stated in early 1990s and lasted to early 21st
century. and Feature of period was using foreign brand to enter
Chinese beer market Because the foreign brands were too optimistic
about but lack of knowledge of Chinese[]beer market, they ignored the
importance of localization which was the main reason they failed.
Then, they had to sell the factories they invented a lot of to build
to the China national beer breweries at low prices.
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