MNC In China Case Study

The Development Of MNCs’ Marketing Strategies In China In The Dairy Industry

By the case of Arla Foods Amba in China.

Supervisor

YiMei Hu [e-mail]

Submitted by:

Nan Zhang [e-mail]

Submitted on: 5th August, 2015

Number of words:

Abstract

This project provides a comprehensive analysis of the marketing entrance and development strategies’ in China for a MNC (Multinational Corporation) within the Dairy Industry. The scope of the study is narrowed down to the marketing strategies made by the leading firm in the dairy industry, Arla Foods Amba. In order to build a theoretical framework of the analysis, the Porter’s Five Forces Frame, the Value

Economists holding this perspective tend to argue that organizations are likely to make deliberate decisions or commence a change in order to benefit from the situation in the environment. As an example of this view is the S-O-R (Stimulus-Organism-Response) model, which represents the entity's reaction provoked by some external impulses (Kuada, 2010).

Structuralism stipulates that elements must be understood in terms of its relationship to a larger, overarching system or structure, therefore it emphasis on the collective rather than the individual. A demonstration of the structuralist approach in the business area is the analysis of certain company's characteristics such as size, type of industry, number of competitors and buyers etc. (Kuada, 2010).

Interpretivism could be defined as a contrasting to functionalism. It emphasises the necessity of occupying the frame of reference of the participant in action (Burrell & Morgan , 1979). Thus the researcher needs to achieve internal comprehension about the events and its context. Furthermore Interpretivism stipulates that individuals are not passively responding to the environment (Kuada,

Powerful suppliers, including suppliers of labor, can squeeze profitability out of an industry that is unable to pass on cost increases in its own prices. Companies depend on a wide range of different suppliers groups for inputs. A supplier group is powerful if:

• It is more concentrated than the industry it sells to.

• The supplier group does not depend heavily on the industry for its revenues. Suppliers serving many industries will not hesitate to extract maximum profits from each one.

• Industry participants face switching costs in changing suppliers. When switching costs are high, industry participants find it hard to play suppliers off against one another. (Note that suppliers may have switching costs as well. This limits their power.)

• Suppliers offer products that are differentiated.

• There is no substitute for what the supplier group provides.

• The supplier group can credibly threaten to integrate forward into the industry. (Porter, The Five Competitive Forces That Shape Strategy, 2008)

3.1.3 The Power of