Wall street journal - Essay Example

Chinese Beer Market The new American generation is consuming less volumes of beer. The present American generation continuously shifts from beer drinking, to consuming more wines and spirits. The beer consumption change is due to the gradual preference change that took place during the last 20 years. The beer brewers have greatly ignored, investing in wines and spirits production (Tom, 2013). It is an important idea to build one large brewery in Chinese market. The company will benefit from economies of scale if beer production and distribution is centralized.

Additionally, spreading out beer production plants is an expensive project. The largest beer company globally is Anheuser-Busch InBev. The company distributes products globally through an international supply network that [partners with local distributors. The company should partner with established Chinese brewers, this will enhance business expansion. Partnering with Chinese brewers enables the company to reach a wider Chinese market. The company can also share resources with the Chinese brewers; for instance, new production technology that caters for the interests of Chinese consumers (Tom, 2013).

Transferring beer production activities to China is one example of off shoring. Off shoring entails the transfer of business or production processes from a given country to others like China. Off shoring also entails the outsourcing of production, administration and technical services, supporting international operations away from the home country (Tom, 2013). The top beer drinking nations are; Czec Republic, Ireland, Germany, Poland, and Croatia. The countries consume the highest beer volumes per capita.

The company will market Anbev products in Germany, through partnering with local brewers and supply networks. This will minimize the costs involved in independent beer production and supply.ReferencesAcitelli, Tom. (2013). The Audacity of Hops: The History of Americas Craft Beer Revolution. Chicago: Chicago Review Press.