BIMBO GOES TO CHINA. The Art Of War Analysis

The Art of War

Bimbo goes to China

According with the Art of War, Terrain is an important issue to consider in the war endeavor and translating it into the business background, the complete understanding and dominium of the market is could be an advantage over the competition.

“Ground may be classified according to its nature as accessible, entangling, temporizing, precipitous, distant, or having narrow passes.”

To understand it better, we are going to analyze Grupo Bimbo and they decision to enter China’s market. We can say that China is an accessible ground “Ground which both we and the enemy can traverse with equal ease. On such ground, he who first takes high sunny positions, and keeps his supply routes unimpeded, can fight advantageously.” due to the size of the market and the economic growth that the country has been experiencing.

Bimbo’s Globalization challenges:

INDUSTRY COMPETITION: Highly fragmented and competitive industry structure, with different players in different countries.

DEMAND PATTERNS: Consumption habits heavily influenced by cultural legacy, demographics, tastes, fashion (e.g. low-carb diets in the US and a tendency all around the world), and price sensitivity.

DISTRIBUTION NETWORK S: Retailers bargaining power and location, country geography, transportation infrastructure, as well as labor relations affect distribution chain and costs

ADMINISTRATION: Regulatory frameworks vary widely among countries for labor relations, new business registration, bankruptcy filing.

Let review the SWOT analysis to get a better picture about it, as Strength Bimbo adapt to Lessons learned, Brazil and US entry experience, able to understand the Chinese consumers’ needs through past experiences and in-depth research (focus group), able to adapt to Chinese culture (“Learning the Chinese way”), strong market position, thanks to the Chinese company acquired that has strong market share (55% and 35% market share for Beijing, Panrico Food Processing Center), able to successful implement promotional strategies based on adaptability (successful in store promotion, university road shows, product samples, etc.), strong employee involvement (Motivated to learn).

Bimbo’s Opportunities will be that China has a well-established distribution network, technology advancement to increase product shelf life and production process, increase productivity, being able to capitalize on making new products with local recipes and capitalize on acquired company’s existing local products, has the opportunity to gain more market power in hyper market chain, able to generate large revenues from the large Chinese population, increased consumer health awareness, nowadays consumers switch to low carb diets Fast-growing and developing bread market .

They main Weakness is the pricing and segmentation strategy, Panrico did not managed it properly.

The Threats are that China market is highly fragmented, local and international competitors also have networks, factories and expertise in marketing and production, the 84% is still small artisanal and other shops (so they may have price competition), the Maintenance issue in Product quality with the production standard in the factory, diverse

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