Wang's+Fortune+Tea+Case


 * Wang's Fortune Tea Case**

__** Case Analysis Template **__
Reading:WANG’S FORTUNE TEA FROM CHINA: COMPETING FOR A NEW ARENA OF THE BEVERAGE MARKET (A)

Who: Wang’s Fortune Tea Executives

Immediate Issue/Problem Being Faced: How could Wang’s Fortune Tea cope with increasing competitive pressures, while maintaining its market share and growing profitability?

Basic Issues: -the Chinese government has the ability to take control of the business at any given moment as it happened in 1949-1994 -A significant portion of the Chinese population does not understand the benefits of herbal tea and the cost of educating this demographic will be high -Wang’s Fortune Tea must decide to market this product as a medicinal product, a social soft drink, or both. Each will have their own barriers -We must question the validity of the claims being made that this tea cures disease. If this is proven to be false at any time, it could be fatal to the company -How will they make the product more accessible to the larger market? -Unclear brand identity. Consumers are sure they want to buy it, but are not entirely sure what it is -The value proposition for the product was often inconsistent due to the lack of awareness of the supposed benefits of the tea -The Chinese consumer was becoming more health conscious and their needs were changing -Domestic competitors on the rise -the consumers were typically loyal to traditional brands, Wang’s being one of them -out of the Big 4 tea companies, it seemed everyone was gearing up for massive expansion

Urgency/Importance: -The rise of competition was occurring at a rapid rate -Competition was multi-layered and represented everything from direct regional to international competitors

Decision Criteria: -The alternative must allow for growth in market share and profitability -it must allow for the product to expand its reach to the greater China -it must continue to make its product accessible to the higher, middle, and lower classes of China through accurate price points -It must include the least risk while expanding -It must considered the social responsibility in China. -It must be effective in short time as result of limited time of innovation.

Alternatives: 1. They continue producing the same taste of their herbal tea, but they change the design of packaging. 2. They add other more health materials into the formula and produce new products 3. They will add more methods to increase the marketing, such as more advertisements in the media and apply the promotion for the price 4. They will increase the social responsibility and reputation by doing non-benefit volunteer contributions to the society and doing recycle the bottles to achieve the green environment. 5.Begin the strategic acquisition of a number of small-medium sized companies in order to gain exposure to the larger Chinese market 6.Begin the strategic alliance with an international company. This strategy would allow for each partner to take advantage of their reach and credibility in opposite markets..

Missing Information: The information, such as sales and needs, about the herbal tea market in the world The information about the production line, including if they grow their herb, if they outsource the package, if therir need is larger than demand?

Assessment of Alternatives: 1. Continue producing the same taste of herbal tea and change the design of package advantages: - They royal customers will choose it - Through the package, customers know the company developed and looking for the change, and more people will buy the product -New package maybe attract more eyeballs and this could be a good gift when chinese troditional festvals. disadvantages: - It will increase the cost to create the new design - It keeps the herbal tea in the maturity level in the product life cycle, but if the customers' taste change, it will easily go into the sales decline stage, which is not a good way to innovate. -Thethought of public is hard to guess, there is a risk of fail to this innovation. 2. Development and research and produce new product advantages: - It will attract more customers and the product is based on the taste of customers. - It is the new innovation for Wang's Fourtune Tea and increase sales -The new product can adapt to the needs of market better than before disadvantages: -The innovation needs time and cash flow. -The innovation may distort the functions of Wang's Fourtune Tea by just following the taste of young customers. -This new product maybe useless for expanding the market. 3. Increase the marketing advantages: - It will attract more customers - It will increase the reputation for the company disadvantages: - It will increase the cost -This can not solve the basic proplem and the competitors also take the adventisement. 4. Increase social responsibility advantages: - It will increase the reputation for the company - It will easily expand the global market -It will be support by government like some tax free policy. disadvantages: - It is a long time project and need to continue doing it. -There is no income from this, and this can be the burden for company. -The feedback from this is complex, things good for expanding market maybe less. 5.acquisition of a number of small-medium sized companies advantages: -This could be easy to control and implement -The market size will be increase quickly. -The reputation of company can be increased by this disadvantages: -Company will cover the bility of small companies. -Need time to change management to restructure -It could be dangerous for the cash flow of company

6.alliance with an international company advantages: -The sources of company will be increased -Save more time and cost to innovation -New partner can bring the new chances. Disadvantages: -Benefit will be shared -There are some limits from the partners. -Maybe cannot find good partner out of china.

Selection of Preferred Alternative: The alternative 4 is good one. Because the company in china need good reputation and supports form government in order to get better performence and bigger market shares. The support from government can be kind of advertizment for company, and this could be accept by public easier. Besides, the green produts adapt to the wave of protecting environment, this can get good impression from public. Assumptions: -Company has enough extra money to surppot his non-profit career which should have few influence on the operating business. -There is policy for this action from government to protect and support comepany. -The public pay attention on this to increase their impression. Action/Implementation Plan At the beginning, company need make a deeper research about the product and market to figur out the place could be developed. Analyze the information come from market to set up right stretagy. Communicate with government to show the honest and the importance of contrubution. During the time of investing, take advantages of the support from government to popularize the function of tea to public.