Danone is not the only foreign company whose efforts have gone sour in China. Major
multinationals-from Unilever to Carlsberg
to Quaker Oats-have also struggled to make headway there. The problem isn t their
products. Nor is it a Chinese aversion to foreign brands. And it s certainly not the companies starting point; almost all foreign brands aim first at the premium segment. Rather, it s their approach to broadening market share.
A handful of
multinationals-Colgate, Coca-Cola, and Anheuser-Busch among them-point to a better path. Through a careful combination of pricing, positioning, distribution, and acquisition, they ve managed to turn a toehold in China s premium segments into a rapidly expanding market. They use three key strategies.
Close the cost gap.
But companies using local suppliers can close the cost gap.
Add products and channels.