The company had been enjoying success in the Hong Kong market for nearly 5 years. Yet their 18-month-old operations in Mainland China were clearly facing problems. Sales were down despite high customer satisfaction and success early on.
After enjoying early success in the Taiwan market, Beer Co. expanded into local markets in southern China. However, the company was losing money in Mainland China and market share in Taiwan. They approached Mersol & Luo because they needed a change in strategy to shift from loss to growth and profitability.
The company was preparing to make a major investment in pass production of several product types in China. However, they had two concerns: 1) was their contract manufacturer capable and reliable and 2) was their plan feasible given in the Mainland China market given recent regulatory changes?
The company was already present in Hong Kong and, having found success there, wanted to expand into Mainland China, a neighboring market. However, it was unsure if it was financially feasible to enter Mainland China and, if so, how to successfully expand their business into the market.