Harvard Business School Case Study: Parker\'s Biscuits

Harvard Business School Case Study: Parker's Biscuits

China is quickly becoming just as much of a consumer as it is a major international manufacturer. This has led many foreign companies to begin working in China, not just to manufacture and export goods, but to sell to Chinese consumers as well. The food industry had slowly begun bringing in foreign snacks and goods to serve this growing Chinese consumer base, showing that there was a great opportunity within China. Parker's Biscuits was looking to expand its empire by possibly entering into a joint venture with China to manufacture and produce their cookies and biscuits. Although the company does need to build some of its core competencies to succeed, it already has experience working with joint ventures in Asia and therefore has a competitive advantage over other foreign companies with less knowledge and resources in terms of working within the Asian nation.

There are a number of capabilities which Parker's Biscuits needs to develop and strengthen in order to maximize their competitive advantage within the region. The Chinese government had long been encouraging foreign investment into joint ventures in the region. Thus, the environment was already primed for their entry, the company just needed to work out an investment and management strategy with the right local business to begin a joint venture with. Thus, the company needs to expand its research and development in China in order to be able to appropriately judge and forecast potential success with particular business partners. Part of this process is really getting engaged within the Chinese business environment, which would also help establish stronger relationships with potential business partners (Kanter 1994). The case study shows that there is already heavy competition in the region, which can make entry more difficult. Establishing strong collaborative ties with Chinese companies already working in the region will help lower those barrier entries and give the company an advantage over the competition. Working intimately with the partner will allow the company to expand its current product offerings to allow for more products that will be well received by the Chinese consumers, like expanding its noodle selection.

Still, the company clearly has a set of core competencies that will allow then to see some degree of success operating a joint venture within China. Quality product that is already quite well-known in the United States and abroad. The company had a series of products that were already popular in the international arena. In fact, Parker's Biscuits products were already sold worldwide and had a strong international consumer base that could provide them with the knowledge and experience they will need to begin a joint venture within the context of China. Moreover, the company was already set up to conduct business in China. It had been split into four regions that were then governed in terms of marketing, sales, and manufacturing. Of these four regions, one of them was Asia / Pacific, which already had ten factories located in New Zealand, Hong Kong, India, Indonesia, Malaysia, Taiwan, Thailand, and elsewhere. This means that the company already had two working factories within China, in Hong Kong and Taiwan, where Taiwan was already a joint venture. The Taiwan manufacturing plant does give the company a lot of experience working with operating a joint venture in an environment similar to China since 1985. The company had also gained a lot of experience through a Hong Kong joint venture that was working out of Shenzhen, especially the fine details about working in China which helps them understand how to approach another joint venture in China.