Name: Youstina Milad Ayed

ID: 292000065

Globalization Expansion Brief

-First, we talk about our topic generally what is globalization expansion, what its
importance, and what are the pros and cons of it.
Global expansion in strategic management refers to the process of a company expanding
its operations beyond domestic markets into international territories. It involves
developing and implementing plans to enter new countries or regions to tap into new
markets, acquire resources, and achieve long-term growth objectives.
Importance of Global Expansion in Strategic Management
Global expansion is essential for organizations looking to diversify their revenue streams,
access new customer bases, and leverage opportunities in different markets.
Globalization Definition:
For a multinational corporation like Oreo, globalization means an unlimited consumer
base without geographical limitations. No longer is it impossible to market American
products in China or Chinese products in America. Globalization is not, however, merely
a reference to the increase in global connectivity or to the success of multinational
corporations.

Globalization Pros and Cons:

Pros of Globalization:
 Access to New Markets
 Spread of Knowledge and Technology
 Enhanced Global Cooperation and Tolerance
Cons of Globalization:
 Increased Competition
 Exploitation of Labor and Resources
 Imbalanced Trade
Then we talk about our case study is about Oreo in China what is vision, mission, core
values, environmental analysis and what is growth strategy.
Oreo Case study
Oreo sandwich cookie is available in over 100 countries all over the world. This favorite
cookie is manufactured by Nabisco, a division of Mondelez International. While most
consumers know Oreo sandwich cookie as two round chocolate biscuits with a vanilla
crème filling in between, variations of the product can be seen in other countries. It
demonstrates how Oreo adapts around the world and to the different tastes and
preferences of local markets worldwide
This case study focuses on Oreo Global expansion and strategies for their new entrants in
China markets.
Oreo Mission statement :
We want our consumers to regard us as their primary snack food. We want our customers
to know that we have their wants and needs in mind along with working to create
products that will cater to their health-conscious lifestyles.
Oreo Vision statement :
We will lead the future of snacking around the world by offering the right snack, for the
right moment, made the right way.
Oreo core values :
Although Wonder filled represents a completely new twist for Oreo, the campaign
continues to embrace the cookie brand's core values: humor, imagination, social- ness,
and fun.
1) Customer Satisfaction: Customer satisfaction is our top priority because businesses
depend on it. We passionately care about the satisfaction of our clients. We are
committed to provide our best service to our customers in order to satisfy them and make
them loyal customers for our company.
2) Integrity :It is our core belief to do right things and adheres to highest ethical standards
of honesty and loyalty.
Environment Analysis for Oreo in China :
A) SWOT Analysis :
1- Strength :
 Oreo owns a variety of types of packaging, size, flavor, color, etc. They are about to
meet customers’ greatly varying preferences.
2- Weaknesses :
 Unappealing to Chinese consumer because expensive and the flavor was too bitter or
too sweet; China was not traditionally a cookie-eating culture.
 Selling at a premium Oreo was priced at a premium and noticeably more expensive
than competing brands on a per biscuit basis. On a per package basis, the absolute
price of buying Oreo was dramatically higher because of the large package size.
Distributors believed that the higher price and larger package size was a key factor
behind the poor sales. There were other concerns too.

3- Opportunities :
 Huge market potential in China, possibility of gradually introducing American
concept of pairing Oreo's with milk after successfully launching a product that would
appeal to the Chinese.

4- Threats :
 Ethnocentrism of Chinese citizens as Oreo is an American company
 Competition from local cookies brands ( The biggest local competitors for Oreo in
China are Lotus Bakeries’ Lotus Biscoff and Want Want Group’s Want Want Rice
Crackers.)
 Ignorance of the culture, refusal to find out what would appeal to the Chinese
consumer

B) PESTLE Analysis :
1- Political :
 People’s Republic – communist state is the form of government.
 Trade war - China part of WTO (2001) but was stealing IPs in USA (Huawei case)
and the Trade war from year 2018 – where is the ongoing economic conflict going
(possible extra tariffs and such).
US tariffs on $34 billion worth of Chinese goods became effective on July 6, and
China did the same on the same amount. These fees represent 0.1% of GDP.
On February 22, 2021, Chinese Foreign Minister Wang Yi called on new US
President Joe Biden to lift multiple restrictions imposed by Donald Trump. He
urged the Biden administration to lift sanctions on trade and people-to-people
contact, while calling on it to stop interfering in China's internal affairs.
-U.S.A.’s decision of having a border adjusted tax had a little effect on its sales.
Moreover, the anti-globalization measures taken by the U.S. government can also
cause other nations to introduce trade barriers which can further affect Oreo’s
revenues.
 China-US Relations: Tensions between China and the US can affect import duties and
consumer sentiment towards American brands like Oreo
 Government Regulations: China has strict food safety regulations. Oreo needs to
comply with these to operate in the market
 Urbanization: China's growing urban population creates a larger market for packaged
snacks like Oreo
2- Economic:
 Raising Disposable income : Disposable income in China is increasing, leading to a
greater demand for premium snacks like Oreo.
 Fluctuating Raw Material prices: The cost of cocoa, wheat , and sugar can impact
Oreo’s production costs and profitability. One of the most important factors which
affect Oreo’s performance is the price fluctuations in the raw materials like Cocoa,
 wheat, sugar etc. The company said that Cocoa which is one of the most primary
inputs required for making the Oreo cookies is fluctuating since the past 12 months.
Any increase in its cost can cause Oreo to either increase its pricing or going with
lower margins. Both ways, it’s profits can decrease significantly.
3- Socio culture :
 Collectivistic culture (people are encouraged to do what is best for society and family
is in a central role). This result how the people think, feel and act in the. How to
market: Soft sell marketing - you’re very friendly and respectful towards your
potential customer.
 The huge portfolio helps it in reaching out to a bigger audience and providing its
customers with variety of cookies to satisfy their taste buds. The primary buyers of
Oreo cookies are Children and teens aged between 6 to 18 years.
 Focus on Health: There's a growing focus on health in China. Oreo may need to adapt
by offering healthier versions of its cookies.
4-Technological :
 The current value of China’s e-commerce transactions is estimated to be larger than in
France, Germany, Japan, the United Kingdom, and the United States combined.
(McKinsey)-Especially targeting area along with the cities. High e-comm (Alibaba,
Baidu) Offering in the market-mobile payments - growth.
The three digital forces: Disintermediation – linking supplier and industries together
“digital disruption”. Disaggregation – reinvention of industries – the turn of industries
into services – concerning more on the shared economy .Dematerialization – access
to products anywhere, any time.
 Emphasis on Innovation: Innovation in packaging and flavors can help Oreo stay
competitive in the Chinese market.
Legally :
 Food Safety Laws: Strict adherence to China's food safety laws is crucial to avoid
legal issues
 Intellectual Property Protection: Oreo needs to ensure its intellectual property (like
trademarks) is protected in China
6- Environmental :
 Green development - China has relied for decades in huge energy consumption and
excessive environmental pollution. To face the environmental issues this has caused
the government has invested on industrial pollutant governance and environmental
protection and incorporated it in the 5-year-plan. China is expected to become a
world’s leader in developing a low-carbon economy.
 Sustainability Concerns: Consumers are becoming more environmentally conscious.
Oreo may need to adopt sustainable practices in its production and packaging.
Oreo Growth Strategies in Chinese market.
1- Market Penetration :
In this strategy Oreo intensifying marketing efforts and launching promotional
campaigns.
Thus, in order to capture a bigger share of the market in China, the company introduced
variations of Oreo that were different from the original appearance. They came up with
an Oreo with four tiers of crispy wafers. The filling consisted of chocolate-coated
chocolate and vanilla cream.
-Oreo launch new package designs in feasts Like Christmas and the year of the dragon
festival.
Launched ads and campaigns, Lottery prizes , Yao Ming as a representative and stress on
point that Chinese society is collectivistic society in their ads by showing Daddy and son
or two brothers’ kids and scenes of family eating Oreo in their ads.
- Market share grew by 10 times over the past 5 years.
- Most of the advertising campaigns of Oreo in China focus on children, who are the
center of all families in the country.
-Moreover, the cost-conscious Chinese customers found the cookie a bit expensive.
They changed the packaging as well, introducing smaller packages that cost less.
Oreo immediately increased its sales with the changes that were introduced.
2- Product Development :
A green tea flavored Oreo was introduced in China when the brand’s sales lagged. The
cooling sensation provided by the tea-flavored filling evokes the feeling of having
ice cream.
The company started to research why Oreo sandwich cookie was not hitting their sales
target. From the data they found, they realized that Chinese consumers were not used to
eating cookies. While the consumers liked the combination of sweet and bitter, the level
of sweetness and bitterness of the cookie was not to their liking. The company was
willing to adapt to local consumers’ preferences and they modified the recipe, reducing
the sweetness of the cream filling and adding more chocolate to the cookies.
In addition to Launching new product lines like Oreo double fruit , mini-Oreo , Oreo ice
cream flavor , Oreo wafer , Oreo coated wafer and Oreo flute wafer
3- Market development :
Oreo launched Gluten free Oreo for new segment of people who has gluten intolerance
4) Product Diversification ( Related Diversification):
Oreo launched cake powder mix , Whipped cream powder and Packs of hot chocolate
powder.
Conclusion

Globalization has significantly impacted strategic management in businesses worldwide.

The interconnected nature of the global economy has forced companies to adapt their
strategies to remain competitive and thrive in a rapidly changing environment.

Today, Oreo has become a global brand. It has presence in more than 100 countries.
China is currently its No.2 market. This would have been highly impossible had there
been no clear strategy from Kraft about approaching the Chinese markets.
Manufacturing, marketing, distribution and packaging were properly aligned as per the
market requirements. The decision to reformulate the Oreos according to the Chinese
taste was a significant decision.

This case is a classic example of the dilemma which is faced by multinational

corporations when entering foreign markets. The firms should be able to adjust to the
local tastes. Oreo achieved success by integrating its global brand with local preferences.