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IB Wang Fortune Tea Case Analysis

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IB Wang Fortune Tea Case Analysis
Case Analysis of Wang’s
Fortune Tea
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Page 1

Current Situation of Wang’s
Fortune Tea
 Produce one type of Herbal Tea
 90% market share of the herbal tea industry in China
 Sale revenue of US$512.16 million in 2006

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Page 2

Current Situation of Wang’s
Fortune Tea
– Wang’s Herbal Tea is highly visible in the market place. The brand name is a Chinese legend, it is being marketed towards the vast population through television ad’s, it has expanded into restaurants throughout China that sell food which increases internal heat, and it has a strong CSR rapport amongst the Chinese.
– Wang’s Fortune Tea is situated very well in the
Chinese soft drink market.
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Page 3

Business Strategy
• Based on the concept of “internal heat” and that
Wang’s Herbal Tea can reduce internal heat, an age-old concept in Chinese culture
• New Brand positioning following the SARS outbreak in 2003 “Afraid of internal fire, Drink
Wang’s Herbal Tea”
 Clearly established the special function of herbal tea to customers throughout China
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Page 4

Business Strategy contd..
– Established the product as a soft drink instead of a medicine. – It could not only reduce internal fire, but also prevent it.
– Easy and Lucky name to remember
– Packaging was red and yellow, which represented luck and fortune to the Chinese

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Page 5

Domestic Competitors
• Herbal Tea market in China is set to grow 20-30% in the next few years
• Regional Competition is fierce, especially in the south of China. Regional players do not pose direct effect to Wang’s Fortune Tea because Wang is highly dominant player in the market.

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Page 6

Domestic Competitors contd..
• Three main national brands are in competition with
Wang’s Fortune Tea
– Chunhetang
• First to market the concept of “internal heat”
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