Wanli GUO

The objective of this study is to identify the role of product differentiation strategies targeting local food retailers in expanding the export of processed food to China. This study used a market structure ⇔ corporate strategy approach to critically examine, through the lens of the Chinese import food market structure, the efficacy of strategies employed by Japanese food manufacturing corporations. Interviews were conducted at successful Japanese food manufacturing corporations and Chinese retail outlets of import foods. The results showed two significant findings. First, Japanese food manufacturers that have direct relationships with local retail outlets in China experience a two-fold benefit from having access to direct consumer feedback: they are able to meet consumer demand by adapting their products and they can aggregate products from other small and medium domestic food manufacturers in Japan to attain economies of scale in transportation timeliness. Second, Japanese food manufacturers with established local retail outlets and Chinese staff were successful in capitalizing on newly emerging markets for imported food products in formerly rural regions in China's interior. Notably, having Chinese staff was found to be critical in corporations being able to negotiate opportunities in these emerging markets.