What strategy are american companies employing in china

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The New York Times

BEIJING -- Summer Palace, a restaurant tucked inside one of the capital's most expensive hotels, offers the standard selection of Chinese delicacies: abalone, braised sea cucumber and imperial bird's nest soup, which sells for about 700 renminbi, or more than $100, a serving. Noticeably absent, however, is a mainstay of Chinese cuisine -- shark fin soup.

''We took it off our menu a while ago,'' the hostess said without apology. ''Environmental protection.''

Summer Palace is one of a handful of restaurants in Beijing that have heeded a decade-long conservation effort to persuade diners and business owners to eschew shark's fin, a traditional delicacy valued more as a status symbol than for its taste.

But according to a report issued in December by an environmental group based in Beijing, the campaign, backed by some of the country's top celebrities, has so far failed to persuade most restaurants and hotels to drop the fibrous dish from their menus.

''Shark fin soup is still an obligatory dish at business banquets and weddings,'' said Wang Xue, chief coordinator of the survey sponsored by Green Beagle.

The survey found that only 17 of 249 luxury hotels in Beijing, Shenzhen and Fuzhou had stopped offering the popular dish. Of those that have dropped shark fin from their menus, most are owned by multinational companies like Sheraton, Marriott International and Shangri-La International Hotel Management of Hong Kong.

For the growing number of shark protectionists in China, the survey results, though disappointing, were not surprising. Shark fin soup has become a lucrative source of revenue for high-end restaurants. An individual serving can cost as much as 2,000 renminbi, or about $320. At some locations of South Beauty, the only upscale Chinese restaurant chain to have stopped selling the dish, shark fin soup accounted for 20 to 30 percent of revenues, according to Wang Yihua, a general manager for the chain, which specializes in Sichuanese cuisine.

Environmentalists have their work cut out for them. With millions of Chinese becoming newly affluent each year, the dish, once unaffordable to all but the most privileged, is suddenly within reach. The desire to revel in that newfound wealth -- and broadcast it to friends and business associates -- is contributing to a rapid depletion of the world's shark population.

As many as 73 million sharks are killed every year, many for their fins, and nearly a third of shark species are threatened with extinction, according to a 2011 report by the Pew Charitable Trust's global shark conservation campaign. Because sharks sit atop the ocean food chain, their plummeting numbers have an outsize impact on the entire marine ecosystem.

Also alarming to some is the sheer brutality of shark-finning itself: After the fins are sliced off, the sharks are often thrown back into the ocean to die.

Increasing concerns about the impact of shark finning have prompted governments to take action. Though the practice of shark finning had already been banned in the United States, in 2011, several states, including Hawaii, California and Washington, enacted broader laws to prohibit the possession, sale or distribution of shark fins. In 2012, Taiwan introduced new fishing laws banning shark finning, making it the first government to ban the practice in Asia.

But in mainland China, powerful trade groups like the China Hotel Association have so far been unmoved. Environmentalists have been pressing the association to withhold its ''green hotel'' stamp of approval from members that serve shark fin. Zhang Jingfu, assistant to the chairman of the China Hotel Association, said the group encouraged businesses to reduce sales of shark fin but was not prepared to do more. ''The sales and consumption of shark fins are market-driven behavior, and the hotel association cannot force the industry or consumers to stop,'' he said in an e-mail.

Still, there are signs that the conservation campaign, whose most prominent advocate is the retired National Basketball Association star Yao Ming, is gaining momentum. In September, conservationists scored a major victory when Cathay Pacific Airlines announced that it would no longer carry shark fin and most other shark products in its cargo shipments. Environmental groups estimate that Cathay Pacific transported up to half of the total 650 tons of shark fin imported by air into Hong Kong last year. Though Cathay Pacific's shipments accounted for only a small fraction of the overall 10,200 tons of shark fin estimated to have been imported into Hong Kong in 2011, the decision by a major airline to abandon the shark fin trade was still touted by environmentalists as a bold signal to the rest of the industry in Hong Kong, which is still the world's leading trade hub for shark fins.

Last July, the Chinese government announced a ban on shark fin soup at official banquets. Though Xinhua, the state news agency, said the ban would take up to three years to implement, conservation groups have been heartened. In December, officials in Shanghai even allowed environmental activists to gather outside an anti-shark finning art exhibit as part of a petition drive against shark fin consumption.

Just as important, environmentalists say eating shark fin is starting to acquire a stigma among the Chinese elite.

''Many of the most successful men and women in China's business community are beginning to realize that shark fins are not nutritious after all,'' said Cai Tao, brand director of China Entrepreneur Club, an exclusive group that includes Jet Li, the kung fu star turned philanthropist, and Jack Ma, founder of the Internet business giant Alibaba Group. Members of the club pledged in 2009 to forgo shark fin soup and to prohibit it from being served at their own sponsored events. Also in 2009, Taobao.com, the popular e-commerce subsidiary of Mr. Ma's Alibaba Group, announced a ban on the sale of shark fins through its site.

But the question is whether such sentiments will trickle down to those who keep the shark fin industry afloat: restaurants and the vast majority of consumers.

To Stanley Shea, a project coordinator at Bloom Association, a marine conservation group in Hong Kong, consumers need to understand the impact of their eating habits on the entire marine ecosystem. ''People may think that shark fin soup still stands for a culinary tradition,'' he said. ''I would like to ask these people: Would you like to eat your tradition to extinction? Or would you like it to go on?''

Huang Shaojie contributed research.

Source Citation:

Qin, Amy. "Taste for Shark Fin Fades Slightly in China." New York Times 29 Jan. 2013: NA(L). Business Insights: Essentials. Web. 1 Sept. 2021.

Discussion:

What strategy are American companies employing in China?

How does Frito Lay's approach impact their business?

What will determine the American snack company success in China?

Will a localization strategy provide a sustainable competitive advantage for American companies?

Of the products and flavors discussed in the video and news article, which might be the most vulnerable to change in consumer tastes or issues that could impact their sales?

Reference no: EM133287930

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