Feihe Dairy: Investing in Canada

In 2016, the chief executive officer (CEO) of Feihe International Inc. (Feihe), the manufacturer of a leading infant formula brand in China, was considering whether his company should enter Canada. Although the company would be challenged by the Canadian dairy industry’s unique supply management system, Canada was eager to attract foreign investment and the CEO needed to overcome the intense domestic competition in China’s infant formula market. The CEO needed to decide on an integrated strategy to enter Canada. Should he pursue a greenfield strategy, an acquisition, or a joint venture?

This case is suitable for undergraduate- and graduate-level courses or modules on international business and strategy. In an international business course, the case can supplement a discussion of entry modes in the context of decision-making by multinational enterprises from emerging economies. In a strategy course, the case can be used to discuss the elements that contribute to successful management after investment in a cross-cultural context. After completion of the case, students will be able to<ul><li>identify the characteristics of various modes of international market entry, including greenfield investments, acquisitions, and joint ventures;</li><li>understand the production and management operation issues that must be considered after a company's investment overseas, including new costs, coordination with local businesses, and regulations in the new market;</li><li>apply Porter’s value chain framework to identify the activities a company needs to pursue to build its competitive advantages; and</li><li>evaluate companies’ specific advantages when their home county is an emerging market, such as China.</li></ul>

• Dairy, Entry Mode, China, Canada