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MBA Students Discover $4.5 Billion Gap in Chinese Protein MarketPRIME Program Reaches Well Beyond the ClassroomNovember 10, 2008 • by News at Marshall
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For five USC MBA students, a research project created for the Pacific Rim International Management Education program PRIME reached well beyond the classroom, with applications for corporations seeking to enter China's growing food market.
As part of PRIME, a required Marshall full-time MBA capstone course, students work on a presentation for a company they will visit during a visit to a given Pacific Rim country. For Leslie White, Humberto Belloso, Genaro Bugarin, Wesley Thompson and Aaron Lin, who were traveling to Beijing and Shanghai last spring, the project came from the world’s largest meat processor and marketer, Tyson Foods.
James M. Rice, vice president and country manager, Greater China for Tyson Foods, requested that the students to find out the size of China's protein market.
"The challenge for Tyson and its competition going into China was finding out what the size of the protein market is, particularly meat consumption," explained Professor Carl Voigt, who teaches the PRIME course. "Consumers transition in their food choices as they grow in wealth, as China's economy develops the country's consumers are switching from pork to chicken to beef."
While doing the research, the students realized that there weren't any primary sources to help them answer the question. Even the United States Department of Agriculture didn't have information - their latest dated back to the 1980s. So they started from scratch, meeting with a developmental economist and utilizing historical data from the USDA and many culturally and dietarily similar developing nations as predictors of consumption of different proteins including pork, chicken and beef. In the end, they found the present value of the market is $123 billion and projected a $4.5 billion shortfall in capacity of Chinese farmers to produce protein and what the Chinese consumer will want to consume.
"Sometimes the companies will say 'very nice, but we're going in another direction' or 'thanks, but we disagree,' that didn't happen with this project," said Leslie White, (MBA 09), one of the students who worked on the study.
In fact, after presenting their findings to Rice and other executives in Shanghai, the students were asked to give their presentation at Tyson Foods headquarters in Arkansas and at the USDA in Washington DC at the beginning of the school year.
"It was great because as we talked about it during the presentation, there were people in the room who were seeing it on the ground and as we spoke the execs were asked 'are you seeing this?' and they could respond that they were," said White.
"It's interesting thinking about the possibilities," she added. "One of the biggest things that this project taught was how change in one country can affect an industry. It was also interesting to see how to apply economic models and all the things we’d learned in the classroom, how trade happens, and how all the aspects of business interface."
About the USC Marshall School of Business
Consistently ranked among the nation's premier schools, USC Marshall is internationally recognized for its emphasis on entrepreneurship and innovation, social responsibility and path-breaking research. Located in the heart of Los Angeles, one of the world's leading business centers and the U.S. gateway to the Pacific Rim, Marshall offers its 5,700-plus undergraduate and graduate students a unique world view and impressive global experiential opportunities. With an alumni community spanning 90 countries, USC Marshall students join a worldwide community of thought leaders who are redefining the way business works.