China's food processing sector has arrived at a critical stage and the challenges for the food industry including undergoing relevant structural adjustments are well documented (OECD 2000). The Chinese domestic economy continues to boom and living standards of people continue to improve. Food processors need to adjust to increasingly diversified consumer demands and improve the quality and nutritional content of foods. The food industry also needs to enhance its international market access through product quality, variety, safety and other attributes of their food products. Product and process innovation has become one of the top driving forces for improving the competitiveness of China’s food processing industry both domestically and internationally (OECD 2000). This paper examines through case study analysis the response of several food processors in China to the changes in their external business environment and makes some assessment of their adoption or otherwise of innovative strategies. While relevant studies have been pervasive in Western countries, there is a dearth of analysis of such issues in China.