Tale of 2 [Ppl

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C O M M E N TA RY A Tale of Two Companies The Danone-Wahaha partnership once seemed ideal, but the companies’ relationship has deteriorated. What lessons can be learned from the dispute? Jingzhou Tao and Edward Hillier T he Danone-Wahaha dispute is a story of the relationship between two very different entities against a backdrop of incredible change. The dispute reveals many questions that China faces as it integrates into the world economy, such as what to do when rule of law leads to an unpopular result or harms a valued Chinese company. The players Group Danone SA, a Paris-based multinational corporation (MNC), is a giant in the global dairy product and bottled water markets. The MNC employs roughly 90,000 staff across…show more content…
¥1.04 billion ($147.2 million). highlights the intersection of Since many JVs created in the 1990s may After negotiations failed, Danone public opinion, nationalism, and face similar problems, perhaps a more relrequested arbitration in Stockholm, the rule of law in China. evant question is, what else could or Sweden, and filed lawsuits in Los Angeles s Disputing companies should should Danone do to manage the situaand other cities, mainly over trademark pay close attention to their public tion now and regain control of the JVs? infringement and non-compete obligarelations efforts. First, Danone should have a clear pubtions (see Table). s In disputes with Chinese lic relations strategy to manage how it Zong and his supporters responded in companies, foreign companies appears in the Chinese media. Danone kind, requesting arbitration in should be careful to avoid sparking risks jeopardizing its future in China if Hangzhou, Zhejiang, to confirm that a nationalist backlash. Chinese consumers turn against it— Hangzhou Wahaha Group—not the Chinese nationalism should not be Danone-Wahaha JV—owned the underestimated. Though Danone holds a Wahaha

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