Wahaha Joint Venture Company

2.1 Brief History: Wahaha Group Zong Qinghou, born in 1945 in Hongzhou,China (Zhang & Van Deusen, 2010) identified a business opportunity while selling milk in the local school where his mother taught. His idea was to sell nutritional milk drinks aimed at children which were not common during that period. As private ownership was illegal during that time, he partnered with the local government (Liu, 2007) and created the state owned Wahaha Nutritional Foods Factory, later Wahaha Group with Zong as

food company, was in a fierce battle with China-based Wahaha Group (the largest beverage producer in China) to win control of their joint ventures (JVs) in China. The fight is reported to have started in 2005 when Danone uncovered some unusual financial figures at the JVs, but this did not become known to the public until 2007, when Danone and Wahaha Group failed to resolve their disputes on the selling price of Wahaha-related non-joint ventures (non-JVs). The quarrel between Danone and Wahaha Group

several drawback of joint venture which is potential risk. Danone, as a global multinational cooperation, may concerned about the risk of technology transfer and intellectual property management to the local Chinese ambitious company. The merging different management style due to the culture diversity and the priority to the outcome. Indeed, the conflict with each partner of their interest ratio. The interest ratio has changed during their period of joint venture. At first, the Wahaha Group owned 40%

food company, was in a fierce battle with China-based Wahaha Group (the largest beverage producer in China) to win control of their joint ventures (JVs) in China. The fight is reported to have started in 2005 when Danone uncovered some unusual financial figures at the JVs, but this did not become known to the public until 2007, when Danone and Wahaha Group failed to resolve their disputes on the selling price of Wahaha-related non-joint ventures (non-JVs). The quarrel between Danone and Wahaha Group

remained quiet and turned a blind eye when it knew of Wahaha Group’s use of the trademark and breach of the non-compete agreement. This could be in part due to the fact that Danone was acquiring other companies such as Wahaha’s direct competitor, Robust. I consider this a “give and take” strategy used by Danone. Danone did not want to rock the boat with Wahaha as it was pursuing its own interests separately too. Therefore, rather than confront Wahaha Group about the

Wahaha is the largest soft drink producer in China, competing with the big players including Pepsi and Coca Cola. It was founded in 1987 when the company began selling soda water, ice cream, and stationary to children. The founder, Zong Qinghou, found that there are 38 companies in the nation producing nutritional drinks but none of them were targeted to children. The idea became an instant success and increased the revenue to RMB400 million by 1990. However, management soon realized this growth

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

same time the manager has to face possible divergent requirements from the patent companies. Some issues could happen during the short to long run and may have huge impact on the JVC. Therefore solutions and suggestions will be given in order to minimise the impact they have on the long-term survival of the JVC. 2 Employee performance challenges 2.1 Culture differences The creation of a joint venture company (JVC) is to combine forces from two or

between multinationals and local Chinese companies in 10 industries over the past five years. They conclude that local companies are now threatening multinationals’ plans to conquer the China market. They analyse this new competitive game in terms of a dynamic battle of competencies. Multinationals start off with better industry-specific technology and know-how, and a higher level of competence in key functions like marketing and financial management. Chinese companies enjoy a better understanding of the

entRECHACHE Khaled Oualid EBS Paris Student Shanghai University Marketing Report Example of Wal-Mart Summary I.The Chinese Retail Market A. Analysis of the Chinese Retail Market B. A picture of China’s Retail Market : facts & figures II. Wal-Mart in China III. Wal-Mart suggested business model in China A. General Analysis B. Suggestions I. The Chinese Retail Market China is first of all a demographic power: 1 human being out of 5 is living there. It is a permanent