DANONE CASE

1. What were the intentions of Wahaha Group and Danone when setting up joint ventures in China?

Based on Danone first experience in China, Danone looking for experince partner in China who knows about the culture inside China. In response Danone set up a joint venture with reputable companies that give Danone huge advantage in Chinese market. Beside that Wahaha group as a Danone partner wanted acquire technology and managerial skills (transfer knowledge) from Danone. In this partnership Danone play the role as capital investor and not to much involving on Wahaha activity in China.

2. How did the relationship between Wahaha Group and Danone change during the 11 years of cooperation? How did the bargaining power of
both …show more content…

In the matter of accepting the joint venture entry mode, we think it’s perfectly logical that Danone accepted the offer giving its failure in the past. In our opinion, Danone must have thought that accepting the joint venture might lead them into a big expansion in Asia, and by gaining more knowledge in China’s market, Danone could create products that are suitable for Asian consumers. Seeing how its market share increased by 30%, It is clear that Danone got more advantages from the joint venture than disadvantages.

6. Can you provide an update on the relationship between Danone and the Wahaha group, using materials available from the web?

According to the article from Reuters, both companies had reached amicable settlement and both had exited the joint venture.

As quoted on this article:

Danone has agreed to sell its 51 percent stake in the ventures to Wahaha, putting an end to all legal proceedings related to the disputes between the two parties, the companies said in separate statements. No financial details were given.

Source:

http://www.reuters.com/article/2009/09/30/us-danone-wahaha-idUSTRE58T12120090930

http://www.chinadaily.com.cn/china/2009-10/05/content_8763937.htm