Danone Case Study
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 parties change?
The partnership actually strats in 1996, when Danone try to expand their business in China. By doing partnership with Wahaha group, Danone capture bigger profit because of Wahaha able to gain bigger market share. In 1997 the partnership working very well, Wahaha became the best selling domestic, and non alcoholic beverage producers. Until huge crisis crashes down Asia and damage the partnership between Danone and Wahaha.
However, the partnership able to survive from Asia great depresion. In 2003, Wahaha able to improve its performance and caputure 15,6 per cent from China’s total beverage. By looking Wahaha performance Danone would like to make deal with Wahaha by creating 39 JV’s. However strategies not working very well because some of JV’s still under Wahaha brand, there are trus issue between Danone and Wahaha, and theres some incomplete clauss on the contract.
3. Did the long-term cooperation between both firms lead to more trust? Did you observe any problems of bounded reliability with the two firms’ cooperation? Was there a vicious cycle of suspicion? Was there a vicious cycle of increasing dependency on a partner?
No, it did not, because from the very begining both side did not clear enough
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 parties change?
The partnership actually strats in 1996, when Danone try to expand their business in China. By doing partnership with Wahaha group, Danone capture bigger profit because of Wahaha able to gain bigger market share. In 1997 the partnership working very well, Wahaha became the best selling domestic, and non alcoholic beverage producers. Until huge crisis crashes down Asia and damage the partnership between Danone and Wahaha.
However, the partnership able to survive from Asia great depresion. In 2003, Wahaha able to improve its performance and caputure 15,6 per cent from China’s total beverage. By looking Wahaha performance Danone would like to make deal with Wahaha by creating 39 JV’s. However strategies not working very well because some of JV’s still under Wahaha brand, there are trus issue between Danone and Wahaha, and theres some incomplete clauss on the contract.
3. Did the long-term cooperation between both firms lead to more trust? Did you observe any problems of bounded reliability with the two firms’ cooperation? Was there a vicious cycle of suspicion? Was there a vicious cycle of increasing dependency on a partner?
No, it did not, because from the very begining both side did not clear enough