Knowledge

Zong Qinghou was born in 1945 in Hongzhou during a turbulent period in China (Yang, 2004). Zong did not receive much formal education, thus he had various menial low paying jobs from 1963 to 1982, including jobs at the Zhoushang Salt Farm, the Luxing Farm, and a small paper carton factory. Like millions of other Chinese workers without many opportunities to earn a decent living, Zong dreamed of starting his own business. The opportunity came in 1986 after Zong returned to Hongzhou to take care of his mother who was sick. Zong got a job selling milk in a mini-grocery in a local school in the Shangchen District where his mother worked as a teacher. From this job, he identified opportunities. It was an era when the one child policy had just started. The only child became the apple of the entire family. Their parents and grandparents would generously spend more to make these small “kings” and “queens” healthy instead of spending on themselves. However, what they could buy in the market was rather limited. Zong saw the opportunity to produce milk drinks which were not common in China but were deemed as healthy, particularly for kids. Using the campus as his first testing ground, he started a business with two retired teachers and borrowed 140 000 Yuan (about $17,000 at that time; Yang, 2004)
In China, an IJV is defined as an establishment between one or more foreign, individuals, companies, enterprises or other economic organizations, and one or more Chinese companies, enterprises or other economic organizations, in accordance with the Law of the People‟s Republic of China on Chinese-Foreign Equity Joint Ventures (Li, Zhang and Jing, 2008). The parent firms jointly exploit their combined resources to identify and create capabilities and core competences to capture market opportunities primarily inside the Chinese market. Chinese firms provide knowledge about government laws and customs, along with networking relationships, while foreign firms provide financial resources and technological and management expertise.