COMMENTARY Jingzhou Tao and Edward Hillier A Tale of Two Companies The 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
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and China’s Wahaha Group joint venture agreement in the 2007-2009 period‚ centres on the different attitude towards Wahaha’s non joint-venture subsidiaries. This dispute highlights the lack of cooperative strategic management and effective communication‚ the lack of sound institutionally provided legal structure to support joint venture contracts and perhaps ultimately the lack of cultural fusion. Based on research into organisational behaviour one can already see that the Danone Group’s preference
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III. Wahaha Versus Danone : a) The Joint-Venture : 1- Analysis of the conflict between Danone and Wahaha: In an interview with internet portal Sina quoted as saying‚ Zong Qinhou‚ boss of Wahaha Group‚ the first Chinese beverage producer Danone owns 51% of which‚ called the Chinese government "to enact rules to protect domestic companies from malicious acquisitions "‚ denouncing the takeover attempt of subsidiaries of his company by the French. Verbal attacks against Zong Danone represent
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Report: Key conflicts between Wahaha & Danon The main causes of conflict seem to derive from different attitudes towards key issues in the formation and operation of the joint venture‚ suggesting major differences in business culture and expectations as to how business should and is being conducted. The first and main problem described in the case study revolves around the ownership structure and the control over the JV. It seems that the Chinese Wahaha expectations were that their 49% of the
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Joint Venture between Danone and Wahaha French’s Danone and China’s Wahaha had been a very successful joint venture in China. Danone’s capital‚ expertise & technology know-how‚ combined with Wahaha’s huge local presence in the market had seen the company soared in the food & beverage industry. It was until then when Danone accused its partner‚ Zong‚ founder of Wahaha of illegally selling Wahaha brand products using a distributor not selected by the joint venture agreement. Danone also filed for arbitration
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———————————— PRESS RELEASE ——————————— Paris‚ September 30th‚ 2009 Danone and Wahaha Group reach an amicable settlement Danone and Wahaha Group are pleased to announce that they have reached an amicable settlement today‚ subject to the approval of the Chinese Authorities. The settlement has been the outcome of renewed efforts of both parties to put a final end to their dispute through productive negotiations that have taken place in a spirit of mutual respect and with the support of both the
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Introduction of Wahaha21907525800050032397704572000The Hangzhou Wahaha Group Co‚ Ltd is a private group of companies‚ and the largest beverage producer in China. The company is headquartered in Hangzhou‚ Zhejiang province. Wahaha is represent laughing child in Chinese. Wahaha has roughly 150 subsidiary companies and 60 manufacturing bases scattered throughout China. Wahaha employed about 60‚000 staffs in china. Wahaha ’s current products including beverages ‚ beer ‚ drinking water ‚ dairy products
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thought that the Wahaha Group had not received any technological or managerial expertise from Danone‚ whereas Danone did get a its place in the Chinese market‚ which they hoped for. From Danone’s view‚ however‚ there was managerial expertise offered to the Wahaha Group personnel in R&D and marketing for the Joint ventures‚ but Zong kicked them out. Because of this‚ there might have been a learning asymmetry when taking Danone’s perspective into account. Question 5 Has Danone been able to access
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Danone Case What were the intentions of Wahaha Group and Danone when setting up joint ventures in China? The Wahaha Group did very well in the Chinese market around the mid 1990s‚ but because foreign multinationals were rapidly entering China‚ it was afraid that it might lose its competiveness. The company was eager to expand its scale and market share in China‚ but it lacked the necessary financial capital to do so. This is why they wanted to cooperate with Danone. Wahaha needed cash‚ and also
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Danone Business Conduct Policy Version Distribution Version 4.1 This document has been included in full in the Appendices of the May 2009 « Danone Inside PACK » so that it could be widely distributed throughout Danone. The highlights of these principles are laid out in the « Danone Inside PACK » itself (pages 49-60). In charge : DGD – Risk‚ Control & Audit Department Co-authors : DGD – Group Legal Department DGRH – Sustainable Development and Social Responsibility Department DGRH – Social Policy
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