1 / 17

versus

versus. Lessons for Joint Ventures in China : A Happy Marriage but Painful Divorce. by Sacha Milchten & Antoine Ryckebusch. Company Presentation. Founded in 1973 from the merger of Boussois-Souchon-Neuvesel and Gervais Danone

mireya
Download Presentation

versus

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. versus Lessons for Joint Ventures in China :A Happy Marriage but Painful Divorce by Sacha Milchten & Antoine Ryckebusch

  2. CompanyPresentation • Founded in 1973 from the mergerof Boussois-Souchon-Neuvesel and Gervais Danone • 1979 – 1985 : acquisition ofAmora, Maille, La Pie Qui Chante, Carambar… • Founded in 1987 • Hangzhou Wahaha Group Co. Limited owned by the government of Hangzhou'sShangcheng District. • ZongQinghou : Chairman and managingdirector • In 1995, PeregrineInvestments Holdings introducedZong to Danone, and discussions about joint venturesbegan. • CEO : Franck Riboud

  3. Who are the customers? • More than 1,500 first-level dealers • 12,000 second-level dealers • 35 provincial sales offices • 2,500 sales team employees • 2 million sales outletsacross China

  4. Suppliers • Important role of the water bottle • Kindof water • Exclusive deals with suppliers • Supplier relations

  5. Who are the competitors? • Coca-Cola Co. • PepsiCo, Inc • Taiwan-founded companies Uni-President Enterprise Corp. and Tingyi (Cayman Islands) Holding Corp. • Success of Future Cola • Not worry too much about domestic competition • Imitations

  6. What are the Key SuccessFactors of this business?  • Being good and tasty • Being a trustmark • Product quality • Find the good chinesepartner • Innovation • Culture differences and Relations

  7.  To whatextent are these KSF mastered by the company ✔ Product quality ✗Culture differences and Relations ✔ Innovation ✔Find the good chinesepartner ✔ Being good and tasty ✔ Being a trustmark

  8. The Case : Danone versus Wahaha: Lessons for Joint Ventures in ChinaA Happy Marriage but Painful Divorce

  9. Video

  10. Background  : Formation of the joint venture • Established first JV in 1996 Danone owned 51%(invest $170 million) and Wahaha owned 49% of the shares. • Wahaha Group becomes a private company… But the trademark belongs to the state !

  11. Management of the JV and the creation of competing non-JV companies • Management of the JV from one of the richest men in China : Zong • The conflict : Creation of a series of companies that sold the same products as the JV and used the Wahaha trademark

  12. Arbitration and Lawsuits One of the arguments of Zong’s : • The JV agreement of 1996 was unfair. • Danone had intention to control China’s beverage market. • Foreign mergers and acquisitions should go through the anti-monopoly check. ( China should promulgate Anti-Monopoly Law as soon as possible.) • Dispute on the Wahaha Brand

  13. Lessons to belearned • Don’t use technical legal techniques to assert or gain control in a JV • Do not expect a 51% ownership interest in a JV will provide effective control • Do not proceed with a JV formed on a weak legal basis : the brand name. • The foreign party must actively supervise or participate in the day-to-day management of the JV

  14. Danone today in China • Danone breaks up with Wahaha Group . • With the end of the JV, Danone focus on other markets. • Danone has continued to pursue this strategy, and has joint ventures with companies.

  15. The Chinese beverage company's expansion is no laughing matter • « Thankyou Danone ! » • From milk to Future Cola • A"patriotic" brand soon international ?

  16. Sources • Wahaha : l'empire contre attaque ! www.aujourdhuilachine.com • Steven M. Dickinson on the lessons to be learned from the tensions within China’s largest beverage joint venture www.chinaeconomicreview.com/cer/2007_09/Danone_v_Wahaha.html • L'implantation de Danone sur le marché chinoishttp://danone-en-chine.wikeo.be/a.html • The Chinese beverage company's expansion by Paula M. Miller www.chinabusinessreview.com/public/0409/company_profile.html

  17. Q&A… Thankyou !

More Related