Study guide Essay

September 12, 2017 Construction

When and how did Danone expand into the Chinese market? What jobs did Danone Group brush while operating in China? From the instance. Danone expand into Chinese market in the late eightiess. However. Danone faced challenges in China due to miss of market cognition. In 2000. Danone purchased Robust. the then-second largest company in the Chinese drink industry.

Gross saless of Robust had reached RMB2 million in 1999. After the purchase. Danone dismissed the original direction and managed Robust straight. Because its new direction was non familiar with the Chinese drink market. Robust struggled. Its tea and milk merchandises about disappeared from the market. So. during 2005 to 2006. the company lost RMB150 million. 2. How was the Danone and Wahaha JV formed? What was its construction? Why did Danone make up one’s mind to organize a joint venture instead than set up a 100 per centum owned subordinate? In 1996. Danone Group. Bai Fu Qin and Wahaha Group combined forces in a joint venture.

Danone bought the involvements of Bai Fu Qin and gained legal control of the joint venture with 51 % of portions. While. members of the JV are entitled to utilize Wahaha’s hallmark. Because of Danone deficiency of cognition about Chinese market. through the joint venture. the company can do better market determinations and created the largest drink company in China. 3. What was the job of Danone Wahaha joint venture that triggered the struggle between the companies? What were the differences in Danone’s and Wahaha’s apprehension of their ain several functions and duties in this venture? What aspects of national and organisational civilization affected this position?

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The job is wahaha used it trademark to open subordinates companies in other states. nevertheless. Danone believes the Wahaha hallmark belongs to the joint venture company and Wahaha is illegal to utilize the hallmark for its ain intents. The difference between Danone and Wahaha for understanding the function in joint venture are. Danone believe he own’s 51 % of the portions so he has the control right over Wahaha’s determinations. However. Wahaha believes he can open new concerns under its ain hallmark and don’t need any other company’s blessing.

Therefore. the national civilization affect Wahaha didn’t understand what means joint venture. So it affected the organisational civilization between Danone and Wahaha. 4. Was Danone successful in turn outing its claims in tribunal? How was the struggle between the two companies resolved? What were the cardinal lessons for Danone about making concern in China? No. Danone filled more than 30 cases against Wahaha for go againsting the contract and illicitly utilizing the JV’s Wahaha hallmark in other states. However. most of those case are stand on Wahaha’s favour. So. in 2009. Danone agreed to stop the cooperate relationship between the two company. The cardinal lessons from this instance is Danone demand to understand concern civilization and market before come ining Chinese market.

To organize a joint venture with a Chinese company is a good pick to do better market and concern determinations. However. to acquire on good with the Chinese company is non easy since there is ever a spread between apprehensions. 5. Did Danone follow the advice sing JVs in China listed in the list merely above? Which aspects did it follow and which did it non? No. Danone didn’t following the advices. Danone has expected the 51 % of ownership can acquire effectual control and it didn’t formed a JV on a strong and certain legal footing. Besides. it expected to utilize proficient to asseverate or derive control in a JV alternatively of utilizing understanding and cooperate relationships. And their understanding didn’t signifier on a daily direction footing.

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