versus
description
Transcript of versus
![Page 1: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/1.jpg)
versus
by Sacha Milchten & Antoine Ryckebusch
Lessons for Joint Ventures in China :A Happy Marriage but Painful Divorce
![Page 2: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/2.jpg)
Company Presentation Founded in 1987 Hangzhou Wahaha Group
Co. Limited owned by the government of Hangzhou's Shangcheng District.
Zong Qinghou : Chairman and managing director
In 1995, Peregrine Investments Holdings introduced Zong to Danone, and discussions about joint ventures began.
Founded in 1973 from the merger of Boussois-Souchon-Neuvesel and Gervais Danone
1979 – 1985 : acquisition of Amora, Maille, La Pie Qui Chante, Carambar…
CEO : Franck Riboud
![Page 3: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/3.jpg)
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 outlets across China
![Page 4: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/4.jpg)
Suppliers
Important role of the water bottle
Kind of water Exclusive deals with suppliers Supplier relations
![Page 5: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/5.jpg)
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
![Page 6: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/6.jpg)
What are the Key Success Factors of this business?
Being good and tasty Being a trustmark Product quality Find the good chinese partner Innovation Culture differences and Relations
![Page 7: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/7.jpg)
To what extent are these KSF mastered by the company
✔ Being good and tasty
✔ Being a trustmark
✔ Find the good chinese partner
✔ Innovation✔ Product quality ✗ Culture differences and Relations
![Page 8: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/8.jpg)
The Case : Danone versus Wahaha: Lessons for Joint Ventures in ChinaA Happy Marriage but Painful Divorce
![Page 9: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/9.jpg)
Video
![Page 10: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/10.jpg)
Background : Formation of the joint venture
Established first JV in 1996Danone 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 !
![Page 11: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/11.jpg)
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
![Page 12: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/12.jpg)
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
![Page 13: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/13.jpg)
Lessons to be learned
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
![Page 14: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/14.jpg)
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.
![Page 15: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/15.jpg)
The Chinese beverage company's expansion is no laughing matter
« Thank you Danone ! »
From milk to Future Cola
A"patriotic" brand soon international ?
![Page 16: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/16.jpg)
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 chinois http://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
![Page 17: versus](https://reader035.fdocuments.us/reader035/viewer/2022062815/568168ec550346895ddfeb63/html5/thumbnails/17.jpg)
Q&A…
Thank you !