Case Study of Danone
Entry mode dynamics 2: strategic alliance partners
Case 12.1 Danone’s affair in China
As of 2007, Danone, the French multinational food company, was in a fierce battle with China-based Wahaha Group (the largest beverage producer in China) to win control of their joint ventures (JVs) in China. The fight is reported to have started in 2005 when Danone uncovered some unusual financial figures at the JVs, but this did not become known to the public until 2007, when Danone and Wahaha Group failed to resolve their disputes on the selling price of Wahaha-related non-joint ventures (non-JVs). The quarrel between Danone and Wahaha Group has escalated. It involves disputes on brands, as well as on perceived unequal commitments to the JVs. Lawsuits have been launched, both in China and internationally. How did cooperation turn into a large-scale battle?
CASE
Danone and its international expansion
Originally named Boussois-Souchon-Neuvesel (BSN), Danone was founded in 1966 when two glass companies, the Souchon-Neuvesel glassworks and Glaces de Boussois, merged to compete in the expanding Common Market. The setback in the glass industry prompted BSN to switch its focus to its downstream business, namely the beverages industry. In 1969 and 1970, BSN acquired Evian, Kronenbourg and the European Breweries Company, becoming the leading manufacturer of beer, mineral waters and baby food in France in 1970. In 1973, BSN merged with Gervais DANONE, creating the largest French food group. In the mid and late 1970s, BSN Gervais DANONE gradually retreated from the lagging glass sector, focusing solely on food after the group divested Boussois in 1981. After establishing its leadership position in France in the 1970s, BSN Gervais DANONE started to expand in the European market in the 1980s, through a series of acquisitions, joint ventures and partnerships, including the cross-shareholding arrangement with the Agnelli empire in Italy in 1987, the alliance with the Fossati family in
Case 12.1 Danone’s affair in China
As of 2007, Danone, the French multinational food company, was in a fierce battle with China-based Wahaha Group (the largest beverage producer in China) to win control of their joint ventures (JVs) in China. The fight is reported to have started in 2005 when Danone uncovered some unusual financial figures at the JVs, but this did not become known to the public until 2007, when Danone and Wahaha Group failed to resolve their disputes on the selling price of Wahaha-related non-joint ventures (non-JVs). The quarrel between Danone and Wahaha Group has escalated. It involves disputes on brands, as well as on perceived unequal commitments to the JVs. Lawsuits have been launched, both in China and internationally. How did cooperation turn into a large-scale battle?
CASE
Danone and its international expansion
Originally named Boussois-Souchon-Neuvesel (BSN), Danone was founded in 1966 when two glass companies, the Souchon-Neuvesel glassworks and Glaces de Boussois, merged to compete in the expanding Common Market. The setback in the glass industry prompted BSN to switch its focus to its downstream business, namely the beverages industry. In 1969 and 1970, BSN acquired Evian, Kronenbourg and the European Breweries Company, becoming the leading manufacturer of beer, mineral waters and baby food in France in 1970. In 1973, BSN merged with Gervais DANONE, creating the largest French food group. In the mid and late 1970s, BSN Gervais DANONE gradually retreated from the lagging glass sector, focusing solely on food after the group divested Boussois in 1981. After establishing its leadership position in France in the 1970s, BSN Gervais DANONE started to expand in the European market in the 1980s, through a series of acquisitions, joint ventures and partnerships, including the cross-shareholding arrangement with the Agnelli empire in Italy in 1987, the alliance with the Fossati family in