Harvard Case - Danone & Wahaha: A Bittersweet Partnership
"Danone & Wahaha: A Bittersweet Partnership" Harvard business case study is written by Stewart Hamilton, Jinxuan (Ann) Zhang. It deals with the challenges in the field of Negotiation. The case study is 24 page(s) long and it was first published on : Aug 14, 2008
At Fern Fort University, we recommend that Danone and Wahaha should focus on rebuilding trust, improving communication, and developing a shared vision for the future. This will require a commitment from both sides to work together in good faith and to find mutually acceptable solutions to the challenges they face.
2. Background
Danone is a French multinational food-products corporation. Wahaha is a Chinese beverage company. In 1996, Danone and Wahaha formed a joint venture to produce and distribute Danone's products in China. The joint venture was initially successful, but tensions began to arise between the two companies over time. Danone felt that Wahaha was not investing enough in the joint venture, while Wahaha felt that Danone was not giving it enough control over the business. In 2009, the joint venture was dissolved, and Danone and Wahaha have been locked in a legal battle ever since.3. Analysis of the Case Study
The case study of Danone and Wahaha highlights the challenges of managing a joint venture between two companies from different cultures. The two companies had different expectations and goals for the joint venture, and they were unable to resolve their differences. This led to a breakdown in trust and communication, and ultimately to the dissolution of the joint venture.There are a number of lessons that can be learned from the case study of Danone and Wahaha. First, it is important to have a clear understanding of the goals and expectations of each party involved in a joint venture. Second, it is important to establish clear lines of communication and to ensure that both parties are kept informed of all developments. Third, it is important to build trust between the two parties involved in a joint venture. This can be done by being honest and transparent, and by fulfilling your commitments.
4. Recommendaations
In order to rebuild trust and improve communication, Danone and Wahaha should consider the following recommendations:- Establish a regular schedule for meetings between the two companies.
- Create a joint task force to address the challenges facing the joint venture.
- Develop a shared vision for the future of the joint venture.
- Invest in training and development for employees of both companies.
- Improve communication between the two companies.
- Develop a conflict resolution mechanism.
- Establish a clear division of responsibilities between the two companies.
5. Basis of Recommendaations
The basis for these recommendations is the need to rebuild trust and improve communication between Danone and Wahaha. By taking these steps, the two companies can create a more positive and productive working relationship.6. Conclusion
The case study of Danone and Wahaha is a reminder of the challenges of managing a joint venture between two companies from different cultures. However, by following the recommendations outlined above, Danone and Wahaha can rebuild trust, improve communication, and develop a shared vision for the future.7. Discussion
There are a number of other alternatives that Danone and Wahaha could consider in addition to the recommendations outlined above. These include:- Selling the joint venture to a third party.
- Dissolving the joint venture and starting over with a new partner.
- Continuing to operate the joint venture as is, but with a reduced level of investment from both companies.
The best course of action for Danone and Wahaha will depend on the specific circumstances of the case. However, the recommendations outlined above provide a good starting point for rebuilding trust and improving communication between the two companies.
8. Next Steps
If Danone and Wahaha decide to follow the recommendations outlined above, they should take the following steps:- Schedule a meeting between the two companies to discuss the recommendations.
- Create a joint task force to address the challenges facing the joint venture.
- Develop a shared vision for the future of the joint venture.
- Invest in training and development for employees of both companies.
- Improve communication between the two companies.
- Develop a conflict resolution mechanism.
- Establish a clear division of responsibilities between the two companies.
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Case Description
For most of 2007, a public dispute was going on between Danone and Wahaha over their joint venture in China. The "antagonism" had even led to the Chinese and French presidents calling on both companies to resume "peace talks" and find an amicable solution. The Danone & Wahaha case looks into how this ten year plus and once "sweet" partnership turned sour. It serves as a basis to further explore what could have been considered as a "win-win" partnership; how it was formed, further developed and how to anticipate and mitigate certain risks when doing business in China or other emerging markets, for example, how to define growth and the share of risks and rewards. It then examines what will happen next and the future outlook or likely scenario for Danone's businesses in China. Learning objectives: The key learnings in this case will apply to how to make all partnerships work, whether with Chinese partners or not, those based on principles of equality and mutual benefits, tolerating minor differences and reach mutual understandings.
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