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Foreign Joint Venture

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Read the case, "Look before you leap". Prepare your composition to cover the following topics or questions with in the Body section of the paper described for this assignment:
a. Grameen Danone is a joint venture (JV) among two companies—the nonprofit Grameen Group and the for-profit Groupe Danone SA. What are the benefits of this JV to each of these companies? Why did each choose to participate in the JV?
b. What other forms of advance preparation might the managers need to undertake before negotiating with someone from another country?
c. From the perspective of each of the partners, are there any potential pitfalls to joining this JV?
d. Now consider Danone's JV in China. What were the benefits of this JV to each of these companies? Why did each choose to participate in the JV?
e. What could Danone have done to avoid the problems it encountered in China and India?

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Solution Summary

The response provides you with an explanation of Danone JV entry into foreign countries. The response discusses important issues related to foreign JVs. It also gives you the relevant references.

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Introduction
a) Thesis statement
You should say that even though Joint Ventures are an important method of expanding operations abroad, careful evaluation of the partner and his motives should be done. Otherwise the JV will fail.

b) Purpose of paper
You may say the purpose of the paper is to illustrate that factors that led to Danone's successful JV in Bangladesh as well as illustrate the the factors that are responsible for failure in JVs in China and India.

c) Overview of paper
You can say that the paper first shows how Danone was able to successfully form and operate a JV in Bangladesh. It shows the factors that can lead to a successful JV. Next, the JV of Danone in China is discussed and the factors that led to its conflicts and demise were discussed. Finally, the JV of Danone with Wadia & Britannia in India was discussed and the factors that led to its failure were listed.

Main issue 1:
a. You should say that the benefit of the JV to Danone was that it got access to 164 million people Bangladesh's market. Danone got access to this large market. At the same time Grameen wanted the benefit of improving nutrition in that country through provision of healthier foods and it wanted to reduce poverty in Bangladesh by creating new markets for Bangladeshi farmers. Danone chose to enter into the JV because it would provide penetration into a promising emerging market. Grameen was able to get the benefit of the financial clout, manufacturing expertise, and sophisticated marketing skills to these Joint Ventures. At the same time Danone entered into the JV because it was able to get Grameen's contribution to ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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