MGT 618
"Look before you Leap"
Barry Bland
California Intercontinental University
MGT 618: Mastering Leadership
Introduction
In the world of business, one of the savviest organizations is a company simply known as
Groupe Danone SA. The company is out of Paris, France, it specializes in yogurt, soft beverages,
and baby foods. When one talks about fresh dairy products, the word that comes to mind is
Danone. The firm is the number one in terms of fresh dairy product sales, Danone is the second
largest seller of bottled water, and toddler nourishment food. “Like many other MNCs, Danone
believes emerging markets, which currently produce one-third of its sales, offer it significant
opportunities for growth” (Griffin and Pustay, 2015). Groupe Danone SA currently employs
approximately 100,000 plus employees, in 2012, the company shattered its own sales record,
which was placed at 20.9 billion pounds. It is estimated that approximately 90 percent of Danone
sales are overseas. The intent of this paper is to discuss Danone’s Internationalizing strategy
using the case study - Look before you Leap. In addition, this paper will explain the benefits of
joint ventures, advance preparations before committing to joint ventures, joint partnerships
perspectives, Danone’s joint venture benefits, and Danone’s strategic choice(s).
In recent years, Groupe Danone SA has embraced a new business approach of partnering
with French domestic companies to enter favorable incipient markets. “Danone contributes its
financial clout, manufacturing expertise, and sophisticated marketing skills to these JVs, and the
local partner contributes its knowledge of the host country’s legal system, political process,
distribution channels, and the consumption habits of local consumers” (Griffin and Pustay,
2015). A strategic alliance is when two or more firm’s come to mutual understanding and
agreement to work together with the aim of achieving a shared objective. A joint venture (JV) is
, a form of strategic alliance, whereby a new company is erected. Joint ventures (JVs) are the most
complex and complicated type of strategic alliances (SAs).
Benefits of Joint Venture
Most joint ventures (JVs) occur often as a means of expediating entrant into a market,
share risk, knowledge transfer and capability, and stimulate collaborations with competitive gain.
In any given joint ventures (JVs), the strength of one partner is the other partners weakness.
Thus, both partners compliment one another with their strengths and weaknesses. It important
that organizations trying to engage in joint ventures consider the host nations laws and respect
for international business rules of engagement (Griffin and Pustay, 2015). The rationale behind
organizational decisions to enter into a joint ventures (JVs) or strategic alliances (SAs) with a
foreign partner is solely for the potential benefits in one or more ways.
Danone is always seeking new ventures around the world. One of such joint venture is
with a company in Bangladesh – Grameen. The organization seeks to find untapped markets like
the one in Bangladesh with promising market opportunities. The population of Bangladesh is 164
million people, and Danone see’s Bangladesh as an untapped market with many market
possibilities. Danone’s partnership with Grameen has changed the business landscape in
Bangladesh. Grameen’s goal is to enhance nutrition in Bangladesh while providing healthier
choices of food. Besides, Grameen hopes to reduce poverty by developing new markets for
Bangladeshi farmers. One of the conditions for the joint venture (JV) between Danone and
Grameen was to accommodate the Grameen’s goals. For instance, “its local factory uses as little
automation as possible to maximize job creation, and Danone scientists tinkered with product
formulas to eliminate the need for sugar, which would have had to have been imported” (Griffin
and Pustay, 2015). The first product from the joint venture between both Danone and Grameen
was the production of the Shoktidoi yogurt (the Bengali language, which is the official language
in Bangladesh, translates yogurt as a product that makes one strong). The Shoktidoi yogurt was
"Look before you Leap"
Barry Bland
California Intercontinental University
MGT 618: Mastering Leadership
Introduction
In the world of business, one of the savviest organizations is a company simply known as
Groupe Danone SA. The company is out of Paris, France, it specializes in yogurt, soft beverages,
and baby foods. When one talks about fresh dairy products, the word that comes to mind is
Danone. The firm is the number one in terms of fresh dairy product sales, Danone is the second
largest seller of bottled water, and toddler nourishment food. “Like many other MNCs, Danone
believes emerging markets, which currently produce one-third of its sales, offer it significant
opportunities for growth” (Griffin and Pustay, 2015). Groupe Danone SA currently employs
approximately 100,000 plus employees, in 2012, the company shattered its own sales record,
which was placed at 20.9 billion pounds. It is estimated that approximately 90 percent of Danone
sales are overseas. The intent of this paper is to discuss Danone’s Internationalizing strategy
using the case study - Look before you Leap. In addition, this paper will explain the benefits of
joint ventures, advance preparations before committing to joint ventures, joint partnerships
perspectives, Danone’s joint venture benefits, and Danone’s strategic choice(s).
In recent years, Groupe Danone SA has embraced a new business approach of partnering
with French domestic companies to enter favorable incipient markets. “Danone contributes its
financial clout, manufacturing expertise, and sophisticated marketing skills to these JVs, and the
local partner contributes its knowledge of the host country’s legal system, political process,
distribution channels, and the consumption habits of local consumers” (Griffin and Pustay,
2015). A strategic alliance is when two or more firm’s come to mutual understanding and
agreement to work together with the aim of achieving a shared objective. A joint venture (JV) is
, a form of strategic alliance, whereby a new company is erected. Joint ventures (JVs) are the most
complex and complicated type of strategic alliances (SAs).
Benefits of Joint Venture
Most joint ventures (JVs) occur often as a means of expediating entrant into a market,
share risk, knowledge transfer and capability, and stimulate collaborations with competitive gain.
In any given joint ventures (JVs), the strength of one partner is the other partners weakness.
Thus, both partners compliment one another with their strengths and weaknesses. It important
that organizations trying to engage in joint ventures consider the host nations laws and respect
for international business rules of engagement (Griffin and Pustay, 2015). The rationale behind
organizational decisions to enter into a joint ventures (JVs) or strategic alliances (SAs) with a
foreign partner is solely for the potential benefits in one or more ways.
Danone is always seeking new ventures around the world. One of such joint venture is
with a company in Bangladesh – Grameen. The organization seeks to find untapped markets like
the one in Bangladesh with promising market opportunities. The population of Bangladesh is 164
million people, and Danone see’s Bangladesh as an untapped market with many market
possibilities. Danone’s partnership with Grameen has changed the business landscape in
Bangladesh. Grameen’s goal is to enhance nutrition in Bangladesh while providing healthier
choices of food. Besides, Grameen hopes to reduce poverty by developing new markets for
Bangladeshi farmers. One of the conditions for the joint venture (JV) between Danone and
Grameen was to accommodate the Grameen’s goals. For instance, “its local factory uses as little
automation as possible to maximize job creation, and Danone scientists tinkered with product
formulas to eliminate the need for sugar, which would have had to have been imported” (Griffin
and Pustay, 2015). The first product from the joint venture between both Danone and Grameen
was the production of the Shoktidoi yogurt (the Bengali language, which is the official language
in Bangladesh, translates yogurt as a product that makes one strong). The Shoktidoi yogurt was
