13-24. 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? Groupe Danone SA, the Paris-based marketer of yogurt, nonalcoholic beverages, and baby foods, has long been a savvy international competitor. Employing 102,000 persons, its sales in 2012 totaled €20.9 billion, 90 percent of which are outside of France, its home country. It is the world’s largest seller of fresh dairy products, and the second-largest vendor of bottled water and infant nutrition products. Like many other MNCs, Danone believes emerging markets—which currently produce one-third of its sales—offer it significant opportunities for growth. Danone has adopted a strategy of allying with local companies to penetrate promising emerging 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.

In Bangladesh, for example, Danone created a joint venture with the Grameen Group (see page 588 for a fuller discussion of Grameen). Danone viewed Bangladesh’s 164 million people as an untapped market. Grameen had two different, but complementary goals. It wished to improve nutrition in that country through the provision of healthier foods. It also wanted to reduce poverty by creating new markets for Bangladeshi farmers. To accommodate Grameen’s goals, Danone had to make some changes in its normal business practices. For example, 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. Grameen Danone’s first product is lowpriced Shoktidoi yogurt (Bengali for “yogurt that makes you strong”), which is fortified with vitamins to overcome nutritional deficiencies in the diet of rural children. Shoktidoi yogurt is made using milk provided by local farmers and is sweetened with molasses made from locally produced dates.