Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 11 March 1999
Length: 14 pages
Data source: Field research
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https://casecent.re/p/43744
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Abstract
In late 1998, 38-year-old He Boquan, CEO of the health beverage producer the Guangdong Nowada Group, needs to decide how to fund his company''s growth and ambition to become China''s number one domestic health beverage producer in China by 2002. A consulting study revealed that foreign competition in China was likely to accelerate within the next three years and that, without improved management skills and addition capital, Nowada risked going from being a leading to a marginalized player in China. The consulting firm therefore identified potential investors (including the investment arm of a European family conglomerate, an international direct investment firm, and a food and beverage multinational). In late 1998, several rounds of negotiations present He and his team with three options: to accept a majority investment by the MNC, accept a 25% capital injection with a risky repayment put option, or "go it alone."; Students are asked to evaluate Nowada''s situation in the context of intensifying competition; assess the various options on the table; and recommend a course of action to He and his team.
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Abstract
In late 1998, 38-year-old He Boquan, CEO of the health beverage producer the Guangdong Nowada Group, needs to decide how to fund his company''s growth and ambition to become China''s number one domestic health beverage producer in China by 2002. A consulting study revealed that foreign competition in China was likely to accelerate within the next three years and that, without improved management skills and addition capital, Nowada risked going from being a leading to a marginalized player in China. The consulting firm therefore identified potential investors (including the investment arm of a European family conglomerate, an international direct investment firm, and a food and beverage multinational). In late 1998, several rounds of negotiations present He and his team with three options: to accept a majority investment by the MNC, accept a 25% capital injection with a risky repayment put option, or "go it alone."; Students are asked to evaluate Nowada''s situation in the context of intensifying competition; assess the various options on the table; and recommend a course of action to He and his team.