Research Proposal: Foreign Direct Investment of Wahaha, China

This research proposal examines the foreign direct investment (FDI) strategy of the Wahaha Group, a prominent Chinese company. The report investigates the role of FDI in business expansion and the specific expansion strategies employed by Wahaha, particularly through joint ventures. It includes an overview of FDI, research objectives, and questions focusing on the impact of FDI on business growth. The literature review explores the advantages of FDI, such as market diversification and tax incentives, and analyzes Wahaha's approach to joint ventures. The methodology section outlines the data collection process, relying on secondary sources like scholarly journals, government websites, and news articles. The proposal aims to provide a detailed understanding of how FDI influences Wahaha's global expansion and its success in the international market.

Running head: RESEARCH PROPOSAL
FDI OF Wahaha, China
Name of Student:
Name of University:
Author Note:

1RESEARCH PROPOSAL
Table of Contents
Introduction......................................................................................................................................3
Overview......................................................................................................................................3
Research objectives.....................................................................................................................3
Research questions.......................................................................................................................3
Literature review..............................................................................................................................3
Role of foreign direct investment in expansion...........................................................................3
Wahaha expansion strategy.........................................................................................................3
Research Methodology....................................................................................................................4

2RESEARCH PROPOSAL
Introduction
Overview
FDI is the acronym given to foreign direct investment. It is a process of making
investment by an individual or a firm located in a particular region of a country into the business
interest, which are located in some other country. FDI is the process of expanding the business to
promote a global organization or business (Almfraji and Almsafir 2014).
Following is a research proposal for the Chinese company called Wahaha group for
involving foreign direct investment for the expansion of the company and emerge as a globally
valued brand just like having a reputed brand value in China. The topic is intriguing to be
analyzed for a research proposal for the reason that it allows to understanding how FDI affects
the business grow globally. What are the challenges and procedures for globally expanding
business? The concept of FDI is understood with Wahaha Group taken into account. The strategy
of the group for investing in FDI is understood relating it with other successful global business.
To build a strong analytical skill for understanding the benefits and demerits of the subject is also
the reason for selecting the topic.
Research objectives
The aim and objective of this research proposal is to: Understand the scope of FDI for
expansion of business and, Relate to the benefits of FDI for becoming a global organization.
Research questions
The research questions identified for this research proposal is: What is the role of FDI in
business expansion? What is the expansion strategy of Wahaha?
Literature review
Role of foreign direct investment in expansion
As mentioned above foreign direct investment is the investment made by the individual
or organization in one country into another country to fulfill its business interests. One example
of this is Amazon establishing its new headquarters in Vancouver, Canada to expand its business
in a foreign country (Judd 2018). There are various ways to acquire the power for voting in a
foreign company for a domestic investor. These techniques are namely, Managers and
acquisitions, Getting into joint ventures with companies in foreign, Acquiring voting stock for a
company based in foreign, Building a subsidiary of the domestic firm in other country.

3RESEARCH PROPOSAL
Foreign direct investment has to offer various other advantages to the foreign host country along
with the investor. This help in promoting business expansion and encourage both parties to
engage in FDI. The few benefits of FDI can be understood as a strategy for expansion are
Diversification of market, Subsidies, Preferential tariffs, Tax incentives, Lower cost of labour
(Petrescu et al. 2011)
Wahaha expansion strategy
Wahaha expansion strategy by foreign direct investment is of getting into joint venture
with organization located globally. The first endeavor was made by Wahaha in the year 1992,
when Wahaha collaborated with a South Korea based company into a 50-50 partnership to form
Hangzhou Wahaha Hyonong Canned Food. Later on in the year 1996, the South Korean
company Hyonong sold its share in the joint venture to the food company Danone and the
company thereafter was named as Hangzhou Wahaha Foods (Hamilton and Zhang 2011).
The survival strategy of Wahaha from foreign direct investment is to expand globally by
getting into a horizontal foreign Direct Investment plan. The experience gained is helpful in
developing business processes and functionality at Wahaha in terms of efficiency. The scope of
joint venture to the company is immense considering the committed effort of the company to
expand its business operations. Among other joint venture companies formed by the Wahaha
group are Hangzhou Wahaha Foods Co, Hangzhou Wahaha Health Foods Co, Hangzhou
Wahaha Beverages Co, Hangzhou Wahaha Baili Foods and Hangzhou Wahaha Quick Frozen
Foods. The Wahaha group experienced a growth in business into 39 joint ventures entities by the
year 2007 (South China Morning Post 2019).
Research Methodology
For this research proposal, the data was acquired from the internet. The strategy was first
to select a topic of potential interest and is intriguing. Post selecting the topic the data was looked
on the internet relying on verified sources like scholar journal, official or government websites
and news websites. Further, this data was synthesised and coagulated for using in this report.
Using Research methodology consists of processes used to identify and select the appropriate
information for addressing the research questions in the most logical manner and to analyze the
data to acquire the findings for the study (Kumar 2019)

4RESEARCH PROPOSAL
For this report, secondary data is collected from articles, books or journals and internet
source containing the researched information. Secondary data is the data that allow the
researcher to rely on the journals and books that is already published.

5RESEARCH PROPOSAL
References
Hamilton, S. and Zhang, J., 2011. Doing business with China: Avoiding the pitfalls. Springer.
South China Morning Post. (2019). Danone and Wahaha vie for the last laugh. [online]
Available at: https://www.scmp.com/article/596357/danone-and-wahaha-vie-last-laugh
[Accessed 2 Aug. 2019].
Almfraji, M.A. and Almsafir, M.K., 2014. Foreign direct investment and economic growth
literature review from 1994 to 2012. Procedia-Social and Behavioral Sciences, 129, pp.206-213.
Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage Publications
Limited
Petrescu, C.E.H., Joia, R.M., Hurduzeu, G. and Vlad, L.B., 2011. Foreign Direct Investments
Expansion-Essential Globalization Factor. Theoretical & Applied Economics, 18(1).
Judd, A. (2018). Justin Trudeau announces new Amazon Vancouver headquarters to bring 3,000
jobs. Global News. Retrieved 3 August 2019, from
https://globalnews.ca/news/4176455/vancouver-amazon-headquarters/