Models Ofcooperative Development: The Case Of Vanke

As a result of the increasingly fierce competition and changes of the market environment in the real estate industry,cooperation in real estate development projects focusing on land and capital resources have become more and more frequent.How to best control the risks in cooperation and select the most suitable mode of cooperation have become a universal concern of real estate developers.This paper analyzes the project collaboration mode of China Vanke Co.,Ltd.(abbreviated as Vanke in the following)as a case study.Vanke,a leading enterprise in China's real estate industry,has set up its active expansion strategy driven by collaborative development mode since early 2005.After more than ten years of growth,Vanke's sale revenue has reached over RMB 200 billion,among which the number of collaborative projects has kept over 60%.In these projects,Vanke has succeeded in keeping reducing capital inputs and increasing no debt,no fall in investment benefit rate,and maintaining a relatively high annual growth rate.Why could Vanke gain relatively large profits in its collaborative projects to further help it realize a large success in business? How did they determine the cooperation mode? How did they operate business and avoid the potential risks in collaboration? What beneficial experience and lessons can we learn from the Vanke case? These are the points this paper analyzes.Vanke has figured out a mature project collaboration mode and a set of rules from its over-ten-year practice.The collaboration mode can be categorized into land collaboration and capital collaboration.This paper mainly uses four methods to conduct the analysis,i.e.case study,literature review,experience summarization and descriptive research.Besides,other supporting methods are also used,including 1)interviews with relevant personnel of Vanke in various departments,representatives of Vanke's partners,and other people involved;2)participating in the management process of Vanke's cooperation projects to know its collaboration mode and the implementation of collaborative development,in order to figure out the conflicts between Vanke and its partners and other potential problems.Also,this paper studies how to best avoid risks by refining the terms in a cooperation agreement for a collaborative project.Finally,this paper analyzes the impacts of the collaboration mode on projects from the perspective of all stakeholders through conducting detailed case studies.To conclude,the paper proposes how to set up cooperation rules at the beginning of a collaborative project,analyzes the potential problems in cooperation,and suggests how to avoid and reduce project development risks related to the collaboration mode.Through fully study of Vanke's collaboration mode,this paper finds the key points to the success of project cooperation:(1)let the party stronger in business manage stock trading,(2)focus on the collaboration mode matches the cooperation agreement,and determine the exit mechanism in advance.There are limitations when directly copying Vanke's project collaboration mode,and it's most likely to figure out an innovative direction of collaborative development mode in the financial model.Collaboratively developing projects should eventually return to its fundamental goal: resource sharing and win-win cooperation.All parties shall seek to achieve their interests based on the project success and profit maximization.