Danone Case

INTRODUCTION

Groupe Danone (Danone or ‘the group’) is engaged in the production and marketing of fresh dairy products and beverages. The group operates in Europe. It is headquartered in Paris, France and employs more than 100K people.

KEY FACTS

The group recorded revenues of €19,318 million during the financial year ended December 2011 (FY2011). Related Statistics: World number 1 in fresh dairy products;World number 2 in bottled waters;World number 2 in baby nutrition;European number 1 in medical nutrition;2011 operating profit: €2.843 million;Operating margin: 14.72%;Net current profit: €1.749 million;Total workforce as of 31/12/2011: 101,885 people

Principal Brands:

DANONE: world number 1 fresh dairy products brand;LU: world number 2 biscuit and cereal fast food brand;Evian and Volvic occupy 2 of the 4 world’s most famous brands of bottled water, and play a vital role in the regional market.;Wahaha, China market number 1, world number 2 bottled water brand

Company Marketing Strategy:

The strategy in action: Focus on the four strategic priorities: Health, For All, Nature, People.

INDUSTRY BASED VIEW – PORTER’S FIVE FORCES:

5.1 Buyers -Foods are daily necessities and there are many options, so the buyers have high bargaining power. 5.2 suppliers -Many potential suppliers exist around the world, so the suppliers have low bargaining power. 5.3 Threat of new entrants to the industry -Usually the start-up cost to enter this industry is very low, the capital investment requirement is not high also, and the level of technology or skills is not that special, so the threat of new entrants to this industry is very high.

5.4 Threat of substitution -As Foods are daily necessities and there are no direct substitutes. So the threat of substitution is low;

5.5 Rivalry among the existing players -Within this industry, there are a lot of firms, which include not only domestic firms but also international firms, so the rivalry among the existing players is very...