Danone History Essay
The original company bearing the corporate name was founded in 1919 by Isaac Carasso, a Spanish physician of Greek origin, in Barcelona. In 1923, he came up with a unique treatment for patient with digestive problems and he developed a product that he distributed though pharmacies and drug stores, and which soon became a big success-yoghurt. The factory was named Danone, a Catalan diminutive of the name of his first son, Daniel Carasso. Ten years later, the company moved from Spain to neighboring France and the first French factory was built. In 1949, the yoghurt was firstly packaged in a glass can. In 1951, this glass package replaced the porcelain can which was used before and because of this change the yoghurt became more popular and very common in diary healthy alimentation. In 1968, Danone was firstly announced in TV. http://www.youtube.com/watch?v=njZNtHoM6ZQ
Some years later, they extended their brand by producing “petit suise” (1972), “Natillas” (1974) and also the first non-fat (1985). In 1988, Danone commercialized “Bio Yoghurt”, which nowadays helps us with digestive matters. In 1992, Danone was the main sponsor of the Barcelona 92 Olympic Games which added more popularity to the company. One year later, Danone Institute was born. The aim of this institute is to improve the citizen nutrition habits. In 1995, Danone continued extending its brand by incorporating Actimel, which supposed a revolution in the alimentary world due to its purpose of defense.
In 1998, Danone was the official sponsor of France football world championship. 2 years later, they create the official website of Danone: www.Danone.es. In 2004, Danone commercialized “Danacol”, a product which aim is to reduce cholesterol in a simple and efficient way. Danone launched a campaign in order to encourage families to lead a healthy lifestyle :”Danone Family”. In 2006, Danone started producing soya yoghurts 100 % vegetal. DANONE NOWADAYS…
Since 1998, Groupe DANONE has been organised in three business divisions worldwide which, in 2004, represented more than 97% of its consolidated sales: Fresh Dairy Products which groups together yoghurts, desserts and infant foods represent about 50% of the Groupe’s consolidated sales, Beverages, essentially packaged water, which represent about 25% of consolidated sales and Biscuits and Cereal products, which represent about 22% of consolidated sales. The motors of this supported growth are: a strong health/ well-being positioning, at the heart of concerns of consumers and new consumption opportunities (times or places) combined with the dynamism of the growth of emerging countries. This focus on 3 dynamic categories allows the company to have a determining strategic asset at its disposal to continue to display a growth rate that is higher than the average in the sector.
Balanced geographical presence
Today nearly 31% of the company’s sales are on emerging markets. This brings Danone close to its target, which is to do 40% of business on emerging markets and 60% in developed countries – a balanced presence that means they benefit from both the high potential of developing economies and the steady demand of more mature markets. In recent years, Group DANONE has built up strong positions on emerging markets to take the number-one place in each of their three core businesses.
This successful international expansion rewards a strategy focusing on a limited number of countries, selected for their growth potential, where Danone has the size to achieve significant economies of scale. Products within the reach of most consumers, high-profile brands, and effective, wide-ranging distribution for sales close to consumers are the essential components of our model for profitable growth on emerging markets, which we sum up as affordability, awareness and availability. In Western Europe, too, Group DANONE can look forward to continued, steady growth, building on strengths that include well-established positions.
World leadership built on local strength
In each of its business lines Danone is a world leader, which gives it a clear competitive advantage in terms of marketing expertise, industrial efficiency, breadth of product ranges and R&D. And in each case, world leadership is built on strong number one positions on local markets, enabling the company to forge both close ties to consumers and balanced, long-term relationships with major retailers., unrivalled familiarity with local consumers, and a recognized capacity for effective innovation http://www.danone.com/en/company/global-presence.html
In this part of the SWOT analysis we will focus on the strengths of the company. * Brand loyalty Danone disposes of an excellent background which, along with the consumer’s product perception creates this brand loyalty which allows the demand to be inelastic. Therefore Danone guarantees its sells stability. (falta rollo) * Innovation thanks to Danone Institute, this company is able to invest on a regular basis, in R&D, obtaining from it new product lines which fulfill consumer’s needs.
* Distribution channels Since the beginnings Danone reaches daily every single supermarket in every corner of the world thanks to its perfectly adapted transportation system which maintains all the products fresh and ready to be consumed. * Danone has a perfect flow of information inside the company. Information travels perfectly, up and down the hierarchical pyramid. Departments have coordination policies in order to take the maximum profit of their resources. This philosophy gives a chance to creativity and allows to improve current product lines as well as to launch new ones.
* Danone depends basically on daily products. We consider that if the company really wants to keep growing and becoming one of the multinational leaders, it should diversify its income sources. * A main problem Danone has, when willing to grow by exporting outside the EU is that its products are fresh and with a short caducity period. Therefore, if the company wants to take good positioning in foreign markets, it must invest in new facilities. Another option would be to create new product ranges of non-refrigerated yogurts which caducity periods are longer.
Danone Vitalinea has a strong presence in the fat free yoghurt market. Its 56% market share gives Danone the opportunity to invest in R&D in order to launch to the market new fat free products and sell them to the same consumers. Taking advantage of the increasing personal image concern, Vitalinea should be one of the strongest ranges of Danone Yoghurts, in order to properly supply the latent demand. Some segments of the population are not a target for Danone, and this should change. Danone should be a brand that consumers would buy every time they go to the store. Danone should be a brand that every family should have at home. The way to achieve it is to differentiate its products by offering special flavours and innovative possibilities. The consumer needs to know that Danone is the only brand that can offer the more specialized products, without forgetting about health, quality and price.
Danone Vitalinea is facing a market where too many products are offered to the different costumers. As we know, Danone Vitalinea has a 56% yoghurt market share, but competitors actually fight for the rest 44%. Danone offers quality products with high prices and competitors offer lower prices for the same type of products. This means that the consumer should receive a big added value when deciding to buy a Danone product. This market is plenty of imported products from other countries that accomplish with health and quality standards that Danone offers. The critical point is that they offer it at a lower price and if consumers decide to change Danone for another cheaper imported brand and they like it, Danone will definitely loose these consumers.
Subject: Groupe Danone,
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 16 October 2016
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