Danone Strategy

Topics: Groupe Danone, Management, Emerging markets Pages: 18 (4907 words) Published: December 26, 2011

A world leader in the food-processing industry

This case study was prepared in close collaboration with Danone’s General Management. The authors wish to thank Mr Laurent SACCHI, Deputy Director to the Presidency, and Ms Charlotte PASTERNAK, responsible for press relationships and external communication, for their valuable contribution to the elaboration of the case study.

© CCMP 2011

Authors: Sylvie HERTRICH, Michel KALIKA and Ulrike MAYRHOFER

Initiating institutions: EM Strasbourg Business School, University of Strasbourg; IAE Lyon, Jean Moulin Lyon 3 University


I.Presentation of Danone4

A.Creation of the group and evolution of activities4

B.Strategic business units in 20105

II.Danone’s internationalisation strategy7

A.From the capture of the European market...7

B.…to a global expansion strategy8

III.Danone’s management10

A.Global management10

B. Humanistic management10

In 2010, Danone maintained impressive results; it achieved a turnover of 17.01 billion Euros (+6.9% in relation to 2009) and a net income of 2.03 billion Euros (+33.7% in relation to 2009). Improvements were observed across all strategic business units (SBUs) and all geographical areas, and the company even exceeded the objectives set.

Danone currently constitutes one of the most dynamic companies in the world in the food-processing sector. These last few decades, the company has evolved considerably as regards its SBUs, geographical markets and managerial practices. In a highly competitive market (Nestlé, Kraft Foods, Unilever, etc.), the company was able to adapt in order to pursue a growth strategy and stand out among the world leaders in its industry sector.

As a result of a refocusing strategy, Danone now manages four SBUs: (1) Fresh Dairy Products, (2) Bottled Waters, (3) Infant Nutrition and (4) Medical Nutrition. The geographical diversification of activities enables it to be present in many countries. Since the year 2010, which was marked by the setting-up of a joint venture with the Russian company Unimilk, emerging markets account for half of its turnover.

The company has set a clear strategic priority on profitable growth, in line with its mission of “bringing health through food to as many people as possible”.

You have just been recruited to work for the strategic development department at the head office of Danone in Paris. Your mission consists in analysing the strategic and managerial choices made by the company and in making recommendations for the upcoming years.

You are notably required to answer the following questions:

1. Analyse the evolution of the activities of Danone. Are the various development phases part of a specialisation/refocusing, vertical integration or diversification strategy?

2. Evaluate the internationalisation strategy followed by the group, and notably the selection of foreign markets, the pace of international expansion and the choice of entry modes.

3. What are the specific features of the management style adopted by Danone (alignment, organisation, culture, information system)?

4. Make recommendations concerning future strategic orientations which should enable the group to maintain a profitable growth strategy.

Presentation of Danone

Danone is a French company whose head office is located in Paris (17, boulevard Haussmann). The company has 100,995 employees and owns 160 production sites all over the world. In 2010, it achieved a turnover of 17.01 billion Euros and a net income of 2.03 billion Euros.

1 Creation of the group and evolution of activities

The group was created in 1966 under the name Boussois Souchon-Neuvesel (BSN), following the merger of the Boussois and Souchon-Neuvesel companies. The Boussois company was established in the North of France and produced glass for the building and automotive industries (flat glass). The Souchon-Neuvesel company was located in the Lyon area...
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