Danone in India
History of Danone India
Danone India is today a huge part in the work of internationalization of the French group Danone. This subsidiary was established in two steps. Danone first established in 1989 a merger with an Indian group called Britannia, they were just participative. Then in 1993, they took the control of Britannia so it became a Danone subsidiary. At this time, it was said that this buying had required an investment of RS 150 cores. Danone becomes after this merger the number one in biscuit and water on the Indian market thanks to three principal brands: Aqua, Britannia and Tiger. The fact that these three brands were already well known and appreciate by the Indian consumers permit to Danone to win market parts very quickly.
The macro environmental environment
The Republic of India is a country that occupies the greater part of the Indian subcontinent. It has a coastline of over seven thousand kilometers (4349 miles). India is the seventh-largest country by geographical area and has one of the most diverse populations of wildlife, geographical terrain and climate systems. Indeed it is the second most populous country in the world with nearly 1.1 billion people in 2005.It also is the world's largest liberal democracy. India has 28 states and 7 territories, and recognizes 22 official languages spoken across its diverse regions. After decades of intensive efforts to combat the widespread poverty, illiteracy and poor living conditions across the country, India's economy is today the fourth-largest in the world in terms of purchasing power parity (PPP) and the tenth-largest in nominal terms. Once reliant heavily on agriculture, India's economy is one of the fastest-growing in the world, and the nation is familiar with modern businesses and high-technology industries.
External analysis: PEST analysis
Indian market is today still very difficult to penetrate and particularly for western firms. But the strategy of Danone which consists to penetrate the market thanks to mergers or buy- out allowed a more secure and efficient penetration.
Danone is today the leader in biscuit and water thanks to the name of its three brands which were already established in India. So today the results in India are very good: India represents 20 % of the revenue of the Asian pacific area.
Political analysis (see map p.7)
Population: 1.1 billion
Capital: New Delhi
GNP: 620 $ per capita
India has been a democracy since independence. The prime minister is the head of the government. The president is the head of the state. India has to major political parties which are the Bharatiya Janat Party and the Congress. It is today the National Congress party which is on the head of the state, the BJP lost power in 1999. Since independence, India has maintained cordial relationships with most nations. During the Cold War , India tried to maintain its neutrality and was one of the founding members of the Non-Aligned Movement Recent overtures by the Indian government have strengthened relations with United States, China and Pakistan. In the economic sphere, India has close relationships with other developing nations of South America, Asia and Africa, especially Brazil and Mexico. In recent years, India has played an influential role in the ASEAN, SAARC and the WTO, and it is a signatory to the landmark South Asia Free Trade Agreement. India has been a long time supporter of the United Nations, with over 55,000 Indian military and police personnel.
The economy of India is the fourth largest in the world as measured by purchasing power parity (PPP), with a GDP of US $3.63 trillion. India was the second fastest growing major economy in the world, with a GDP growth rate of 8.1% at the end of the first quarter of 2005–2006. The country's economy is diverse and contains agriculture, handicrafts, industries and a lot of services. Services are the major source of...
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