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Analysis of Group Danone and strategic market positioning (2008)

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  1. History
    1. The merger of two national leaders
    2. The activities of the Orange group
    3. The organization of the group
    4. Products and Services
  2. The development strategy
    1. The social responsibility strategy
    2. Environment and Sustainable Development
  3. The communication strategy
    1. The media coverage of Orange

The results of the first half of 2008 reflected a 9.6% growth of the various 'Strategic Business Units' from the restructuring of Danone completed in 2007. Indeed, the Danone Group recorded a turnover of over 7.7 billion Euros for the same period. But what developments have Danone undertaken from its creation until today, what is its place in the market now? And what is the strategy of Franck Riboud (Chairman and Chief Executive Officer of Group Danone)?

Originally, Danone was called BSN (Boussois Souchon, Neuvesel); it was a Lyons-based company producing glass. BSN began to specialize in contents in the 70s to face the decline of the glass sales. It merged with the food group Gervais in 1973. After the undertaking of some mergers, the group withdrew from the glass business in 1979. Then it finally acquired a European biscuit manufacturer Lu in 1987 and engaged itself in the biscuit market to finally give birth to the Danone Group in 1994.

In 1998, Danone dropped several activities such as beer and packaging that did not fit in its strategy to focus on three main segments: dairy products, mineral water and biscuits and cereal products. Danone already had the ambition to position itself in the segment of well-being and health.

Danone has refocused on this segment of well-being and health sector by abandoning the biscuits and cereal products by selling Lu (representing 16% of sales in 2006) Kraft Foods in November 2007. This sale enabled him to purchase the Dutch group Numico by a takeover in July 2007. Numico is a jewel in Danone's ambition "to bring health through food to the greatest number."Indeed it is the entry for the Danone era of probiotics, prebiotics and biotechnology more broadly. In 2008, Danone is spread over 4 DAS that are fresh dairy products, mineral waters, medical nutrition and infant nutrition and allows it to be consistent with its strategy for health and wellness through diet.

Danone has begun to expand internationally to reduce its dependence vis-à-vis traditional markets (Europe mainly) where he directed more than half its sales. It focuses on growth markets of Asia and America.

The first method of development chosen by Danone is external growth. Danone chooses to build partnerships with companies that are leaders or challengers in their local market to better respond faster to local eating habits and have a production tool, a distribution channel and an existing logistics. This saves not only time (image and consumers already won) but also reduce production costs. If the partnership is satisfactory and promising, Danone increased its stake in the company before buying. Thus it has launched in the USA with Stonyfield.

Tags: Danone Group, analysis of Danone, Danone's strategic marketing position

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