Danone case study in Poland
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This document deals with the implementation analysis of the Danone brand in Poland. It includes the interview with the CEO and discusses the various risks involved. It comprises an analysis of their implementation strategy, and challenges that have emerged. It examines if these errors could be avoided and if yes, how can they be avoided? An analysis of key success factors for a successful implementation is also undertaken.
First Poland had a collapse of the dairy industry since 1989, the tools were considered obsolete and highly fragmented. It was thus an urgent need to establish themselves before structuring. The year 1989 was a pivotal year that corresponds to the transition from a command economy to a market economy. This marked the abrupt withdrawal of support from weak unions and the milk prices suffered.
The collection of milk had fallen sharply in 1989 resulting in lower consumption. The difficult of recovery in consumption, the strength ofconsumption and direct sales, as well as seasonal variations make it difficult to structure and reconstruct a crippling sector. Only 60% of the milk was processed at this time, against 94% in the European Union.
Prices were no longer supported, the purchasing power was reduced, the food ranges were extended, the consumption of dairy products strongly decreased. All this, Danone was aware of and this is information that could be got by various market research and by taking time for reflection and analysis.
Danone could have decided to locate in areas of the North East and particularly in the area of Poldachie. Indeed, this region, certainly a little more distant from consumption centers, had the advantage of being a great dairy region.
The staff was qualified, there was no established competitors. Certainly there were cooperatives that were reluctant to see the establishment of foreign companies. But the consequences would probably have not been as catastrophic as those experienced by Danone in Warsaw.
Thus, the choice of partner could have been avoided by locating elsewhere or seeking to partner with another partner. Indeed, the local partner should have informed Danone on the difficulties of implementation in a country such as Poland for greater involvement in its draft partnership with the Danone Group.
In addition, the Danone management could have sought to locate in an area with better infrastructure to a get a good start. Thus, to ensure success, they had to build a good foundation. By choosing to set up in Warsaw with an incompetent partner, the launch was bound to fail.
In addition, the marketing of Danone products could not do without effective communication. This area was certainly not very developed at the time, and regulations were numerous. However, Danone management should have been mindful of the fact that it had to address a different market,tackle a new culture, values and different behavior. Danone can not simply propose the same spots through the same media.
Another problem is that of social order. Danone could not keep its staff. Indeed, while establishing the company, Danone did not want to meet the salary expectations of the workers that were being hired and started losing its workers to the competitors. A lack of human resource management in the Poland Danone company directly benefited its competitors.
Tags: Danone group, presence in Poland, challenges faced by the company