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Comparative analysis of the strategies of implantation and expansion of Danone and Nestle (food and beverage industry) on the Chinese market

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  1. Presentation of Danone and Nestle : current facts and figures showing the respective positions of the two firms on the Chinese market
  2. Comparative analysis of the respective strategies of Danone and Nestle to establish on the Chinese market
    1. Time-to-market and consumption behavior
    2. Management, social corporate behaviors and interaction with local stakeholders

The two firms, Danone and Nestle are on the same segments of the food and beverage industry, they both produce dairy products, bottled water and biscuits. They also cracked the Chinese market at the same time in 1996 but not through the same market segment, which forced Danone to reconsider its position on key markets, i.e. fast-growth markets. In terms of staff, Danone employs about twice as more Chinese people than Nestle does. This should however, not be regarded in the perspective of contribution to the local social development but as a result of massive short-term investment policies to perform mass-production. Indeed, Danone has seventy factories in China, when Nestle only operates twenty-one of them. In terms of market share, we must recognize that Danone is better than Nestle as we can see in the following ranking: Danone ranks second in the segment of dairy products, first in the segment of bottled water and first in the segment of biscuits. Indeed, Danone is making higher profits in the Chinese market, about twelve times more than Nestle.

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