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Danone and its strategy for the international markets

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  1. Introduction
  2. Danone case study
    1. Danone overview
  3. Danone strategy
    1. Maximize local responsiveness
    2. Skill and product transfer
    3. Multidomestic mentality
    4. Personal control
    5. Decentralized federation
    6. Pressures for cost reductions
  4. Limitations of Bartlett and Ghoshal framework of international strategies with the example of Danone
    1. Multidomestic strategy: Advantages and disadvantages
    2. International strategy: Advantages and disadvantages
    3. Global strategy: Advantages and disadvantages
    4. Transnational strategy: Advantages and disadvantages
  5. Conclusion
  6. References

The strategy of a firm is the base of its business model; especially if it wants to operate in international markets. Numerous strategists and economists have already written some theories about the better way for strategies to go international. Bartlett and Ghoshal are two such authors. They worked together on four international strategies: a global strategy, an international strategy, a multi domestic strategy and a transnational strategy. These four strategies are functionally based on two criteria: the pressures for low cost reductions and the pressures for the local responsiveness. DANONE is one of the biggest companies in the world. This company is present in all continents thanks to its fresh dairy products, its beverages or its baby foods. This is a French company and it is a leader in this market. Danone is a French company. Its history began in 1966 with BSN Company which was a glass and packaging manufacturer. This market was decreasing, and the CEO, Antoine Riboud, decided to focus on the content side! In order to develop its market, it bought the Kronenbourg Company followed by Gervais-Danone Company in 1973.

[...] But, Hill & Jones argued that?in most international companies the head office retains tight control over marketing and product strategy?. In addition, the companies are used to establishing manufactory in each major country. b. Disadvantages Several disadvantages are observed for this strategy. The first one can be the inability to realize location economies. The second one is the failure to exploit experience-curve effects. The third one is failure to transfer distinctive competencies to foreign markets. This strategy often involves an international-division structure Global strategy A global strategy is associated with low pressures for local responsiveness and high pressures for cost reductions (Bartlett & Ghoshal 1998). [...]

[...] Moreover, we notice that in general Danone employs its staff directly inside the new country; the teams account a few expatriated people (Servel 2004) Personal Control According to Servel, in the case of China HQ subsidiary relationship, in 2004, DANONE was left with a lot of autonomy and for him the group is not in support of global integration. He adds that in the inter-subsidiaries relationship, DANONE maintained a strategy of delegation. Is it true after the confrontation between them? [...]

[...] (01/09/2004) The challenges that face firms from developed countries, in packaged food and drinks businesses, in low income countries: the case of Danone in China [online]. Available at: [Accessed 22nd February 2008]. LA SERENISIMA webiste (2008) Our history 2001 [online]. Available at: [Accessed 22nd February 2008]. DANONE website (2008) Growth driven by Fresh Dairy products [online]. Available at: [Accessed 23rd February 2008]. Hill, C.W. & Jones, G.R. (2001) Strategic Management Strategy 5th Ed. Boston: Houghton [...]

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