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Danone: how can it become a world leader in its three core businesses?

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  1. Company Presentation
  2. Aldi or the concept of "hard discount"
  3. Exporting the concept
    1. Australia
    2. Switzerland
    3. France.
    4. USA
    5. Trader Joe's: Aldi's way of the diversification
  4. Conclusion

Today, the subprime crisis has shaken the established economic order. Companies are facing a delicate situation where growth prospects are being questioned. Moreover, inflation in consumer goods is changing both the strategies implemented by companies, and consumer attitudes. In this climate of uncertainty, firms must focus on the heart of their business to minimize risk.

Danone, the food multinational, is currently ranked third on the market. The company has built its international business around three core products: fresh dairy products, biscuits and bottled water. This strategic choice has enabled the company to become the world leader in the market for fresh dairy products and number two on the market for biscuits and bottled water.

It is important to note that in this market only the market leader can generate sufficient margins to ensure profitability. Consequently, Danone is obliged to stay and be a leader on these three core business.

Thus, the company must first develop a summary of its internal and external environment. In view of that, Danone must adjust its marketing strategy by defining objectives in line with the changing consumer behavior and market. Its plan to become the world leader will be realized only under the assumption that it will implement targeted measures and a tailored strategy.

The Danone Group is present in 120 countries and achieved a turnover of 13.1 billion € in 2003. Danone owns many brands such as Lu, Evian, Wahaha and Danone course. These four brands together account for 53% of the turnover of the group. Then, the group has other brands such qu'Actimel, products Taillefine, Volvic, Bledina, Danacol, or Pepito.

Groupe Danone is the world leader in fresh dairy products and bottled water (by volume) and No. 2 worldwide in the biscuit market worldwide.

On the beverage market, sales of Danone Group amounted to over 3.4 billion euros thanks to strong positions in Europe (No. 1 in Spain, Germany (flat water) and Poland, No. 2 in France), Latin America (No. 1 in Argentina, Mexico) and Asia (No. 1 of packaged water in China and Indonesia).

Its main competitors are in the areas of bottled water and fresh products, Nestlé. In cookies, these were mainly of United Biscuits (but in some countries, including Belgium, Lotus Bakeries).

Nowadays, the consumer has never been so attached to brands because of safety value it represents. Regarding the attitude of it, given the profusion of products in food and concern in terms of purchasing power, it is very unstable unfaithful to see marks.

However, from a strategic perspective, where Danone is advantageous, since the group key positions in three businesses (water, dairy products, biscuits), two of which are growing much higher than the food sector (water, dairy products) and is about to separate at the right price. Moreover, despite a difficult start, the group consists of strong positions in emerging markets.

Tags: Danone, packaged water, marketing strategy

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