Danone's corporate strategy

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Corporate Strategy

Danone is a specialized market for food and has a presence and an international reputation.
The group is the world's largest producer of fresh dairy products, the second largest producer of bottled waters, the second largest producer of infant nutrition and the European leader in medical nutrition. In addition, the group has many leading brands on the domestic andinternational markets, such as Danone, Evian, Lu ..
In 2009, the group has continued its growth and has maintained its leadership position with a turnover of 14,982 million €, an increase of 3.2%.
Thus, we will discuss a diagnosis with internal and external how the group manages to maintain its leading position in this market.

I. Internal Analysis :
In order to process to the internalanalysis of Danone Group, we will firstly use the tool SWOT with the strengths and weaknesses of the group, and then we will study its unique resources and core competencies.
a) SWOT :
To begin, we will present strengths of Danone Group :
* Danone Group possesses a strong global reputation thanks to its brands such as Evian (which is the best-known water’s brand in world), Bledina, Danone,Actimel.. Moreover, consumers have an important confidence in Danone products.
* The group also has the ability to impose its prices thanks to its reputation and its position as market leader. De par son importance et ses volumes de vente, il a la possibilité de choisir et de négocier les prix des matières premières avec les fournisseurs.
* Thanks to its leadership position and its notorietyon the food market, Danone can be ubiquitous and obtain an important margin trading.
* Danone has successfully create partnership with several groups and firms within the world, that provides a strong local position
* Danone results are increasing since many years that permit it to have a healthy organizational and financial structure, in order to invest on new foreign markets and to keepits leadership.
* Danone has an excellent capacity for innovation, by proposing products offer, which satisfy consumers.
* The group puts in place a strategy face to the crisis of 2008 that has been successful. Indeed, the group has success to maintain a growth of its turnover and also to raise its sales volumes.
Secondly, we will study weaknesses of Danone Group:
* The increase ofthe raw material rates has an impact on Danone costs and on its trading margin.
* The financial crisis has impacted the purchase power of consumers, which has forced Danone to reduce its prices, in order to consumers continue to buy Danone products at the exchange of less expansive products, such as discount products.
* The competitors such as hard discounts or distributors brands thatpropose less expansive products attract more and more consumers that prefer buy similar products but with less expansive prices.
* The use more and more important of tap water at the expense of bottled water, resulting in lower sales for the group
* Brands are the basis of the group, there is a risk in case of loss of consumer confidence in these ones.

b) Unique resources and corecompetencies
* Unique resources:
Group Danone brands are present on five continents, giving it a global reach. It has about 160 plants to the world, and employs about 80,000 employees.
In 2009, the group has realized a turnover of 14 892 millions euros, it represents an increase of 3,2% compared to 2008. It also increased sales volumes of its products with a 5.2% increase in volumes in 2009. Thishas been achieved by adapting the group to the crisis, with falling prices of certain products and has enabled consumers to use despite the decline in their purchasing power.
This offensive strategy from the crisis, allowed him to remain competitive in the face of intense competition from hard discount stores generally offer cheaper products that are very popular among consumers in these times...