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Danone Group in China
Jay ShahTara Hayes
Jinay C. DedhiaLauren LoPrimo
Company Profile Danone brand founded in
1919 by Isaac Carasso, Spain
Business Lines Fresh Dairy Waters Baby Nutrition Medical Nutrition
DG Rankings
Global Presence MICRUB Emerging economies
56%30%
14%
2010 Regional Sales
europerest of worldasia
Company Timeline
1919 – Danone brand
founded by Isaac
Carasso
1929 – First French
factory built
1987 – Entrance into China
2002 – DG divests dairy
operations; Commences strategic shift with
joint ventures
2010 – China listed
as one of DG’s top 10
markets
Key Competitors Nestle (NSRGY)- A Swiss company that produces packaged
food and beverages as well as products for the personal care market. Nestle is the worlds largest packaged food company and a worldwide competitor for Danone
Unilever NV (UN)-A Dutch company that produces packaged foods and products for the home and personal care markets. Unilever is one of Danone's largest international competitors.
Kraft Foods (KFT)-A U.S. company that produces packaged foods products. Kraft is one of Danone's largest U.S. based competitors.
Cadbury Schweppes (CSG)- A U.K. company that makes confectionery and non-alcoholic beverages. Cadbury Schweppes primarily makes carbonated soft drinks, which do not compete directly with Danone's milk- and water-based drinks. However, its carbonated beverages are possible alternatives to Danone's beverages.
Products
Branding Strategy
Corporate Brand
Products
Language Variations
Localization
Dannon in China
SWOT AnalysisStrengths
• Social Responsibility • Language variations in their logo and packaging• Localize brand names in bottled water sector of their business model
Weaknesses• Ethnocentric• Lack of refrigerators• Chops sticks used with meal consumption• Lactose intolerant• Yogurt too costly for average Chinese household
Opportunities• Lucrative market• Domestic company’s joint venture
Threats• Local Brands• International Competitors in Chinese Markets
Barriers to Entry - Chinese Market
Ethnocentric
Lack of refrigerators
Chops sticks used with meal consumption
Lactose intolerant
Yogurt too costly for average Chinese household
FinancialsDec 10 Dec 09 Dec 08
Revenue 22,541.7 21,472.2 21,452.6
Cost of Goods Sold 10,547.3 9,672.7 10,108.9
Gross Profit 11,994.4 11,799.5 11,343.7
Total Net Income 2,478.1 1,950.6 1,850.7
Net Profit Margin 11% 9.1% 8.6%
Diluted EPS from Total Net Income
4.03 3.55 3.86
Dividends per Share 1.59 1.72 1.55
http://finance.danone.com/phoenix.zhtml?c=95168&p=irol-results
6 Stages of Danone Product
RecommendationsSocial Responsibility
Product Diversification
Global Knowledge Management
The evolving understanding of the food impact on health.
Contributing to the well-being and the balanced daily diet of consumers
Adapting food's nutritional profile to the specific needs of given populations
Referenceshttp://finance.danone.com/phoenix.zhtml?
c=95168&p=irol-results
http://www.btimes.com.my/articles/dannest/Article/
http://www.ingredientsnetwork.com/news-content/full/danone-and-nestl-suffer-china-setbacks
http://www.danone.com/en/innovation/innovation-management.html