Market Analysis
of Danone
(Yoghurt) in UK
Group Members: Yifei LI, Qimin SUN, Shan ZUO, Yanzhen CHEN
Contents
l Introduction
l Macro Environment
l Micro Environment
l Challenges and Opportunities
l Planning and Decision
l Classical Theories
l Conclusion
l References
01
Introduction
Introduction
l Establishment:
French multinational food-products corporation
l Four businesses lines:
Dairy and plant-based products
Waters
Early life nutrition
Advanced medical nutrition
l Internationalization:
Western Europe
Russia and other Eastern European countries
Introduction
Danone mission statement
l “Bringing health through food to as many people as possible.”
l Baby food and medical nutrition.
l Danone’s values emphasis on social and environmental responsibility.
Financial Information
l Consolidated sales in 2017 of €24.7 billion.
l In 2018, Danone sold products in 120 markets, and the first half of 2018,
consolidated sales stood at €12,498 million.
02
Macro Environment
PEST Framework
Political Factors
Socio-Cultural Factors
l Politically stablity
l Aware of health
l Lower taxation policies
l Media outlets
â Brexit
l Educational level
Economic Factors
Technological Factors
l Economic performance stable
l Advanced technology
l Trade policy
l Data Analysis
â Exchange rate
l Empowerment of supply chain
â Inequality in society
03
Micro Environment
Porter's Five Forces
• Competition in the industry: High
• Nestle, Kraft Foods, Muller Milk & Ingredients
• Potential of new entrants into the industry: Low
• Start-up cost is moderate
• Numerous choices in the market
• Power of suppliers: Moderate
• Rise in price of raw materials would affect the profitability
• Power of buyers: High
• Retailers have strong power of negotiation (e.g. Tesco, Aldi, Sainsbury's)
• Threat of substitute products: High
• Stiff competition
04
Challenges and Opportunities
SWOT Analysis
Strengths
Weaknesses
• Differentiation strategy
• High raw material costs
• Innovation
• Lack of long-term planning
• Quality of products
• High popularity of products
Opportunities
Threats
• Market share in UK
• Competition
• Trends in consumer behavior
• Own brands from different stores
• Acquisition of WhiteWave in 2017
• Laws and regulations
Summary
Opportunities:
• Market in UK
• Top 3 countries as % of sales (2017): Russia, France, Spain
• Trends in customer behavior
• The number of UK consumers buying healthy food is growing (Crimson
Hexagon, 2016)
• Acquisition of WhiteWave in 2017
• Inspire healthier eating and drinking choices
• A wider range of nutritious and great-tasting products for consumers
Challenges:
• Competition
• Nestle, Kraft Foods, Muller Milk & Ingredients
• Own brands from stores
• Tesco, Aldi, Sainsbury's
• Laws and regulations
• ASA and CAP regulations
05
Planning and Decision
Ø Like-for-like sales growth between 4% and 5%
in 2020
Goals
• above 5% for EDP Noram
• between 3% and 4% for EDP International
Ø By 2020，3-5 percent organic sales growth in
its dairy division
Plans and processes
l
B Corp certification: a main milestone in creating both economic and social value.
l
WhiteWave: solidify their ability, maximize their growth opportunities.
l
An efficiency program Protein—savings of €1 billion by 2020: spend better, buy
better, work more efficiently.
l
Close relationships with local producers: manage its dairy subsidiaries better, the
optimal quality of the milk.
Progress in 2018
Ø
30% of their total sales were certified B Corp
Ø
75% of former WhiteWave portfolio growing at more than 5%
Ø
Protein efficiency program delivering ahead of plan , around €300 million
Ø
Total sales +2.9% like for like in 2018
•
EDP Noram sales up +1.5 like for like
•
EDP International sales up +2.1 like for like
Resources needed for Danone yogurt in UK
Resources
Reasons
Physical
§ Large factories, warehouses — Yogurt production and transportation
in short time.
Human
§ Worker, administrative employee (marketing, supply chain, finance),
scientist (R&D teams).
Financial
Intangible
§ Capital — launch of new product and large marketing campaign.
§ High brand awareness and consumer trustworthiness — essential in
the mass market competition.
§ Innovation — new fashionable Yoghurt .
06
Classical Theory
Scientific Management Method
l
Select the best worker
l
Employee Development
l
Financial Incentives
l
Take part in the management
Select the Best Worker
Six steps of Recruitment in Danone
l
Strict requirements on employee’s CV (Curriculum Vitae)
l
CEB SHL Numerical and Verbal Test
l
Video interview
l
Leadership Academic
l
Face-to-face to develop “codes” ability
l
Prepare for the success
Employee development
Year one:
Induction and Self awareness & personal impact
Process:
person development, Building a network and Functional / Specialist Skill
Year two:
Coaching and Community Challenge
Financial Incentives
l A fair assessment of performance
l A motivating compensation policy
l A range of benefits to take care of the health & well
being of employees
Take part in the management
Only emphasize every employee can participate in the management
07
Conclusion
Conclusion
l
Rapid Growth in the world market
l
Keep competitive in the future
l
Keep leadership around the world
l
Scientific management method
Reference
l Euromonitor (2011) Bottle water in 2011: Building on a Rebound on Growth, [Online], Available:
www.euromonitor.com [20 June 2014].
l Danone Strategy. Retrieved March 18, 2019:
http://myacademicassist.com/pdfs/Danone%20Strategy-1.pdf/
l 2018 INTERIM FINANCIAL REPORT. (2018). Danone, Retrieved March 18, 2019:
https://www.danone.com/content/dam/danone-corp/investors/en-allpublications/2018/interimfinancialreports/Danone%20-%20Interim%20financial%20report%202018.pdf
l 2017 REGISTRATION DOCUMENT ANNUAL FINANCIAL REPORT. (2017). Danone, Retrieved
March 18, 2019: http://danone-iar-prod.s3.amazonaws.com/Danone__Registration_Document_2017.pdf
l CARAMELA S. (2018). The Management Theory of Frank and Lillian Gilbreth, Business,
Retrieved March 16, 2019: https://www.business.com/articles/management-theory-of-frank-andlillian-gilbreth/
l Grosser, M. and al, e. (2010) Danone, Retrieved March 16, 2019:
http://www.danone.com/sustainability-Report10/
l Hill, J. (2010) 'Successful Brand enhancement thorugh packaging, best practice in
leveraging unique brand attributes and innovative porducts', Business Insights, pp. 1-159.
l Mintzberg, H. (2001) ' The Strategy Concept I: Five Ps for Strategy', California Management
Review, pp. 11-24.
l Singh, A. (2013). A study of role of McKinsey's 7S framework in achieving organizational
excellence. Organization Development Journal, 31(3), 39-50. Retrieved from March 24,
2019: https://search.proquest.com/docview/1467437673?accountid=13828
l The McKinsey 7-S Framework. (n.d.). MindTools, Retrieved March 24, 2019:
https://www.mindtools.com/pages/article/newSTR_91.htm
l Datamonitor (2010) Groupe Danone SWOT Analysis, [Online], Retrieved March 24, 2019:
http://wenku.baidu.com/view/5897bc778e9951e79b8927e0.html
l Euromonitor (2011) Bottle water in 2011: Building on a Rebound on Growth, [Online],
Retrieved March 24, 2019: www.euromonitor.com
Thank you