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