Danone and its strategy for the international markets

Résumé du document

The strategy of a firm is the base of its business model; especially if it wants to operate in international markets. Numerous strategists and economists have already written some theories about the better way for strategies to go international. Bartlett and Ghoshal are two such authors. They worked together on four international strategies: a global strategy, an international strategy, a multi domestic strategy and a transnational strategy. These four strategies are functionally based on two criteria: the pressures for low cost reductions and the pressures for the local responsiveness. DANONE is one of the biggest companies in the world. This company is present in all continents thanks to its fresh dairy products, its beverages or its baby foods. This is a French company and it is a leader in this market. Danone is a French company. Its history began in 1966 with BSN Company which was a glass and packaging manufacturer. This market was decreasing, and the CEO, Antoine Riboud, decided to focus on the content side! In order to develop its market, it bought the Kronenbourg Company followed by Gervais-Danone Company in 1973.

Extraits

[...] In addition these standardized products are often produced in centralized locations (Johnson, Scholes & Whittington 2006). b. Disadvantages The main disadvantage is the lack of local responsiveness. This strategy often involves a global product-group structure Transnational strategy A transnational strategy is associated with high pressures for local responsiveness and high pressures for cost reductions (Bartlett & Ghoshal 1998). a. Advantages The transnational strategy is the most advantageous strategy but the most difficult to achieve. In fact this strategy involves several objectives. The first one is maybe what Barttlet & Ghoshal call the “global learning”. [...]

[...] The transnational strategy demands an organization really rigorous and quite difficult. Furthermore with this strategy it is easy to exploit experience-curve effects and location economies. Caterpillar is a firm pursuing this strategy. This strategy often involves a global-matrix structure. b. Disadvantages The biggest disadvantage of this strategy is the difficulties to put it in practice because of organizational problems. Conclusion DANONE, one the biggest international companies, chose a multidomestic strategy. We noted how DANONE works and manages its strategy very well. [...]

[...] Since 2000's the strategy has changed, it is on this strategy we will work. But Danone has a strategy of internationalisation which is global for all its subsidiaries but however each segment such as fresh airy products or beverages can vary between different countries and in function of the main strategy of the head office Danone strategy DANONE has a main strategy for itself and its subsidiaries. For example according to DANONE chairman the key points of the strategy of 2007 were the following: sales and operating income growth, innovation for the future, provide dynamic support for the brands, set up new production facilities, make major investments in research and above all accelerate geographical expansion. [...]

[...] Nevertheless the marketing is widely do in the local market in function of each culture, each language, etc. The customization of the product can be limited. But Hill & Jones argued that most international companies the head office retains tight control over marketing and product strategy”. In addition the companies are used to establishing manufactory in each major country. b. Disadvantages Several disadvantages are observed for this strategy. The first one can be the inability to realize location economies. The second one is the failure to exploit experience-curve effects. [...]

[...] In a second part we will study about the limitations of Bartlett and Ghoshal framework. What are the advantages or disadvantages to choose it for the firms? How the firms choose it? Part DANONE case study 1. DANONE overview Danone is a French company. Its history began in 1966 with BSN Company which was glass and packaging manufacturer. This market was decreasing, the CEO, Antoine Riboud, decided to focus in the content side! In order to develop its market it bought the Kronenbourg Company following by Gervais- Danone Company in 1973. [...]