Robu Ionut-Cristian
Group 936 Groupe Danone - issues regarding its policies 1. Company’s background
The company has its roots in Spain, where Danone was founded by Isaac Carasso in 1919. Having previously lived in the Balkans where yogurt was a dietary staple, Carasso decided to introduce this healthy product in Barcelona. He opened a small yogurt business named "Danone," meaning "Little Daniel" after his son.
Carasso was aware of scientific advances that had been made with fermented milk by Elie Metchnikoff at the Pasteur Institute in Paris. He perfected the first industrial manufacturing process by combining the traditional method of making yogurt with the pure cultures that had been isolated in Paris.
In 1923, the first Danone yogurts start to be sold in pharmacies as doctors recommend it for its therapeutic qualities.
The younger Carasso, Daniel, learned the family business in Spain and decided to establish Danone in France in 1929.
In 1949, the yogurt is almost a dairy product. The porcelain “envase” is substituted by the one made of glass. This innovation makes it easier to popularize the yogurt.
In 1968, Danone starts its first TV campaign.
In 1985, Danone creates its first “low fat yogurt” called “Danone Desnatado”.
In 1992, Danone was the Official Sponsor of Barcelona's Olympic Games.
“Danone Institute” is created in 1993. Its main objective is to research and develop healthier and better products for the company.

2. Mission, values and corporate philosophy
Danone Group's mission or main objective is to grow as a leader while working for consumers' health. It also wants to become a consultative organ for professionals through its research activities and its company's culture.
Danone is one of the world leaders in the food industry:
- no. 1 worldwide in fresh dairy products
- no. 1 worldwide equally placed in bottled water (by volume)
- no. 2 worldwide in biscuits and cereal products
The main reason why Danone Group can be considered as a leader in the food industry is because this company has never stopped working to bring to its customers better products, more varied flavours and much healthier pleasures.
Danone's strategy, based on its corporate philosophy, is specially focused on the growth of its shares by taking in account the following criteria: * favoring the profitable growth of the business account, which is essential in this type of industry. * privileging the operative margin and the profitability of investments. * accomplishing human and social policies, which assures a part of the company's success.
In order to reach its objectives, it is essential to develop a company's global vision and to defend its core values:
Openness
"Diversity is a source of wealth and change a constant opportunity."
*Curiosity: Characterises an attitude of awareness and looking ahead, of being attuned to others, refusing to accept preconceived ideas and models, and imagination.
*Agility: Synonymous with vitality, energy, speed, flexibility and adaptability.
*Simplicity: Embodied in a management style that favours informality over formality and pragmatism over theory.
Enthusiasm
"There are no limits...only obstacles to be overcome." * Boldness: As opposed to bureaucratic security. It symbolises the desire and capacity to take risks and explore new, unorthodox paths. It also implies the ability to endure and overcome failure.
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* Passion: Synonymous with conviction, a drive to convince and lead, the pleasure of work, the ability to surpass oneself and achieve excellence.

* Appetite for challenge : Characterised by the optimistic, enthusiastic and almost physical desire to grow and take the lead.
Humanism
"The attention paid to individuals, whether they be consumers, employees or citizens, is at the heart of all our decisions." * Sharing: An approach that emphasises dialogue, transparency and teamwork * Responsibility: DANONE pays attention to the safety of people and products, acts pro-socially and is environmentally friendly. * Respect of the other: DANONE is sensitive to cultural differences, treats social and commercial partners with respect, and makes its easier to its partners to develop.

. Proximity
"Know how to stay close to each person in the world: colleagues, consumers and clients, suppliers, stockholders and society, become a part of their everyday lives."
Internally, these values are the basis of their management principles. Externally, they exist in the attention Danone pays to the health of their consumers, to the quality and taste of our products, to the environment and to society as a whole.

3. Company's resources. Value-added chain analysis

Balance Sheet
Danone's strategy is designed to differentiate its products from the competitors. The strategy based on differentiation is to create a good perceived as a premium by the customer, to create loyalty to the brand and therefore low price sensitivity. Danone want to do that through the quality, the healthy and the real taste of its products. But also through the creativity, the innovation and the customer's service. This company makes huge investments in R & D in order to give responses to the market demands. The quality of the raw materials is high in order to make the most quality products. Furthermore Danone offers detailed information of its products and the company so the customer feels more acknowledged when he makes the achievement.
A good example of this is Vitalinea's product. Danone intends to make quality yogurts which arrive to consumer's houses with the freshness and flavor they deserve but with the lowest calories in order to maintain their weight.
In order to achieve this differentiation Danone implements a strategy all through the company.
To understand how Danone give value-added to its products, we must realize the value-added chain analysis.
This method helps to understand the part of the company's operations that create value and those that do not. It shows how a product moves from the raw materials stage to the final customers.
In this analysis, the company's value chain is segmented into two main parts:

Primary Activities * Inbound logistics: Superior handling of incoming raw materials to minimize damage and improve the quality of the yogurt. Danone makes its yogurts with fresh products and the best ferments in order to improve the quality of its products. * Operations: Consistent manufacturing of attractive products and rapid responses to customers unique manufacturing specifications. The yogurt's packing is ideally designed to protect and maintain the quality of the yogurt. Furthermore the label of the product is designed to attract the consumers, to give the maximum information about the Danone's product. * Outbound logistics: Rapid and timely product delivery to customers. Thanks to its daily production, Danone, is able to satisfy customer demands at any time. * Marketing and sales: There is a strong coordination among functions in R & D, Marketing and product development. Danone’s corporation believes that the product innovation is the key of success. Therefore the Danone's Institute is the one in charge of create new products and adapt the existing ones to the changes of consumer tastes in order to make them better. The marketing and sales department is the one who looks for those changes in consumer tastes, the one who look for new potential products and require it to the Danone's institute. * Service: Danone has a client telephone service that give responses to consumer doubts and to attend its opinions. Furthermore he has created another phone and e-mail service for the customers which desires to have healthy feeding habits and have some doubts about that.

Secondary activities * Infrastructure: Highly developed information systems to better understood customer's purchasing preferences. Danone implement several systems to better understand the customer such as: phone interviews, focused groups, market research * Human Resources: Danone has compensation programs intended to encourage worker creativity and productivity. * Research and Development: Danone makes investments in technologies that will allow them to consistently produce highly differentiated products. * Purchases: Danone has some systems and procedures used to find the highest quality raw materials.

4. Communication policy

The Danone Group is convinced that a management approach which is based on proximity and social dialogue is a source of employee commitment and company efficiency. * Main levers:
Develop communication which allows each person to understand its results and the business issues facing the company, in order to enable people to project themselves into the future.
Encourage proximity management based on listening and participation. This style of management should be apparent at all times, both on an every day basis and when the company goes through major change.
Ensure that the different legal and conventional representative bodies work well within the company. Encourage the sharing of information, dialogue and negotiation.
Promote a policy of social dialogue at the European and international levels within the framework of the Information and Consultation Committee and the signing of joint statements.

5. Pricing policy

In order to establish the price of a product, we should take in account both the cost per unit of the product and the price that consumers would be willing to pay. That way, the price will suit the market.
There are other factors which have an influence when establishing the price. These are such as the legal framework and the company's objectives, the competitors and stakeholders and the market itself.
Perceived value method is the one used by Danone. As it is difficult to know about consumer perception on prices, the company analyses the market and combines it with the mark-up pricing method, which means to apply a percentage on the total cost per unit.
After the analysis, I believe that Danone should rise a little its prices to cope with its prestige so differentiation is essential, but not so much because it is a dairy product. 6. Competitive analysis. Porter's five forces model

a. Threat of entrants
It is quite difficult to enter the yoghurt industry because Danone has most of the market shares and that makes it hard to make up a new brand. It would mean spending lots of money to arrive to a good position. b. Power of suppliers
In this case the power of suppliers is exclusively related to Danone because it has more than the half of the market share and this provides a lot of power for taking decisions about price and makes it easier to invest in new yoghurts and desserts. c. Threat of Product substitutes
Product substitutes are not a huge threat. The substitutes for fat-low yoghurts (Vitalínea) are other fat-low yogurts which lack brand loyalty or whose prestige is not that big. d. Power of buyers
Buyers are the key element in order to know if the product is working or not in the market. In this case Vitalínea's main target are consumers who wants to take a tasty dessert but low-fat. Danone with this product achieves it. Vitalinea is a tasty dessert with almost 0% fat. e. Intensity of rivalry among competitors
The real intense rivalry among competitors happens between little companies. As Danone represents more than the half of the market shares, this doesn't occur at that level. Companies like Grupo Kalise, La Fageda, or Feiraco have intense rivalry as they have to compete between them to reach their objectives.

7. Conclusion The market for yoghurt is constantly growing and offers a huge range of opportunities for creating new products adapted to consumers' swinging tastes.
Danone's perfectly structured organization is an example for all those multinational companies which would like to enter the market with such a big success as Danone.
Thanks to the Danone Institute, a pioneering project, it is one of the companies which invests the most in R&D.
I consider that this is the way to maintain its position as a market leader and our advice is to keep investing in R&D, training employees and awarding creativity and entrepreneurship. Hiring risk- seeking new talents could be challenging for Danone too. As a prove of Danone' s great philosophy, the group has been ranked in 2005 number one as the best company to work for.

8. References

https://www.wizness.com/wizness/go.asp?u=/pub/NP&nId=555&lngWiz=EN http://www.danone.com/en/for-you/candidates/growing-in-danone/jobs-careers/detail/muid/communication/#.U25ipvl_uYE http://www.danone.com/ http://www.danone.com/en/publications/#.U25jFfl_uYE http://www.danone.com/en/for-you/candidates/growing-in-danone/jobs-careers/detail/muid/research-development/#.U25jjPl_uYE