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Ramya PENMATSA
Ramya.penmatsa@ieseg.fr
DANONE COMPANY ANALYSIS
STRATEGIC MANAGEMENT INDIVIDUAL INTEGRATIVE PROJECT
IMBA-2020/2021
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Table of Contents
1. About Danone ...........................................................................................................3
2. Methodical and Analytical Approach .........................................................................4
3. Major Findings ..........................................................................................................4
4. Report Analysis .........................................................................................................4
5. Financial Statement Analysis .....................................................................................7
5.1. Trend Analysis .................................................................................................................................. 7
5.2. Ratios and ROE Decomposition........................................................................................................ 9
5.3. Commentary on 2020 YTD sales performance and financial strategy...........................................10
6. External and Internal Analysis ................................................................................. 10
6.1. External Environment ....................................................................................................................10
6.2. The internal environment ..............................................................................................................17
7. Scenario Analysis .................................................................................................... 22
8. Conclusions and recommendations .......................................................................... 25
9. References .............................................................................................................. 25
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1. About Danone
Danone is a multinational food-products corporation headquartered in Paris, France and
founded in Barcelona, Spain. Danone is a 100 years old company founded in 1919 making
yogurt to help children and intestinal infections, referring from Pasteur Institute. In the year
1920, Danone has sold its first yogurt in Barcelona pharmacies eventually expanded to
grocery stores. Danone is known for its original purpose, delicious products tailored to the
nutritional needs, selling healthy and eating habits of our consumers.
Danone is built on four business lines: Essential Dairy and Plant-Based Products, Early Life
Nutrition, Waters and Medical Nutrition. It has more than 100,000 employees, consumers,
suppliers, shareholders and all the communities it engages in.
Firm has products in 130 markets and generated sales of approximately €25.3 billion in 2019
whose portfolio of products include international brands (Activia, Actimel, Alpro, Danette,
Danonino, Danio, evian, Volvic, Nutrilon/Aptamil, Nutricia) and local brands (Aqua, Blédina,
Cow & Gate, Bonafont, Horizon Organic, Mizone, Oikos, Prostokvashino, Silk, Vega). These
products are created with a mission of bringing sustainable living to as many people as
possible [17].
Danone engages with its customers by providing healthy and nutritional food choices with a
strong presence in Europe, United States and China. Danone has a vision of being
completely B-Corp certified company by 2025, currently 28 entities of the firm are B-Corp
certified. The CEO & Chairman, Emmanuel Faber has wide vision of making the company
both economically and socially connected to be better contributor to the nature and
society. As part of this they came up with the slogan “ONE PLANET. ONE HEALTH”. Danone
by 2030 has a future plan of following categories: [15].
• Superior food choices and innovation
• Sustainable profitable growth
• Certified B CORP firm 100%
• Grow Manifesto Brands
• Preserve planets resources
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2. Methodical and Analytical Approach
This section outlines multiple frameworks and approaches used to analyze the company.
These frameworks have been explained in the relevant sections of the document. About
report generation, financial and other data has been extracted from annual reports of the
company from 2016-2020 [19,20]. In this process there are several case studies and
business articles taken as reference and used in the study.
Academically learnt and discovered frameworks were used for analyzing factors that
influence FMCG industry, political, economic, social, Business and Corporate strategy,
Financial data [20,21].
3. Major Findings
This section identifies the overall finding of the analysis. Each theory has been stated with
the detailed information in their respective categories of the document. Danone is a giant
corporation which ranks high in the market in terms reputation and brand value all over the
world. Haven’t said that company’s growth is slow over the past few years, this is stating
that company’s profit investments are on providing sustaining products with health and
nutrient values which requires huge research and development labs, technological units,
nutrient compositions & new products innovations.
Company is driving towards sustainable & Healthy practices by obtaining clean certificate
for its products from B Corp.
4. Report Analysis
This report emphasizes on the strategies implemented by Danone Europe. To be specific,
the report will discuss the success factors of Danone in relation to external and internal
strengths, that has resulted in strategic fit. Marking 100 years in the industry, Danone has
come a long way fulfilling in ‘One Planet. One Health’ vision. The Firm is built on four
business lines: Essential Diary & Plant-Based Products, Waters, Medical Nutrition & Early Life
Nutrition.
Danone being one of world’s best fast-moving consumer goods (FMCG) companies, the
revenue has grown regardless of factors (pandemic, currency fluctuation, change in
Consumer habits, digital compétition, etc.). Consumer goods are those with short shelf life
because they are perishable (meat, Dairy etc.) and with high demand. The consumer goods
are one that gets sold in large numbers within less time, they have high turnover when they
are on the shelf at the store.
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With the products in 130 markets, and had sales of €25.3 billion in 2019, aims at achieving
health through food, to as many people as possible, in a sustainable way.
The figure shows the top 10 European FMCG companies by sales, in which Nestle, P&G,
Unilever are the biggest competitors for Danone. This report will investigate about, the
series of strategic choices that are profitable for Danone [1].
Danone consists of products, that are highly focused on Nutrition and Health Values. The
below figure describes the percentage of its products categorized into and volumes sold in
the years 2016 & 2018 [2,3].
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Thus, the objective of this report is to identify, how company’s strategic choices has led to a
match between external and internal analysis which has improved its Profits and staying
close to its Vision. This analysis is performed using set of frameworks that best suits, for
external environment (Porter’s Five Forces and PESTEL), internal environment its “Corporate
Strategy”, “Business Strategy (cost analysis)” and VRIN. In order to support my contend,
references are from, Danone’s annual reports, specific data published in articles and media,
Financial reports, Industry reports and pragmatic research.
The strategic report is organized as the following: Section 2, Danone’s External and Internal
Environment Analysis. Section 3, In continuation with Corporate strategy and company’s
business, Section 4, ends with managerial recommendations and conclusions.
5. Financial Statement Analysis
