Strategy Implementation in an International Food and Beverage Company - Case Study Example

Danone: strategy implementation in an international food and beverage company Danone group of companies is a multinational organization based in Paris France which manufactures and sells dairy, nutrition, cereal and refreshment products in Europe and across the world. Since its establishment, the company has made significant strides in the international food and beverage market controlling a significant portion of the Asian, European and American market. The era of Frank Riboud as the chief executive has been marked by significant strategic developments and implementations that have enabled the company to grow despite the current competition in the international frontier (Spulber, n.d.). One of the strategic plans adopted by the company under the leadership of Frank is market control and dominance that has enabled the company’s presence to be felt in different parts of the world. In line with this strategy, the company has been involved in a number of partnerships and mergers with different food companies in different parts of the world. In 2007, the company entered into partnership with Kraft Company to market its products especially the biscuits. This partnership enabled the company to make significant inroads into different markets in Europe (Matthew, 2006). In the same year also witnessed the opening of new markets for its baby and clinical nutrition products when it entered into a marketing partnership with Numico, a Dutch based company. Frank relates their acquisition strategic plan to the significant increase in sales that the company has enjoyed especially in 2012. The transformation of the company’s geographical profile and areas that it continues to lay emphasis in has also resulted into changes in its market shape. Frank confirms that currently, majority of their sales come from different parts of Europe and this accounts for 40%. The company is also targeting emerging markets and making inroads into such markets through a number of initiatives that target the foreign markets (Matthew, 2006). The food industry has revolutionized from being a regional based industry into one that operates in the international markets and which faces stiff competition from other players in the global arena. Today, food and beverage products from different multinationals including Danone are shipped to global markets. The prices of such products are determined by the global market demand and supply and such determines the strategies adopted by these multinationals. Operations within the global arena have a number of benefits to a business that holds significant potential in the success of such organizations. It creates new market and niche for the companies as they venture into new regions thus increasing a company’s international presence (Spulber, n.d.). Global market operation also increases the publicity and dominance of a company’s brand that increasing recognition and acceptance across different regions in the globe. Cross border integration as practiced by Danone has opened up new markets for its products in different regions including the Dutch markets. As most of these products target nutritional and clinical markets, Danone has been enabled to increase its services to different parts of Europe. However, a slight variation may exist between the receptions that the four products produced and marketed by the company may receive in the global market (Tao & Hillier, 2008). Fresh dairy products and water has met stiff competition in the international market from other companies that specialize in similar goods within the global markets. However, the baby and medical nutrition products marketed by the company have received a much different reception due to the strategy the company has adopted in the global market. For example, while introducing the products in Netherlands, the company used Numico, a Dutch based FMCG company to introduce its products into the market (Consoli & Neves, 2004). In order to continue with its dominance in the food and beverage industry, Danone has continued to implement different programs that have enhanced its competitive advantage. The company’s innovative spirit has enabled it to remain a strong force in the market with significant control over other market players. Innovation within the dairy sector has enabled the company to continue delivering superior products with significant nutritional benefits. This has enabled it to hold onto a large share of both the domestic and global markets despite the high competitions. Riboud’s leadership skills and abilities have enabled this French based food and Beverage Company to remain a major market player with strong competitive advantage. He appreciates the role played all the employees and adopts an employee participatory approach to ensure that all the business programs adopted by the organization are accepted across the board (Rodrigues & Baker, 2012). The management and organizational structure of Danone has enabled the company to remain a major force in the local European market. The company created the strategic committee which has been at the forefront in the development of newer strategic approaches aimed t tackling competition within the market. With the help of the executive committee, the company organizes regular reviews of target markets to identify specific markets and companies for strategic partnership, an approach that has enabled it to cement its control in the market (Ghalib, Hossain & Arun, 2009). The current growth of the company demonstrates the benefits of the corporate and marketing strategies that the company has adopted this far. Currently, Danone control major markets and deserves to increase its focus on the emerging global markets for its global plan to make any successful inroads in the international arena. Pursuing new products will serve to divert the attention of the company from its core business products (Zhang & Deusen, 2010). The company should therefore focus on the four lines that it has perfected and seek to introduce new products under the four lines. Despite the disadvantages attributed to centralized management approach, this system has worked well for the company and its environmental and social strategy has enabled its presence in the market to increase. The company should therefore maintain this management approach as it tries to integrate new approaches without eliminating the current structure (Yunus & Ortega, 2010). References Consoli, A. & Neves, F. (2004). Building ‘door to door’ marketing channels: the Danone project. University of Sao Paulo. Ghalib, A., Hossain, F. & Arun, T. (2009). Social responsibility, business strategy and development: The case of Grameen-Danone foods limited. Australian accounting business and finance journal, 3(3), 1-14. Matthew, G. (2006, August 1). The MT interview: Frank Riboud. Retrieved from http://www.managementtoday.co.uk/news/575823/ Rodrigues, J. & Baker, G. (2012). Grameen Danone foods limited. International food and agribusiness management review, 15(1), 127-158. Spulber. (n.d.). Global competitive strategy. Cambridge University Press. Tao, J., & Hillier, E. (2008, May). A tale of two companies. China Business Review, pp. 44-47. Yunus, M. & Ortega, L. (2010). Building social business models: Lessons from the Grameen experience. Long range planning, 43, 308-325. Zhang, P. & Deusen, C. (2010). French Danone and Chinese Wahaha: Yet another example of an unsuccessful international joint venture. International business, 4(1), 82-100. Read More