Danone follows a principle that does not share all of their activities with the external market.
This creates barriers for new entrants or costs disadvantages for existing ones. Through
improved forecasting of demand and sales, they improve the flow of products and materials.
Also, through tracking activities, minimise delays and maintain good inventory management.
Porter’s value chain analysis:
Danone focuses on value creation through differentiation of products. They want to provide
quality, healthy, and real-tasting products. They have a low-price sensitivity and prefer to
position themselves as loyal and premium brands. They increase customer value through
innovation and creativity. As they are mainly focused on the quality of their product, they
invest a lot in raw materials. They also make everything transparent so customers can access
all the details of the product and brand easily. Also, Danone believes in continuous
improvement. So, they invest a high amount in research and development also. An example
of Danone’s quality service is their quality yogurt. They make it a low-calorie product to
make it healthy.
In value chain analysis, companies divide their operations into multiple categories according
to their products. Danone divided its activities into primary and secondary. Primary activities
include operations, inbound and outbound logistics, marketing and sales, and service. These
are high-value-creating activities. In the secondary, they included infrastructure, human
resources, research and development, and purchase. These are less value-creating activities
compared to primary.
Primary activities:
1. Inbound logistics: As Danone focuses on high quality products, one of the primary
focus areas must be on the quality of raw materials and their handling. They try to
reduce damage to as little as possible and make the product as durable as possible. As
the product is yogurt, its freshness and taste are very important.
2. Operations: These include manufacturing, packing, and labelling of information.
Based on customer requirements, rapid production both attractively and with quality
is the goal. Because Danone’s products are perishable, packing is important. The
packing needs to ensure durability and must prevent damage. And the label outside
the package must contain sufficient information about the product and be attractive.
Danone’s way of making everything transparent means they provide as much
information as possible outside the package.
3. Outbound logistics: It is a timely response and delivery. To provide yogurt with
quality, timely delivery is important. As time consumption increases, quality also
decreases.
4. Marketing and sales: They are in charge of researching customer tastes and
preferences. They work hand in hand with the research and development team.
Danone’s institute creates new products and makes changes to the existing ones also.
Their theory is that continuous improvement leads to success, so they are focusing on
it.
5. Service: To clarify customers' doubts, Danone arranges telephone and email customer
service options. They believe in the depth of customer interaction. As our bond grows
stronger, so does our loyalty. Customer satisfaction is the main goal of Danone.
Secondary activities:
1. Infrastructure: It focuses on customer interaction and accesses information from them
for product improvement. Through phone calls, interviews, and focussed group
market research, they know customers' preferences.
2. Human resources: to improve workers' creativity, efficiency, and productivity Danone
implements incentive plans.
3. Research and development: Based on customer preferences and taste, they produce
new items. For this, technology development is necessary, so they invest a high
amount in technology development.
4. Purchases: To make the product loyal and of superior quality, the purchase of quality
raw materials is important.
Danone classified their products into 3 categories: For children, healthy products, and diet
products.
Danone has had its own logistics distribution network since 1996 for selling and procurement
both locally and internationally. As the product is perishable, it needs special care in transport
and storage. Temperature-controlled storage and transport are crucial. So, Danone is giving
special attention to that. That is why they are maintaining their own logistics networks.
Distribution of products takes place through major retail chains and traditional commercial
points of sale. Traditional commerce is still used in emerging markets. To reduce costs, they
are looking for efficient logistics.
The future is looking at sustainable development. Their nine goals for 2030 are all based on
sustainability. They want to achieve success through empowering partners and employees.
They want to achieve a carbon neutral value chain before 2050.
