Danone Case Preparation

5 C Analysis
Needs
- What needs
does the
product
fulfill?
- How does it
help build
their
identities?
Decision making
process

Demographic
Economic

Problem recognition: there is a gap in the

market, health and body conscious females
want a new drink that is uniquely balanced by
naturalness, flavour/pleasure and with clear
diet
- Information search: what media, sources of
information do consumers use? Opinion leader?
- Evaluation of alternatives: which attributes or
features of the product are most important to
consumers? how do consumers weight the
importance of different attributes
- Purchase decision: what physical situational
factors affect consumer decisions most, how is
their purchase experience like
- Post purchase evaluation: satisfied? How they
access good after
Context (external factors)
-

Socio cultural

Political/legal

Customer
80% want it cheap, moderately priced
Health and fitness is a very strong need among
feamles
Need to look good and feel good
Identity: sports and fitness, healthy, selling the
image of the trim and fit girl

Poor economy in 2001 fueled emergence of Bbrand beverages this is probably cyclical
rather than structural (case written in 2010
where economy rebounded)
Product can be considered a luxury because it
is not a necessity even though substitutability
is low
fashion and taste: consumption growth after
2001 due to concern over health, fitness and
search for natural food
Overall soft drink consumption has decreased,
with powdered juices being the only one that
increased
Water products perceived as higher quality
than soft drinks in general
Increased safety concerns regarding running
water and improved legal conditions

Technological

Nutritional information is more readily doublechecked/available on the internet for concerned

consumers availability of such health
information will affect the ways that consumer

Danone Case Preparation

Natural

shop as they are easily able to compare

products based on personal benchmarks
Proliferation of social media/influencers can
affect advertising strategies
Emergence of new water-producing
technologies (unimportant as target audience
going for natural products, not reverse
osmosis)
Water sources: are they running dry? Impacted
by climate change with differing affects
depending on the region of Argentina in
question. A declining trend in precipitation may
be observed, stress on water availability and
quality has been documented where lower
precipitation and/or higher temperatures occur.
For example, droughts related to La Nia create
severe restrictions for water supply and
irrigation demands in central western
Argentina. Additionally, glaciers in Latin
America have receded dramatically in the past
decades, and many of them have disappeared
completely. Long term concerns that water
availability and hydropower generation will be
affected
Plastic bottles have a adverse impact on the
environment
Glass bottles are more environmentally friendly
and can look classier in line with healthy,
natural image if environmentally friendly, in
line with companys goal of improving
collective wellbeing

Business model

Competitive
strategy

Competitive
advantage
analysis

Company
how does it make money: acquire brands with
global/national scope in its bid of global
strategy
Compete by high quality products
Compete by good/premium quality/all natural
water with health benefits from pure sources
Companys genuine interest in creating
individual and collective wellbeing
Compete with image as health promoter? Low
cost low price, unique superioir, small segment
niche market, superior performance in some
attributes. Is strateygy easuly replicable?
45% share in bottle water industry
Both acquired brands Villa del Sur and
Villavicencio are leading mineral water
MANUFACTURERS
o Technology and expertise
Sustainable? Area unmatched by competition.
Cost advantage in manufacturing

Danone Case Preparation

-

Collaborators

Complementors

Product
competition

Existing relationship with logistics network

operator and supply chain network
- Marketing advantages (?)
- Established brand with brand equity value
- R&D? Core competencies
Collaborators and Complementors
- 2 production plants
- High reliance on two logistic network operators
- who helps firm market products
o Distribution centers at ADA factories that
were managed by another modern
distributor center located in Argentinas
capital city
- Relationship with plastic bottle producers
- Health foods like fat free crackers, fitness
- Plastic/glass bottle producers relationship will
not be affected
Competitors
Soft drinks (Coca cola, 7UP)
Other water brands
RTD Juices, powdered juices

Danone Case Preparation

PORTERS 5 FORCES
1) Industry competitors
a. Many different companies and drink products
b. Nestle, UNILEVER
2) Potential entrants
a. Market is saturated with both B-brands and international
brands
b. High costs of entry: water sourcing/manufacturing facilities,
3) Availability of substitutes
a. Yes, but they are not perfect subtitutes
b. If Danone is appealing to a niche market (selling a lifestyle,
not just the drink), then its new product will unlikely be
substitutable given it is filling a current market gap
c. However, in the broader sense, Pinta might seem like JUST
ANOTHER BEVERAGE
4) Buyer Power
a. End consumers high power, low switching costs also due
to poor economy, food and beverages would be a large
proportion of income and and buyers will be price sensitive,
switch to cheaper alternatives
b. Middle consumers e.g. retailers like hypermarts have high
buyer power as well because they are able to affect shelving
decisions
5) Supplier Power
a. Bottles: high
b. Water: Self-produced, low
c.
6)

Danone Case Preparation

SWOT ANALYSIS
Internal Strength
- Experience and economies of scale from various acquired brands
- Strong customer base and high market share
- Strong existing brand awareness and equity
Internal Weakness
- Brand confusion (merging both Ser and Villa del Sur)
- Might be overly focused on female market, marginalizing male
population
External threat
- Falling demand for water products
- Economic instability and increased populatons going below the
poverty line
External Opportunities
- Changes in lifestyle: demand for fitness (structural force that will
drive demand for danone)

Danone Case Preparation

A* Talk
- Research should contribute to manufacturing sector
- Funded in 5 year trenches
o Talent, economic outcome, support tech commercialization,
future innovation what can we do for commercialsisation?
o 2 sector
science and research
BMRC
- Capture economic vLUE VIA INTELLECTUAL AND HUMAN CAPITAL
FROM NBASIC AND APPLIED RESEARCH
- Integrative programmes across core capabilities
o Consumer car technology, (mature, ready for
commercialization)
P&G, Clarin
o sensors and transducers (mature, ready for
commercialization)
Materials at molecular level, sensing of noise in HDB,
structural faults in airplanes etc
- Economic factors one of the biggest barriers
IMRE
Materials Centre of Innovation Translating solutions into business
- Collaboration between IMRE and SPRING
- SPRING: help sg enterprices grow, SME sector
o Centres of Innovation
- Materials Innovation: bring new functions and add value to
products/ using existing materials in a new way
- INNOVENT: design thinking workshop
- MCOI: Translate materials technologies and solutions
o Materials benefit application, enhance user experience
o Interact with designers
How do we let material properties inspire a
use/application
- 4 application areas
o healthcare and wellness
o sensors and diagnostics
o consumer and lifestyle (protecker, pH facemask- potential for
licensing? Opportunities to integrate new technologies into
facemask. Why pH? Why not something else? Isit better to
deliver a solition to a certain problem? Isit dry skin, pimple,
pigmentation? What do people usually use masks for? Can
uou have multiple purpose, multiple zone? Room for
expansion, can the scope be wider?) 3 months: what is the
question you are trying to answer?
o energy and environment
-

Do more secondary research

o Industry and market research
o Look for sweet spots for market opportunities
o Pick out 3 interviews per person

Danone Case Preparation

CE ADVOCATE- Lee chuan
- Company: Looking for market partners
- Consumer: market is small
- Competition: no local ebook for braille, not producing due to some
other reasons? Other physical braille books
- Collaborators:
Porters
- Competitive: fight conventional way e.g. audio softwares tht read
out internet
- Threat of new entry: depends on IP right
- Buyer power:
- Real threat of substitution
SWOT
- Strength: first mover, strong A*backing
- Opportunities: Gov increasing funding, small market need to go
regional
- Weakness: Yet to be mass produced and tested
- No financially viable model
- Threat: Easily replaced
Implications: target to become indisposable product
Porters: social media is significant force, 3 new forces: digitalistion,
globalisayion, deregulation

Librarian session
1) Market research database: Passport (Euromonitor) consumer
based
2) Secondary: Analysing of some source of data, if data is not original
= secondary source
3) Company website is primary, news article is secondary
a. Secondary sources of infomraton back your primary sources
4) Academic sources: business soruce premier
5) Market research reports: Frost and Sullivan (more high tech based
than Passport)
6) News database Factiva
7) Research reports are dated even if they date 2014, take long time
to collect data
8) If company is in SG, MUST do Factiva search for both company and
market
9) Only way to determine biases is to compare
Email: kahwei@nus.edu.sg for an advisory session