Danone SWOT and PESTLE Analysis

The SWOT / TOWS analysis is a strategic planning tool that helps assess the internal and external factors which influence the company’s micro and macro environment. SWOT analysis is a useful technique to analyze the present strength, weakness, opportunity, and threats alongside their impact on the current business model of the Danone group.

Danone is the global leader in domains like the dairy products and bottled waters. It ranks number #2 in the baby food segment. Danone’s target group of audiences is the urban families belonging to middle and/ or upper-middle class. The company strives to be globally recognized as a brand that provides healthy products of supreme quality. Danone operates in 4 prominent domains with market share distribution in 2015as follows - 50% in dairy products, 21% in waters, 22% in early life nutrition and 7% in medical nutrition. The board portfolio of products is a major strength of the Danone group. Apart from this, the company is known for strengths like supreme quality, healthy food products, a strong employee base of 100,000+, global leader in dairy products, pioneer in introducing healthy yogurt, strong financial muscle and these also lend a competitive advantage to Danone

Danone has the highest market share in the dairy segment but increasing raw material cost is leading to a rise in the cost of end products, affecting the overall revenue and dropping of sales. The company’s high dependency on the Asian market (Especially China and India) is another weakness, as the demand for costly Danone products is declining in these markets. There is a huge opportunity for the expansion of the Danone company in markets with emerging economies, in western countries. People are preferring Greek yogurt over the regular one and are shifting towards healthier options, hence sales are expected to grow in future. Acquisition and mergers, extension of new products and expansion in market share in developing countries can act as some great opportunities for Danone’s growth. Increase in raw material cost, competition from global players of food and beverage industry, and cheap alternatives from local suppliers are some of the major threats to the Danone group

The SWOT analysis of Danone is presented below in a nutshell followed by the detailed analysis.

SWOT & PESTLE (combined)
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Detailed SWOT Analysis of Danone

The PESTLE / STEEPL / PEST analysis report is a framework used to understand the impact of external factors on the macro environment that influences the business of Danone. The PESTLE analysis is a useful technique to analyze the present external factors like political, economic, social, technological, legal and environmental and their effect on Danone’s business model, growth trajectory, its business case, and market strategy.

By far, the political factors that are conceivably affecting the Danone company are the laws passed by the French government in 2005 to safeguard the minority shareholders. Government’s elevated interest for public’s health has positively contributed towards hiking Danone’s sales. Nations are having in place stringent regulations for food safety and changes in taxation policy due to the global crisis. Economic stability has enhanced the demand of high-quality food products amidst audiences with standard living. A decline in the supply of plastic can affect the packaging cost, especially in the beverage segment. High-level biotechnology is employed to improve the nutritive value of products, enhancement of proteins and vitamins in dietary supplements. These technological factors give an edge to Danone over its competitors as it is the oldest in the industry utilizing these factors for over a century. Danone’s vision of “One planet, One health” is creating a social impact and is being appreciated and promoted worldwide. People’s transition to better living and embracing healthier options will not only bring in sales but make Danone a global leader with a health focused portfolio in the food and beverage sectors. A major environmental issue is the scarcity of drinking water worldwide. this will have a positive impact by increasing sales in Danone waters division. The legal dispute between Danone and the Hangzhou Wahaha Group, regarding the Wahaha joint venture, has adversely affected the beverage sales in the Asia-Pacific region.

The PESTLE/ PESTEL/ STEEPL analysis of Danone is presented in the matrix below followed by the detailed analysis:

SWOT & PESTLE (combined)
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Detailed Pestle Analysis of Danone

• The SWOT and PESTLE analysis report of Danone presents an understanding of the complex internal and external factors affecting the brand and its operations
• Core competitive advantages relished by Danone over its rivals and competitors from the Food and beverage industry
• A brief overview of Danone’s business profile, number of employees, owners & stakeholders and revenue jumps
• Overall company analysis to gain acquaintance about company information, company profile, business model, business plans and marketing strategy
• Study of Danone’s USP or unique selling proposition, mission statement and vision statement that has made it a global leader in the food and beverage industry
• The SWOT Analysis framework facilitates the company to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats
• Intelligence on Danone's share price, mergers and acquisitions, strategic partnerships and alliances which will state details about the synergy achieved and how these acquisitions contributed to the growth of the Company.
• Utilizing PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors namely, political, economic, social, technological, legal and environmental and highlighting their influence on the performance of Danone group
• Understanding of how Danone has leveraged the strength of technology and supply chain management to keep competition at bay.
• A peek into the Danone’s key performance indicators, success factors, value proposition and core competencies
• Danone’s case study which gives intelligence into Danone's business model and how it manages to outstand competition.
• Insights about micro and macro factors through internal and external analysis