Danone Case Study

UNITAR International University – Graduate School Knowledge Management: Case Study 4 Group: Shirley & Fadli

Executive Summary

Danone was established by Isaac Carasso, a Greek doctor who was the first person to perfect an industrial process for making yogurt, in 1919. Since 1920s, Danone had been using using merger and acquisition strategy strategy to enter new new markets throughout Europe. By 1970s, Danone had acquired various types of business ranging from cheese, pasta, ready meals, fresh packaged food, beer, mineral mineral waters, and even baby food. Noticing the on-going trend, CEO Riboud decided to shift the company direction towards towards food products. As a result, he sold the entire non-food assets and focused his acquisition acquisition on food products only. Riboud continued to build on his father’s father’s vision of dual social and economic goals. He seeks to bring health through nutrition to people around the world. In 2008, Danone planned to reorganize into four business lines: fresh dairy products, water and beverages baby food, and clinical nutrition.

In 2006, Danone was the global leaders in fresh dairy products. Their beverage business line was tied with with Swiss packaged food company, Nestle. Danone was only second to American food company, Kraft food, in their biscuits and cereal product line.

Currently, Danone utilises decentralization decentralization strategy to keep close relationship with their their customers. This strategy does not only allow them to access their customers’ needs, but it also gives them an express channel to react quickly to dynamic market demand. Internally, they also utilise Knowledge Management program in which help them leverage their company’s talent talent via their Networking Attitude program – – the program in which the employees are sharing good practices and ideas with their their peers. Recently, the Networking Attitude program had been extended to their suppliers and customers as well.

With the success of their Networking Attitude program, Danone would like to expand the program further; however, they are on the crossroad whether they should extend their program deeper in terms of more employees participating; wider in terms of expanding it outside the company; or richer in terms of focusing on the innovation. After careful consideration, we recommend recommend Danone to extend the concept deeper and richer. Deeper because the more employees participating in the networking program, the better the communication within the organization, which in terns terns will increase business business performance and efficiency. This way, it also increases increases the pg. 1

Global Knowledge Management at Danone (A) (Abridged)


management involvement. We also suggest richer because not only it will help reduce the cost of Research and Development department, it will promote the sense of unity within the organization and help their employees keeping active. With richer dimension of the program, Danone will be able to come up with a new product faster and more effective than their competitors, and this will become their edge and one of their competitive advantages.

Issues in Danone

Danone is identified as a French multinational company that is based in Paris and specializes in food products. The company prides itself as a world leader in fresh dairy products. Danone focused on networking attitude in 2002. The introduction of networking attitude aimed to make sure that the firm can share good practices and circulate information with each other. The main issue in Danone is to determine the impact of networking to the company. A minimal issue in Danone is to determine why some of its divisions are behind in terms of innovation and networking.

Importance of key issues

The key issues helps in understanding how networking has helped Danone. The key issues helps in determining the reasons for the current stature of the firm. The key issues helps in uncovering the probable strategies that Danone can use to make full use of networking and relative technology.

Key stakeholders

The main stakeholders are Mougin and Benenati. The solution of the issues will make their job easier and will give them more time to address the other issues of the firm. The solution of the key issues will give them more time to create better strategies for the company. Other stakeholders are the employees of the firm. The employees are the ones that usually use networking. A better understanding of the networking technology would help them persevere more and it will motivate them to make full use of such technology.

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Question

1.

What are the most important knowledge-management challenges faced by Danone? What does the company need to do well to succeed? As one of the top worldwide top company, Danone greatest challenges encountered in the implementation of knowledge-management employees that scattered in 120 countries, and therefore they faced the following three problems: 

Making operational information to their employees around the world.



A tension between a more efficient top- down approach and local managers’ desire for autonomy.



The role of information technology in managing knowledge Local Markets.

There is a managing director as a decision-maker who is in charge of an activity in a country. However, headquarters could only give the options to managing director to decide something, but cannot impose conditions. This brings more disadvantages than advantages in looking for synergies to a group. Decentralization is essential to Danone’s strategy. It gave Danone more competence, attached to consumers and always ahead among its competitors because their frontline manager can execute quickly. The Human Connection Most Danone employees did not use traditional knowledge that used technology, uploading files or building databases. They felt more comfortable talking to each other. This way, Danone was changing the method and looking deeper to behavioral patterns and increasing interaction between people. What does the company need to do well to succeed? The company needs to make a review and re-introduce the networking concept to their employees. This way, the company could find out what are they lacking of. And also it can make better specificity of networking technology. The company can make the employees more understand what the purpose and what it can be used by reintroducing the networking image. And the company can give more affirmation with the advantages of networking system.

2.

What is your assessment of the Networking Attitude initiative? There are 5 tools in Networking Attitude initiative which are Marketplace, message-in-a-bottle, T-shirt, Who's Who, and Communities. Danone focus on the communication between people and less focus on the development of the technology. They are not focusing on development of technology because development of technology might not achieve the desired effect of innovation and progress in the future. Furthermore, Danone is

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multinational company, where they should take few consideration in development of technology such as; the different national and cultural factors, the policy factors in different countries and conveying people will not cause interpretation errors or missing information.

3.

What should Franck Mougin and Benedikt Benenati do next? Which of the three options they are considering (go wider, go deeper, go richer) do you recommend? Why?

Deeper more employees

Wider outside the company

Richer for innovation

Advantage

1. To enrich the KM system

1. The bridge to partners, suppliers, customers, and consumers. 2. Lower cost

1. Sharing new idea to create new products.

Disadvantage

1. Higher cost of labors

1. Higher risks, because their competitors will benefit as well.

1.Spend much time 2.Need manager support the product development

A s p e r t a b

le above, all three option have their own advantage and disadvantages. The best strategy for the company is to restudy and reintroduce the networking concept. By restudying the networking concept, the firm can determine its flaws and it can make better features of the networking technology. By reintroducing the networking concept, the firm can give more emphasis to the benefits of the networking system. By reintroducing the networking concept, the firm can make sure that people would understand its use and purpose.

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Danone Case Study

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