Culture, CSR, and Corporate Communication at Dannon
Assignment 1: Culture, CSR, and Corporate Communication at Dannon
ANSWER EACH QUESTION USING THE SOURCE PROVIDED FOR EACH. DO NOT CHANGE TEMPLATE.
- SOURCE: https://strategicmanagementinsight.com/tools/pest-pestel-analysis.html
SOURCE: Dannon Case study attached.
QUESTION: Michael Porter, when describing the competitive advantage of nations, recognized the importance of understanding the macro environment as part of his assessment. As Dannon entered the United States Yogurt Market, the competitive environment was not as saturated as it is today. Create a PESTEL Analysis of the US today that might have helped Dannon better understand their macroeconomic environment.
The primary reason for PESTEL analysis is to have an insight into the happenings within and around the more extensive business and economic niche of an organization. Every organization and company is part and parcel of this system which has a direct and indirect impact on their success or the failures. PESTEL is an acronym of these factors; Political, Economic, Social, Technology, Environment and Legal (Alanzi, 2018).
| PESTEL for the United States | Search each fact about the nation and include your reference |
| Government Policies in the United States | The United States is considered a world superpower, has a valid rule of law and a reliable democratic framework. The United States democratic set up is acknowledged from their election, which is considered free, fair and transparent. It is a country with a substantial economic and political influence in both international and national policymaking (Marquis et al., 2010). The significant political muscle has help it enjoys a politically stable environment that has favoured thrive of business such as Danone (Jurevicius, 2013). A politically stable country enjoys a peaceful setting with robust regulations that protect businesses. The USA has rules like, patent or copyright laws, consumer protection laws, competition laws and many more which provides a friendly environment to fairly compete.
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| Economic Conditions in the United States | The US has the largest economy in the world, with the GDP approximated at over $16.760 trillion. Its economy is well developed and is consistently experiencing a surging growth rate. The s collects its economic strength from both manufacturing and service industries. The strong economy experiences full employment which consequently increases incomes to individuals. With an increase in revenue, disposable income rises hence increase in expenses (Jurevicius, 2013). The result is translated to increased purchases of products. Danone has largely benefited within this large economy by intruding its brands which have gained prosperity over Time.
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| Social-Cultural Factors in the United States | The United States is the third-largest populous country in the world, with over 320 million people. It is a culturally diverse country with the most ageing population. Most of its people are of the liberal mindset; however, the resent racial intolerance is a matter of concerns that can have grave impacts on stability. As of recent racial inequality has been profoundly evident with significant disparities in wealth distribution among its population. The general trend to the preference for buying beneficial health products has favoured the prosperity of the Danone, whose products are focused on health and wellbeing.
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| Technology that matters: technology that is not their product technology | Innovation and technology have been the pillar of economic development in the US. Its inception has seen the country ranked the best in the application of technology (Jurevicius, 2013). The country has continuously improved its technology which makes it a giant among its competitors lie China and India. Additionally, technologies have been developed, creating new opportunities, environmental technology, nanotechnology and biotechnology are some which have attracted new venture. Accessibility to these technologies and information consequently has been made readily available with intense penetration of internet services. |
| Environmental Constraints in the United States | The legal framework is intense and much attention is drawn on sustainability, where actions of productions should not have much negative impact on the environment. The pollution impacts are strongly advocated for, and agencies like EPA have been established to ensure compliance with the stipulated guidelines. Additionally, regulations on emissions have been adopted through charges and permits to mitigate emissions and pollution.
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| Laws that affect the consumer packaged food industry in the United States | For apparent reasons, quality, safety and prices are vital for consumers; for these reasons, some laws are implemented guide standardization, quality and safety of these products to the market. Nutrition Labeling and Education Act (NLEA) was effected in May 1994 to regulate, nutrient content, and nutrition labelling on products (Henderson, 1996). The act has rules that must be strictly observed. The rules can drive firms out of the US market. Another is the Food and Drug Administration (FDA), among other laws (Jurevicius, 2013).
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QUESTION: Dannon is wondering how and if they should communicate their Corporate Social Responsibility (CSR) Message to their stakeholders. Before doing so, they should construct a stakeholder analysis and assess the importance of each stakeholder:
The company wishes to go further from the production of its yoghurt products and be part of the campaign that fosters healthier living among the community. Dannon’s primary CSR themes are nature, people and, nutrition and health (Marquis et al., 2010).
| Stakeholders see page 130 in your book | Key Interests | Importance of Strategy (High or Low) | Influence on Strategy (High or Low) | Participation: (1 Keep Informed; 2 Keep Satisfied; 3 Manage Closely; 4 two way communication) | Content/objective of CSR message for stakeholder |
| Employees | Cohesion promotion and friendly working atmosphere | To enhance, unity, productivity and training or efficiencies | High | 1,2, 3 | We intend to make you develop in a friendly atmosphere, both health-wise and welfare wise. |
| Customers | Value | Consumer satisfaction, high | High | 1,2,3,4 | We promote a healthy living |
| Shareholders | Dividends | High sales increases sales | High | 1,2.3. 4 | We intend to boost sales massively |
| Government Agencies | Compliance and safety | High | High | 1,2 | Reduce emission |
| Special Interest groups | High Social participation | High | High | 1,2,3,4 | We are part of you In all endeavours |
| Distributors | Income | High | High | 1,2,3,4 | We intend to maximize on or profits. |
- To know if they should fund a CSR strategy, they must fully understand their competitive position, Dannon should run a competitive analysis. Create a competitive analysis here followed by a five-force analysis of the US Yogurt Market.
Implementation of appropriate CSR.
As part of the implementation process, knowing what the competitors are doing and the business’s competitive position is vital. Using Porters five force analysis, what is Dannon competitive position? These forces include; supplier power, buyer power, competitive rivalry, threats of substitution, and threats of new entrants.
Competitive rivalry
Major rivals are Nestle, Unilever and Mondelez, which are multinational with huge portfolios. With Nestle at $93.512 billion, Mondelez at $ 25.868billion. These annual revenues compete against Dannon’s $ 29.092 billion. The diversified product line of Dannon gives a vantage position in the US, where health-related issues are on the rise (Danone, 2019).
Threat of substitutes
The food industry is subject to a lot of competition with readily available replacements. Ultimately this means that quality should not be compromised at the expense of price. Danone has a chance based on its products which are medically nutritious and plant-based dairy.
The threat of new entrants
This force is not impactful as startups cannot afford this industry. The industry often requires substantial capital investment and has a supply chain that is complex (Danone, 2019).
Bargaining power of buyers
Main buyers are the large retail store like Carrefour, Wal-Mart, and Tesco. Availability of the same product by different producers gives them a lot of leverage to get the same product elsewhere (Danone, 2019). Therefore the increase in price enhances switch to another manufacturer
Bargaining power of suppliers
Suppliers dominate the industry if they are few, and the demand for their products is high. Danone produces most of its items; these are both retail and packaging; this has cushioned it from these threats.
Smartway Transport partnership. The move was aimed are reducing carbon emissions.
Implementation of appropriate CSR.
As part of the implementation process, knowing what the competitors are doing and the business’s competitive position is vital. Using Porters five force analysis, what is Dannon competitive position? These forces include; supplier power, buyer power, competitive rivalry, threats of substitution, and threats of new entrants.
Competitive rivalry
Major rivals are Nestle, Unilever and Mondelez, which are multinational with huge portfolios. With Nestle at $93.512 billion, Mondelez at $ 25.868billion. These annual revenues compete against Dannon’s $ 29.092 billion. The diversified product line of Dannon gives a vantage position in the US, where health-related issues are on the rise (Danone, 2019).
Threat of substitutes
The food industry is subject to a lot of competition with readily available replacements. Ultimately this means that quality should not be compromised at the expense of price. Danone has a chance based on its products which are medically nutritious and plant-based dairy.
The threat of new entrants
This force is not impactful as startups cannot afford this industry. The industry often requires substantial capital investment and has a supply chain that is complex (Danone, 2019).
Bargaining power of buyers
Main buyers are the large retail store like Carrefour, Wal-Mart, and Tesco. Availability of the same product by different producers gives them a lot of leverage to get the same product elsewhere (Danone, 2019). Therefore the increase in price enhances switch to another manufacturer
Bargaining power of suppliers
suppliers dominate the industry if they are few, and the demand for their products is high. Danone produces most of its items that are both retail and packaging, and this has cushioned it from these threats.
How do global standards affect a CSR strategy at Dannon?
One of the main effects of a global standard is on the difficulty in implementing a CSR strategy. Some of these regulation contradicts with the local policy or laws hence conflicting. Another reason is on costs effectiveness; strategies differ with many factors; therefore, a standardized strategy may be expensive to apply in some areas.
Explain the role of leadership in creating developing a CSR strategy.
Leaders commit and steer the whole team to work toward these strategies. Leaders have the role of setting a precedence of the framework, drawing the goal and act as the link between the organization and the community or the social environment.
References
Alanzi, S. (2018). Pestle analysis introduction www.researchgate.net/publication/327871826_pestle_analysis_introduction
Danone. (2019). Staying ahead with innovations. https://www.danone.com/integrated-annual-report-2019/innovating-together.html
Henderson, D. R. (1996). Globalization of the processed foods market (No. 742). US Department of Agriculture, ERS, pp.
Jurevicius, O. (2013, February 13). If it’s Time to be Brave, a PEST may be your Best Defense. Retrieved June 03, 2020, from https://strategicmanagementinsight.com/tools/pest-pestel-analysis.html
Marquis, C., SHAH, P., TOLLESON, A., & Thomason, B. (2010). The Dannon Company: Marketing and Corporate Social Responsibility (A).