Unit 2 Written Assignment

BUS 5114: Management Information Systems and Technology

AY2023-T3

February 7, 2023

 Introduction

The purpose of this paper is to create a case report using one of the companies covered in Unit 1.

Unit 1 discussed the importance of competitive advantage and provided a brief description of three

companies, Lyft, Patagonia, and Danone. As I chose to base my case discussion on Danone, I will

continue writing the case report about Danone.

In the following paragraphs, the essay will provide a brief history of Danone, discuss the company's

competitive advantage, and explain the role information systems play in the firm's competitive

advantage. The essay will conclude by explaining why Danone was more successful than its

competitors and how the information systems enabled the company to become an industry leader.

Danone

Danone was founded by Isaac Carasso in 1919 in Barcelona, Spain. At first, Danone was a small

factory that solely focused on producing yogurt. However, a century later, Danone is known as one

of the leaders and the largest organizations in the food and beverages industry (Umapathy, 2020).

Carasso's vision and the purpose of founding the company were to provide people with tasty

products that would be healthy and would tailor to the nutritional needs of the consumers (Danone,

2022).

Nowadays, Danone is the proud owner of numerous well-known brands. These brands include

Activia, Evian, Aqua, Hayat, Danonino, Alpro, Silk, Actimel, Font Vella, etc. (Danone, 2019). The

diversification of its product as well as the ability to compete in numerous product markets is often

labeled to be one of Danone's most significant competitive advantages. The following sections will

discuss in further detail how Danone achieved its success and maintained its position in a

competitive market.

 Danone's Competitive Advantage

In order to fully understand how Danone used its competitive advantage to set its company apart

from its competitors and become an industry leader, it is vital to understand what exactly is a

competitive advantage. Competitive advantage is defined as a term that is used to refer to a factor or

factors that allow businesses to generate more sales or have superior margins in comparison to other

companies operating in the market. Competitive advantage may allow companies to produce their

goods and services at a lower price, a higher quality, or other factors that would attract customers

and motivate them to choose the company's products over the competitors'. Some of the most

common types of competitive advantage include cost structure, high quality of goods and services,

branding, distribution network, customer service, and intellectual property (Twin, 2022).

As mentioned in the above section, experts believe that Danone's competitive advantage lies in its

desire to grow the business, penetrate new markets and regions, and differentiate the products it

offers. According to Gelski (2022), Danone's strategy and competitive advantage is based on

expansion, portfolio rotation, and seeds for future growth. Danone has a strong portfolio of brands

that operate globally and locally and, therefore, benefits from geographical exposure to different

markets, including developed and emerging markets (Gelski, 2022). In an article published by

Forbes, Marla Kurz (2018) states that Danone's strategy often causes disruption in the food industry

and helps Danone establish itself as an industry leader and trailblazer. Danone often invests in

startup companies, and the company's goal in 2018 was to invest in 20-25 niche market startups by

2020. Many call Danone's strategy bold, effective, and inventive (Kurz, 2018).

Another notable competitive advantage of the organization is its digital transformation in

manufacturing units. Danone's CEO, Emmanuel Faber, made a statement saying that Danone is

committed to investing in data, technology, and agile that will enable the organization to leverage

data and technology with the purpose of improving and strengthening its operations. Danone, being

one of the largest producers of bottled water, has invested in automating processes at evian, one of

Danone's brands that manufacture and sells bottled drinking water. Due to automation, the company

gained a 12% increase in the factory's capacity and reduced its carbon footprint. Following the

success of the automation process, Danone has also automated its baby food factory, Opole, and

achieved 10% cost efficiency, 6% batch size flexibility, and reduced its carbon dioxide emissions by

12% (InfotechLead, 2020). Furthermore, when criticized for having a large plastic footprint,

Danone listened to its consumers' concerns and utilized technological investments to become more

sustainable when it came to production and packaging. In 2018, 87% of the business's packaging

was recyclable, reusable, or compostable (Umapathy, 2020).

Conclusion

To summarize the contents of the case reports, Danone is the largest manufacturer in the food and

beverage industry. The company's strategy of investing in startups, active expansion in new markets

and regions, and portfolio rotation helped Danone to become an industry leader and capture a

significant market share. Another key to Danone's success is its openness to innovation and

willingness to listen to customers' needs. Danone was able to achieve such a high level of success

by implementing information systems and technology. Information systems and technology help

Danone to analyze investment opportunities, research new markets, make informed decisions, and

incorporate automation, which enables the firm to become more sustainable, increase efficiency and

capacity, and improve the overall quality of the products it offers.

 References

Danone. (2019, April 22). Danone’s brands. Danone. https://www.danone.com/brands.html

Danone. (2022, December 8). We are Danone. Danone. https://www.danone.com/about-danone/we-

are-danone.html#MISSION

Gelski, J. (2022, September 3). New strategy at Danone focuses on four pillars. Baking Business.

https://www.bakingbusiness.com/articles/55901-new-strategy-at-danone-focuses-on-four-

pillars

InfotechLead. (2020, March 11). Danone benefits from digital transformation at manufacturing

units. InfotechLead. https://infotechlead.com/cio/danone-benefits-from-digital-

transformation-at-manufacturing-units-60835

Kurz, M. (2018, July 19). Disrupting The Disrupted: Danone’s Pursuit To Dominate The Food

Industry. Forbes. https://www.forbes.com/sites/johnkotter/2018/07/19/disrupting-the-

disrupted-danones-pursuit-to-dominate-the-food-industry/?sh=6bb2b10b3594

Twin, A. (2022, May 22). Competitive Advantage. Investopedia. https://www.investopedia.com/

terms/c/competitive_advantage.asp

Umapathy, A. (2020, February 12). 3 Business Sustainability Case Studies And Why They Worked.

RePurpose Global. https://repurpose.global/blog/post/3-sustainability-initiatives-and-

why-they-worked/
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