Danimal in South Africa
Goal:
In 2003, DANONE France indicated that it wanted the South African business unit to introduce a dairy product into the market at the base of the pyramid (here we show THE pyramid ). South Africa has one of the highest inequality gaps in the world and the country is characterized by both pockets of world-class excellence and a large impoverished population.
Challenges the DANONE SA (South Africa) company faced before launching the product (Danimal): * Even with a specialized distribution supplier (Logistic company Imperial; long-term partner Clover), the cold chain remained a challenge for the South African business unit. * DANONE lost money because of the crisis with middle and senior local (SA) managers as they turned out to be insufficiently dynamic and didn’t steep deeply enough in the DANONE culture. * Therefore, DANONE changed those managers for expatriates. But new managers’ local knowledge tended to be limited. * DANONE was not a very hierarchical organization. There were standard, common-sense business principles and process in place but these weren’t rigid. DANONE SA regularly reported to the head office, but the units was allowed to decide what was best for the country and operated quite autonomously. (I mean it wasn’t a problem, but a challenge as this type of organization can increase risks of losing money). * The company had lost market share in the previous five (5) years due to the increase in private dairies launching their own products. * It was particularly difficult to create a dairy product for people at the base of the pyramid (it means for those people who live for less than 4$/day). * DANONE SA was aware of other multi-national companies that had tried to supply affordable products to this market but failed! * ……. To be continued.
What had to be done (solutions which had to be found) in order to launch the product (Danimal): 1. The company wanted to enrich a yogurt with vitamins and nutrients.
In 2003, DANONE France indicated that it wanted the South African business unit to introduce a dairy product into the market at the base of the pyramid (here we show THE pyramid ). South Africa has one of the highest inequality gaps in the world and the country is characterized by both pockets of world-class excellence and a large impoverished population.
Challenges the DANONE SA (South Africa) company faced before launching the product (Danimal): * Even with a specialized distribution supplier (Logistic company Imperial; long-term partner Clover), the cold chain remained a challenge for the South African business unit. * DANONE lost money because of the crisis with middle and senior local (SA) managers as they turned out to be insufficiently dynamic and didn’t steep deeply enough in the DANONE culture. * Therefore, DANONE changed those managers for expatriates. But new managers’ local knowledge tended to be limited. * DANONE was not a very hierarchical organization. There were standard, common-sense business principles and process in place but these weren’t rigid. DANONE SA regularly reported to the head office, but the units was allowed to decide what was best for the country and operated quite autonomously. (I mean it wasn’t a problem, but a challenge as this type of organization can increase risks of losing money). * The company had lost market share in the previous five (5) years due to the increase in private dairies launching their own products. * It was particularly difficult to create a dairy product for people at the base of the pyramid (it means for those people who live for less than 4$/day). * DANONE SA was aware of other multi-national companies that had tried to supply affordable products to this market but failed! * ……. To be continued.
What had to be done (solutions which had to be found) in order to launch the product (Danimal): 1. The company wanted to enrich a yogurt with vitamins and nutrients.