Analysis of the Danone value chain by Porter

Analysis of the Danone value chain by Porter

Porter's value chain model is very popular in the business world. For value chain analysis to be effective, Danone must realize that not all activities or functions require the same level of scrutiny. The list of key activities in the value chain as proposed by Porter :

1 Primary activities

The main activities in Danone's value chain are directly involved in the production and sale of the product to targeted customers.

- Inbound logistics

It is important to develop strong relationships with suppliers because their support is needed to receive, store and distribute the product. Internal logistics requires the company to focus on every aspect of processing, from raw material to finished product. Internal logistics are the recovery of raw material, storage of inputs and internal distribution of raw material and components to start production.

- Operations

Operational activities include machining, packaging, assembly and testing. The repair and maintenance of equipment is also part of this category. It includes both manufacturing and service operations. Operational activity is important for improving productivity, maximizing efficiency and ensuring Danone's competitive success. Increasing productivity can help Danone achieve steady economic growth, increase profitability and establish a solid foundation for competitive advantage.

- Outbound logistics

Outbound logistics includes the activities that enable the product to be delivered to the customer through various intermediaries. Some activities of outbound logistics are handling, warehousing, scheduling, order processing, transportation and delivery to the destination. Danone can analyze and optimize outbound logistics to explore sources of competitive advantage and achieve its growth objectives.

- Marketing and sales

At this stage, Danone is highlighting the advantages and points of differentiation of the products offered in order to persuade customers that its offer is better than that of its competitors. Danone's marketing and sales activity consists of: sales force, advertising, promotional activities, pricing, channel selection, quotes and establishing relationships with channel members. Marketing strategies may be of a "push" or "pull" type, depending on Danone's business objectives, brand image, competitive dynamics and current market position.

- Services

The pre-sales and after-sales services offered by Danone will play an important role in building customer loyalty. The power of negative e-WOM due to poor support service cannot be undermined in today's age of advanced technology.

2. Secondary activities

Support activities play an important role in coordinating and facilitating primary activities in the value chain. Danone can also benefit from the analysis of its support activities as explained below.

- Company infrastructure

Business infrastructure refers to a series of activities, such as quality management, handling legal issues, accounting, financing, planning and strategic management. Effective infrastructure management can enable Danone to optimize the value of the entire value chain. Danone can control infrastructure activities (or what is commonly referred to as overhead) to strengthen its competitive position in the market.