Case Study: The Dannon Company
OL 690: Responsible Corporate Leadership
Southern New Hampshire University
March 25th, 2015
Danone, the parent company and U.S. subsidiary of Dannon, was founded in Barcelona Spain in 1919 by Isaac Carasso (Marquis, Shah, Tolleson, & Thomason, 2011). Isaac had the goal of developing a yogurt for more than the purpose of taste, but with additional inherent health benefits (Marquis, et al., 2011). The health benefits were based on the use of pure lactic ferments, which were initially prescribed by physicians due to their proven ability to help treat intestinal disorders (Marquis, et al., 2011). It was because of Carasso that consumers ...view middle of the document...
Danone originally entered into the U.S. market in 1941 and changed its name to Dannon in 1942 (Marquis, et al., 2011). Although Dannon had been in the U.S. for many decades, it was not introduced to the New York Stock Exchange (NYSE) until 1997 (Marquis, et al., 2011). This introduction was done with the intention of gaining U.S. market share and raising their international profile (Marquis, et al., 2011). There was much success with this decision, so much so that in 2008 Danone reported net revenue of $21.2 billion, employed 80,143 people globally, and was No. 1 in the world with bottled water and No. 2 with baby nutrition (Marquis, et al., 2011). There was still much work and focus to expound on this growth and the U.S. market. Dannon was the second biggest player, trailing behind Yoplait, in the U.S. market and was therefore driven by the goal to move from their No. 2 spot to No. 1.Marketing was very engaged in Dannon’s effort to grow and therefore focused on increasing yogurt consumption in the U.S. while growing their existing brands (Marquis, et al., 2011).
Following in the footsteps of Danone, Dannon maintained a strong commitment to CSR that was integrated into the company’s mission of bringing as many people as possible health through food (Marquis, et al., 2011). Their CSR strategy, although internally focused, was based on three key themes, nutrition and health, nature, and people (Marquis, et al., 2011). Danone set a great example for Dannon, as they were focused on social responsibility and realized that it was equally as important as their economic performance (Marquis, et al., 2011). These beliefs projected a very supportive parent company that not only understood the importance of CSR but also practiced it every day. Danone was a relatively hands off parent that encouraged and trusted Dannon to make local decisions. Local leadership held complete responsibility for the profits and losses on local leadership (Marquis, et al., 2011).
In 2009, Dannon’s senior director of public relations, Michael Neuwirth, was posed with the dilemma of how to take Dannon to the next level, and therefore considered leveraging the existing CSR efforts to help with the effort (Marquis, et al., 2011). Although Dannon had a strong CSR foundation, they were late to the publicized CSR party. Yoplait was a part of this publicized party for quite some time with their own CSR campaign of saving lids to help save lives for breast cancer awareness (Marquis, et al., 2011). If Dannon were to use their CSR actions to help with their economic goals, there is the dilemma of how to approach the transition from internal to external presentment.
To Communicate or Not to Communicate?
There are recent empirical studies that revealed that external stakeholders and in some cases internal stakeholders have very little knowledge of a company’s CSR activities (Du, Bhattacharya, Sen, 2011). This gap in visibility and/or communication is a hindrance for any company in...