Today, Danone is one of the most famous and powerful company in the food industry all around the world thanks to its presence in more than 120 countries. Since its creation in 1929, Danone increased its notoriety and diversified its activities following its mission which is "Bring health through food as many people as possible". The CEO, Franck Riboud is now the head of the company with a capital of more than 130 billion Euros.
The company's financial health and structure allow Danone to preserve a strong position in the financial market and a high share price. As every company, Danone is facing risks so the company has developed a risk management policy in order to protect its assets, the assets of the shareholders in order to respect the interests of their employees, their consumers and the environment.
However, in order to increase Danone's share price, it is possible to put into action new risk management strategies. Thus, as an investment banker, hired by Danone's CEO, I am going to present all the business risks and to propose initiatives that are supposed to increase the company share price.
[...] To finish, in the third part, we explained in detail how vertical integration strategy will allow Danone to reduce some risks related to the operations and to the market and how will it result in a positive impact on financial statements and consequently on the share price? Thus, we can say that if Danone is ready to adopt this strategy and to invest in it, on a long term perspective it will have a very positive impact on the share price. Reference List: - Danone Registration Document. Annual Financial Report. 2010. - Danone Essentials in 2010. 2010 - Danone Sustainability Report. 2010 - Eduard Van Gelderen. February 2012. [...]
[...] Thanks to its presence in more than 120 countries. Since its creation in 1929, Danone increased its popularity and diversified its activities following its mission which is, “Bring health trough food to as many people as possible”. The CEO, Franck Riboud is now the head of the Company, with a capital of more than 130 billion Euros. The company's financial health and structure allows Danone to preserve a strong position in the financial market and a high share price. As every company, Danone is facing risks so the company has developed a risk management policy in order to protect its assets, the assets of the shareholders, and also to respect the interests of their employees, their consumers and the environment. [...]
[...] We will fight against these risks with the vertical integration. Since we acquire our supplier, we will not be dependent on raw material price increases and we will always have the raw materials whenever we want. Moreover, another risk is with the quality of raw material, thanks to the vertical integration as we will be able to keep good quality of raw materials. Moreover, we will lower our production costs and we will be able to optimize our fixed costs. [...]
[...] Let's begin with market risk. We know that risks related to the environmental aspects take more importance nowadays. One of these risks is the risk due to consumer's considerations in terms of environmental aspects. Moreover, Danone's mission statement is to “Bring health trough food to as many people as possible”, which implies that Danone's product also respect the environment. Thus, we have to take more ambitious initiatives concerning the environment, and it will be possible only with our new environmental risk strategy. [...]
[...] These distributors can be dangerous for Danone because they take market shares against us and they often have a very high loyalty power. In fact, some people love the fact to buy something which is original from their region because they feel proud and they think that their money goes to people from where they live, so that they run the local economy. This phenomenon is particularly true in the Cola industry, where it is very frequent to find a local cola everywhere. [...]
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