Summary:
In this paper I will be analyzing the Danone Company case, more precisely the Activia’s place in Egypt. How it entered the market, its performance and the challenges that it faced in the market. I will as well propose a strategy for Activia’s next product life-cycle phase.
Finally, I will rely on the SWOT analysis to present some of the products threats and its opportunities.
1. Danone launched Activia for the first time in 1986 in Spain. At this time, the United Sates was facing its second decline in economy, when the international competiveness of the U.S. commodities and capital decreased dramatically. It suffered from a trade deficit and its economic position fell markedly which affected the economy of many other countries especially that of Europeans.
Launching a new product at that time was not a very good idea at all first because people were interested in buying essential products instead of spoiling themselves by trying newly launched goodies. The circumstances were not helping and all they cared about was saving as much as they can.
Second, it was a bit early to introduce at that contradictory concept of bacteria to poorly educated people. Bacteria meant sickness and hospitality was not so easy to get so why risking it by intentionally eating a bacteria.
2. Activia is in the growth stage of its life cycle. This stage is characterized by a strong growth in sales and profits. The company can start to benefit from economies of scale in production at this level. The profit margins and the overall amount of profit will increase. Its sales were rapidly growing worldwide for its amazing effect so its profits will naturally increase as well.
Customers who first tried it and spread the world of how amazing was their experience helped a lot and contributed in the growth of the product. Those were the early adopters, which lots of companies rely...