Food Development
NUMICO The NUMICO’s strategy is translated by product development with nutritional products for hospital and by market development with sport nutrition. Research and development had been an important activity in NUMICO which took care of baby food and clinical nutrition. NUMICO made many acquisitions in many countries. His strategy was based on “Medical Platform Marketing” which is: High spend on both R&D and marketing
NUMICO bought General Nutrition Companies (GNC) of Pittsburgh (USA) in 1999 which allows NUMICO to take advantage of the distribution network of GNC Acquiring GNC was a sensible move, it was reducing the competition and on the other hand it was enhancing the performance. As we saw it previously, NUMICO’s strategy is translated by product development with nutritional products for hospital and by market development with sport nutrition which led to the diversification with altogether new markets and new products.
We can see on this plan initial’s NUMICO positioning and the new positioning of NUMICO when the purpose has been affected. To conclude, Numico diversified by buying European companies in the field of neutriceuticals and by going away from his principal activity. At first there is backward integration with raw materials manufacture which are food product for babies (milk, vegetables, meat, …) and nutrition solutions. The components manufacture are : plastic, packaging.
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Moreover, the R&D is interested by baby food and clinical nutrition. There is a lot of options for a manufacturer. The horizontal integration include the more competitive product which is baby food, and after nutritional products, sport nutrition with complementary capabilities like R&D and marketing. For forward integration, distribution outlets are supermarkets, hospitals, specialized stores, … In 1999, NUMICO acquired a company bigger than them in terms of production and revenue.
When NUMICO bought General Nutrition Companies (GNC) of Pittsburgh (USA) it was the largest manufacturer of nutritional product in the world with a stronghold in sports-nutrition market. Its characteristics show that GNC is a Star. NUMICO which is a cash cows becomes a Star thanks to this company. Moreover this acquisition allows a market penetration consolidation. Acquisition of new businesses far from NUMICO’s main business made NUMICO its own rival because NUMICO already had the presence in the market.
There is a risk from the growth of the activities in the USA (change dollar euro) Moreover, sales of nutritional supplements were more sensitive to economic fluctuations. Besides, their major revenue generator was still infant formula That’s why NUMICO failed this diversification Numico’s star was infant product but due to lot of exposure in low birth rate countries their business was declining at an alarming rate. Numico should turn their infant product into cash cow by offering cost leadership
NBTY’s success results: firstly, better strategy: high margin / growth business Secondly, vertically integrated organization: producer and distributor Lastly, Match between core competences NBTY’s and Rexall It has allowed Danone to strengthen in products for baby (Danone already detained Bledina) and to enter on the market of the medical nutrition. * With Numico the Group sharpened its health focus and becomes leadership of the baby and medical nutrition markets worldwide. * With Numico and Bledina combined, Danone is now Europe’s number one company for baby nutrition.
Two specialities which play the role of shock absorber in times of crisis. The first one is solid because the parents don’t save up on the food of their babies, the second is promising because of the ageing of the population. In 2007, the acquisition of Numico made Danone a world leader in baby and medical nutrition. At a time when many companies have their eyes on the health sector and hope to stake out positions, Danone’s exclusive focus on healthy food sets it apart. “ Numico was a natural choice, with its links to health, expansion and quickening international growth. ” Danone
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