GSBS6060 Strategic Management

Question

1) Provide a comprehensive table of numeric data showing research into the cost of the production of dairy products in Australia versus the return on sale of these products.

2) You should provide a comprehensives table of numeric data showing research into the competitive position of Australian dairy producers relative to offshore competitors.

3) You should provide a statement, based on the data at (2) and (3) above of the competitive advantage or disadvantage at which Australian dairy producers find themselves.

Answer     

Production of Dairy Products in Australia Versus the Return on Sale of the Products

For the past one year, there has been a crisis in the cost of producing the dairy products and the returns that are evident from the sales of those products.  Different regions in Australia has different experience on the production and marketing of dairy products. For instance, Victoria is the largest producer of dairy products with over 60% production level in Australia. The cost of production has been too high for the last three years from 2014 to date because of some conditions. The labour expenses have gone too high that farmers are spending a lot of money on feed per cow. When we compare the level of feeding, animal health care, packaging and industrial processing factors, the cost to produce a litre of milk into other dairy products becomes very high (Gollnow et al., 2014, p.31).

The environmental factors and unpredicted conditions of weather has affected some parts OF Australia where the green pastures for feeding the animals have gone low. For instance, New South Wales and Western Australia has been with difficulties in accessing feeds for animals due to poor weather and draught for this matter (Pembleton, 2016, p.1131). These factors make the cost to produce dairy products higher.

Table showing the relationship between the cost of production verses the returns of dairy products

Competitive position of Australian dairy producers with offshore competitors (2016/2017)

Competitive Advantage of Australia in Dairy Products Market

However, Australia has been in a position to compete with its competitors in the dairy production. One of the reason is through the use of efficient packaging of the milk products. The packaging process has captured many customers. For instance, Japan, Singapore and Indonesia has been the main market providers for Australia products (Wheelen and Hunger, 2017, p.74).

Another thing that has helped Australia to gain competitive advantage is the quality and satisfaction of the customers. The Australian dairy factories have held high quality standards in processing milk and other dairy products. For this reason, there has been a competitive advantage for Australia (Wagner and Hollenbeck, 2014, p.10. The consumer satisfaction has been as a result of being provided by the products such as cheese, butter, pasteurized whole milk and powdered milk of the customer’s interest and therefore an established market demand both domestically and for export.

References

Gollnow, S., Lundie, S., Moore, A.D., McLaren, J., van Buuren, N., Stahle, P., Christie, K., Thylmann, D. and Rehl, T., 2014. Carbon footprint of milk production from dairy cows in Australia. International Dairy Journal, 37(1), pp.31-38.

Pembleton, K.G., Cullen, B.R., Rawnsley, R.P., Harrison, M.T. and Ramilan, T., 2016. Modelling the resilience of forage crop production to future climate change in the dairy regions of Southeastern Australia using APSIM. The Journal of Agricultural Science, 154(7), pp.1131-1152.

Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledge.

Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.