Global Scanning And Marketing Audit For The A2 Milk Company In India And Thailand, Essay.

You are to prepare a global scan and market entry audit on “choosing your destination”. This is an individual assignment to be presented in a format of your choice so long as it does not exceed. You will conduct this based on one of the destinations discussed in class. This assessment focuses on the second, third and fourth learning outcomes as per the subject outline. 

Global Scanning of India and Thailand

From the first assessment, it is identified that The a2 Milk Company is successfully operating its milk products business in New Zealand and serving other countries like Australia, United States, Singapore, China, Hong Kong and United Kingdom. Now, company is planning to expand its business in other international markets. This report is focused to conduct global scanning and marketing audit of the chosen destinations i.e. India and Thailand. These are the two destinations where this company can expand its business in the future. The appropriateness of market is analyzed by evaluating different factors of the nations. Furthermore, strategic capabilities and other related factors are also assessed. At the end, recommendations are provided regarding the best destination for the operations of The a2 Milk Company.

Before expanding its business in global market, it is very important for an organization to scan the external factors which can have both positive and negative impact on the growth of its business (Solberg, 2017). The a2 Milk Company will also conduct a market audit of chosen destinations. Both of the destinations are analyzed below:  

In India, government has taken various initiatives to change the face of dairy products manufacturing. There is no excise duty on most of the milk and other dairy products (The a2 Milk Company, 2018). Additionally, there is no requirement of license for operating business in this industry. Thus, it will be very easy for The a2 Milk Company to expand its operations in Indian market. Moreover, Indian government has allowed 100 percent FDI on dairy products. This company is offering A1 protein free and nutritious milk. So, it will get government’s support to strengthen the village infrastructure for better milk procurement.

As per a survey study, people’s spending on dairy products as a percent of food consumption is 15.47% in rural areas and 18.85% in the urban areas. The economy of India is growing that can facilitate the business operations of The a2 Milk Company (Saudi Gazzate, 2016). It has become the fastest growing economy in the world with GDP growth rate of 7.1%. In India, most of the population is covered by middle class income and their disposable income is growing. It can be profitable for increasing the sales of The a2 Milk Company (Kumar and Prabhakar, 2014).

There are various social and cultural factors which can assist the business expansion of this company. Milk has a vital role in Indian society that is largely vegetarian. In this nation, 21% of population is covered by farmers that can support a2 Milk Company to get raw materials on appropriate costs. Due to changes in the customers’ lifestyle and consciousness towards health, government has established various norms that every milk product providers need to maintain some specific food standards (Huber and Suryanarayan, 2016).

Market Audit of India and Thailand

Indian government has imposed various environmental standards on manufacturing industries so a2 Milk Company needs to comply with them. Nowadays, people are very conscious about the protection of environment and natural resources so this company needs to engage in corporate social responsibility and sustainability. Milk packaging can increase the pollution level in the country (The a2 Milk Company, 2018).

The milk and dairy market in India is experiencing a strong growth and development. This industry remains highly uneven with the players having presence in some specific states and regions. India is the largest milk producer in the world and it has increased this production by 20% from 137.7 million tonnes to 165.4 million tonnes between the year 2014 and 2017. It can assist a2 Milk Company to improve its business and revenues.

There are various companies which can pose competition on a2 Milk Company like Nestle, Amul, Mother Dairy, Saras Milk etc. There is no company that offers a2 protein milk products and infant formula so this firm can take benefits in India (The a2 Milk Company, 2018).

About Thailand dairy industry, it is stated that it is shaped by the support of its government. In this country, The Department of Livestock Department has introduced various projects and programs to promote dairy production and farming. In this market, The a2 Milk Company can have the benefits of mobile training units of government which give the information about different techniques and technology of milk production and dairy farming like feed management, disease control and artificial insemination (Chungsiriwat and Panpol, 2011).

Thailand is an industrialized country which economy is totally dependent on the export, with the export amounting for approximately 2/3 of its GDP. In this country, agribusiness is one of the major contributors to its economy. Current GDP growth rate of this country is 3.9% that indicates that it is a developing nation. There are various economic factors in this market like unemployment rate, investment risk and inflation rate which can affect the business of a2 milk Company adversely. However, now there is improvement in the economic conditions in Thailand that can assist this milk company to establish business successfully (Lees-Marshment, 2018).

In Thailand, a larger population is engaged in the subsistence agriculture so it is among the countries with lowest unemployment rate. Recently, Thailand is importing its dairy products from New Zealand, Germany, Australia, USA, France etc. The people are becoming conscious towards health so they prefer to intake low fat milk. This fact can help a2 Milk Company to set up its business in Thailand (Lees-Marshment, 2018).

Strategic Capabilities and Risks Assessment

In order to resolve the issues of environment and wastage, the dairy and milk companies are using manure from the farms to manufacture fertilizer and biogas to reduce the waste water and smell. The a2 Milk Company needs to develop effective environmental protection practices so that it can operate its business smoothly.

Earlier, milk was never a significant product in this country. Later during previous 15 years, the milk animals in Thailand have been increased 15 times. Today, the country has the capacity of milk capacity of 2800 tonnes in a day and more than 1 million tonnes every year. In indicates that there is an increase in the consumption of milk and dairy products. The major players in this industry are such as Fonterra, The Thai Dairy Industry Limited, Friesland etc. These organizations can pose competition on a2 Milk in the country. Among them, Fonterra is the biggest competitor as it also offers nutritious milk and dairy products in the country (Adeola, Boso and Adeniji, 2018).

From the above analysis, it can be justified that above two markets can provide various business opportunities to a2 Milk Company of New Zealand. Currently, this company is operating its business in New Zealand and serving various areas. It has well-established business in these areas. Now, company is planning to expand its business as it wants to enhance its brand presence in different markets. The company has enough capabilities and resources to spread its activities in international markets. It has launched various products in this country like infant formula, milk, milk powder etc. and it has an established position in New Zealand and Australia. This is the right time for a2 Milk Company to make investment in foreign markets (Zeriti, et al, 2014). Above global scanning showcases that Thailand and India are appropriate markets for any dairy and milk company.

As mentioned above, a2 Milk Company is operating its business in New Zealand successfully. The company has sufficient capabilities to expand business in foreign market. One of the major capabilities of this company is innovation and uniqueness. The a2 Milk is using innovative techniques to produce milk and other related products. The products of this company are very unique than other players as its cows are producing milk free from A1 protein and marketing a2 milk. Additionally, branding is another capability that can support this organization in new market. It has developed an effective brand portfolio that includes innovative products like milk powder and infant formula (Papadopoulos and Heslop, 2014).

Recommendation: India as the most suitable market for The a2 Milk Company

In international markets, the company may face different risks like legal risks, market risks and financial risks. The laws and regulations in international dairy market can resist a2 Milk Company to grow and enhance its business. There are frequent changes in the needs and demands of customers towards dairy products like people do not want to intake milk with fat. It can affect the business operations of a2 Milk Company. Moreover, a2 Milk Company may confront the risks related to funds and costs as it is offering its products on premium prices. This factor can affect the sales of a2 Milk’s products (The a2 Milk Company, 2018).

It is hereby recommended that a2 Milk Company should expand its business operations in Indian market as it can provide more favorable environment and more business opportunities than Thailand. It can be seen that economic conditions in this country are better than other nation. Its economic environment will help the company to increase its overall sales and revenues. The market trends and conditions indicate that India is the largest producer of milk so this firm can enhance its business activities. In India, most of the population is covered by farmers that can be a positive factor for the growth of a2 Milk Company. Thus, it can be stated that India is the most appropriate international market for a2 Milk Company.

Conclusion: 

Thus, it is hereby concluded that a2 Milk Company is a well-recognized company in New Zealand dairy industry. It is found that India is more appropriate market for business expansion of a2 Milk Company. This country provides various opportunities and advantages to dairy business. The people are very much concerned about health issues and medical conditions so they will prefer to use milk products of this firm. In this way, the company should spread its business in Indian market.

References:

Adeola, O., Boso, N. and Adeniji, J., (2018) Bridging Institutional Distance: An Emerging Market Entry Strategy for Multinational Enterprises. In Emerging Issues in Global Marketing (pp. 205-230). Springer, Cham.

Chungsiriwat, P. and Panpol, V. (2011) Thailand: An industry shaped by government support, Available from https://www.fao.org/docrep/011/i0588e/I0588E10.htm [Accesed on 30 August 2018].

Huber, J.D. and Suryanarayan, P., (2016) Ethnic inequality and the ethnification of political parties: Evidence from India. World Politics, 68(1), pp.149-188.

Kumar, R. and Prabhakar, D.R.K., (2014) Opportunities and challenges in Indian dairy industry supply chain: A literature review. International Journal of Logistics & Supply Chain Management Perspectives, 2(4), pp.791-800.

Lees-Marshment, J. (2018) Introduction: Political Marketing and Management in New Zealand, In Political Marketing and Management in the 2017 New Zealand Election (pp. 1-5). Palgrave Pivot, Cham.

Papadopoulos, N. and Heslop, L.A., (2014) Product-country images: Impact and role in international marketing. UK: Routledge.

Phi, D.H. (2017) Dairy Production and Trade in Thailand, Available from https://ap.fftc.agnet.org/ap_db.php?id=730 [Accesed on 30 August 2018].

Rakotoarisoa, M. and Gulati, A. (2006) Competitiveness and trade potential of India’s dairy industry. Food Policy, 31(3), pp.216-227.

Saudi Gazzate. (2016) India economic growth slips to 5.7% in Q1, Available from https://saudigazette.com.sa/article/516352/BUSINESS/India [Accesed on 30 August 2018].

Solberg, C. A. (2017) International Marketing: Strategy development and implementation. Routledge.

The a2 Milk Company. (2018) About Our Products, Available from <https://thea2milkcompany.com/about-us/about-our-products/> [Accessed on 30 August 2018].

The a2 Milk Company. (2018) Supporting Our Community, Available from < https://thea2milkcompany.com/about-us/our-community/> [Accesed on 30 August 2018].

Zeriti, A., Robson, M.J., Spyropoulou, S. and Leonidou, C.N., (2014) Sustainable export marketing strategy fit and performance. Journal of International Marketing, 22(4), pp.44-66.