International Strategic Management

Running Head: MANAGEMENT 0
INTERNATIONAL
STRATEGIC MANAGEMENT

MANAGEMENT 1
Table of Contents
Introduction................................................................................................................................2
Macro and Microenvironment....................................................................................................2
A2 milk Competitive advantage.................................................................................................4
A2 milk Generic strategies.........................................................................................................6
A2 milk Growth Strategies.........................................................................................................7
Strategic Recommendations.......................................................................................................8
References..................................................................................................................................9

MANAGEMENT 2
Introduction
In Australia, more than 6000 dairy farmers are responsible for producing nearly 10 billion
litres of milk annually. At present, Australia hold for milk production through the globe at
2% and is top in distribution of dairy products.
In 2000, the A2 Milk Company was founded and known for making infant formula and also
publicly listed in ASX 200. The company headquarter is situated in Sydney, Australia. It
produces dairy products supplied both domestically and globally and majority of its activities
are conducted in countries like US, UK, China and Australia. The company already gained
exceptional growth and now planning to move with launching new product line consisting of
nutritional and organic products. The company earned net revenue of A$337.3 million in the
year 2016 (fortrade.com, 2018). In response with the growth plan, the company will continue
to tap various international markets to ensure its sustainability in long term.
Macro and Microenvironment
In relation with A2 Milk microenvironment, the first environment factor is supplier. There
are 28 qualified milk dairy farms produces natural and pure a2 milk from specifically selected
cows right throughout Australia. In 2011, the a2 Milk Company also develops a joint venture
with a major British milk supplier i.e. Muller Wiseman Dairies to process market and sell its
A1 protein free products in Ireland and Britain (Sampson, 2016). In relation to the customers,
the enterprise are serving to the people of Australia, China, New Zealand, Malaysia, Hong
Kong, Singapore, USA and UK. Other than this, the increasing presence of intermediaries
and milk brokers in raw milk acquisition markets also has the potential to promote
competition. In relation to competitor, it includes Fonterra, Dairy Farmers, Fonterra and Pura.
A2 Milk Company macro environment can be addressed by using PEST Framework –
 Political Factors – In Australia, the dairy organizations were permitted to set their
own farm gate prices hence allowing adequate supply of milk. In addition, the
government policies were in favour of A2 Milk business such as rivalry policy as it
will reduce unrealistic competition. In addition, A2 Milk organisation will also able to
sell its premium milk brands in the Australian supermarkets and grocery stores.

MANAGEMENT 3
 Economic Factors – Purchasing power is one of the factors that is highly influencing
the dairy industry. As intake of dairy products is high in Australia, purchasing power
will also be high. Moreover, A2 Milk Company can still get huge success in the
market due to rise in demand for milk from China. It was also identified that A2 Milk
share went up to 190% when it noted in ASX (fnarena.com, 2018). This is a good sign
for the company.
 Social Factors – When it comes to food consumption, Australian consumers are more
intended towards consumption of healthy products. In 2017-18, it was founded that
two third of Australian adults (67%) were obese or overweight. In extent with new
development, this health perception force producers to sell low fat dairy products.
Offering nutritious and natural milk serves as an advantage to A2 Milk, however,
there are various rivals offering quality dairy products and may significantly impact
future sustainability of A2 business.
 Technical Factors – In dairy industry, one of the technological advancement can be
seen in fat testing introduction which allow various organizations to test the fat levels
in the dairy industry. However, A2 Milk organisation sustains on 100% natural milk
taken out from particular cows that do not include genetic engineering and
technological process (Satyanarayana, 2018).
