Strategic Report: A2 Milk's International Business Plan for India

This report provides a comprehensive analysis of A2 Milk's international strategy for entering the Indian market with its A2 Light milk product. It explores the reasons for going global, focusing on expanding the customer base and generating higher revenue. The report assesses the cultural and market fit of A2 Milk in India, highlighting the potential of the product due to the increasing health consciousness among Indian consumers. It includes a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats, as well as a PESTLE analysis to evaluate the political, economic, social, technological, legal, and environmental factors affecting the business. The report also discusses strategic capabilities, the importance of leadership in international marketing, and the use of direct exporting as a market entry strategy. Finally, it emphasizes the importance of sustainable strategies, including the adoption of green technologies and ethical animal welfare practices, to achieve a competitive advantage in the Indian dairy industry.

International strategy

Introduction
 The presentation illustrates about the global business plan and
making an entry into the market by A2 Milk in Australia.
 The product category selected is the a2 Milk™ light which has
very little fat, yet deliciously creamy and has smooth consistency.
 The topic will also illustrate about the strengths and weaknesses
of the company along with the various forces affecting the
business functioning.
 A proper action plan and conducting environmental plan are
necessary for implementing the right international strategy.

Company
 A2 milk is one of the major companies that produces cow milk and
combine both a1 and a2 protein types through natural produce.
 The milk products are healthy and are consumable by the clients who
need healthy digestion of dairy products.
 The company wants to go global by making a market entry in India to
sell the diary product to generate higher business revenue.
 To ensure successful global market entry, it is important to assess
whether A2 Milk can fit the cultural aspects of the location and it
possesses the strategic capability or not (a2milk.com.au 2018).

Reasons for going global
(country India))
 To expand customer base by making global outreach and generate higher
revenue in business
 Few of the reasons also include strategizing around the globe, gaining the
ability to survive in the killer competition, leveraging the resources and
prioritising on the culture, values and ethics
 Competing with global businesses in India and focusing on cost reduction
globally along with restructuring of global strategies are other things to be
considered for global market entry (Hitt, Li and Xu 2016).
 Fosters innovation and creativity with the use of Global economy pyramid
as well.

 The product a2 light milk is a great product with lesser fat
components and is effective for the people who experience
problems in digesting diary food items.
 Based on survey conducted, it has been found that people in
India often suffer from obesity and sometimes digestive
health issues.
 Thus, the lesser fat present in the a2 light milk can make
them consume less fatty diary item and at the same time,
remain healthy (Musso and Francioni 2014).
 The product is natural and as it meant to be, which can also
make the people in India to switch between their preferred
diary product with the milk product offered by A2 Milk,
Australia.

Cultural fit
 He organisational values, beliefs and behaviours are
associated with whether the company can adopt the culture of
India or not while making a market entry.
 It is important to train the staffs to enhance their skills and
make them adopt the new culture and work within the
existing workplace at A2 Milk.
 It is important to check whether the job candidate can
conform and consider e major values and beliefs of the
organisation that constitute the culture.
 With the entry in new market, it must be ensured that cultural
fit remain at the organisation that recruits candidates and even
select the candidates in India with appropriate skills and
knowledge to become successful in the outside environment.

Market fit
 Market fit means the ability of the business to make an entry in the
Indian market with a2 light milk for fulfilling the demands and
expectations of the customers.
 The diary industry in India is quite good and thus the diary product with
lesser fat components and health beneficiary vitamins and minerals can
suit the needs of people
 A2 Milk must identify the targeted market segments and assess the
potential of customers along with their needs and preferences (Tulung
2017)
 The value proposition should be identified through understanding of
clients’ needs that correspond to the probable effective market growth
opportunities

Objectives
 To manage successful global expansion in
the country India
 To ensure entering the market segments
and ensure that the a2 light milk can be
successful among Indian markets
 To focus on environment friendly products
and ensure keeping the health and safety
concerns in mind
 To raise the profit level and increase global
exposure for drawing more clients and
generate higher revenue.

Environmental scanning
 The internal and external environment are assessed and analysed for determining the
strengths and weaknesses.
 This will allow A2 Milk, Australia to assist the organizational management understand the
mission and vision and create a future direction to become successful in the global
competitive marketplace.
SWOT analysis
Strengths
 Strong workforce evolved through effective training sessions and investments done for
managing the resources
 Positive culture among the dealers and distributors
 Expert in entering the foreign markets and this creates new stream for generating higher revenue
(Lin 2014)
 High level of customer satisfaction due to the less fat milk product made available
Weaknesses
 Limitations of becoming successful outside the selling of core business products
 Lack of demand forecasting
 The increased rate of attrition within the workplace
 The profit level and net contribution of A2 Milk is quite lesser than the industry average
(Verbeke 2013)

Opportunities
 The shipping prices are low, due to which, the costs of transportation are lower,
which has reduced the products’ prices of A2 LIGHT Milk.
 Because of aiming of a global market entry, the company should focus on
introducing new product category to compete with the Indian diary companies
 The proper flow of cash ensures creating more scopes for the shareholders to
make investments (Luthans and Doh 2018)
 The taxation policies and lower rate of inflation an also reduce the interest rate,
thereby provide products at lower prices in India
Threats
 Threats of competitors and substitutes of diary products by other companies are
considered as major threats
 The new environmental laws can create major threats to the company in terms of
the existing product category (Laufs and Schwens 2014)
 With the new market entry, the consumers’ buying behaviours may get changed
from the online channel and create inconvenience for customers during
purchases.
 Lack of innovation and creativity for the existing products by A2 Milk Company
Limited.

Environmental scanning (PESTLE)
Political
 The political stability and need of diary items in India’s economy
 The corruption is high, which can affect the global business for A2 Milk
 Governmental laws and rules regarding the global business activities
 Taxation policies and pricing rules can affect the pricing of diary products
Economic
 Intervention of Government in the free market
 A2 Milk needs to raise capital and manage investments to succeed in the global market
 The level of skills and knowledge possessed by people regarding the diary industry in India
 The growth and economy and exchange rates must be assessed to ensure proper pricing and
delivery of a2 light milk in India (Holmes et al. 2018).
Social
 The level of education should be assessed and the company can contribute to social
wellbeing
 The promotions of healthy consuming behaviours and consuming less fat milk can cerate
awareness among the obese people and create interest among them to purchase the product
 The company needs to adopt the local culture to become successful

Technological
 Implementation of advanced technologies and use of advanced machineries and
equipments
 The use of advanced technologies can cerate ease in managing the cost
structure of products and services
Legal
 Anti-trust law implemented for managing proper trust among the customers
and influencing their purchasing behaviours.
 Laws and legislations regarding protection of patents, copyrights and
intellectual property law.
 Consumer protection law, health and safety and data protection laws.
Environmental
 The legislations and laws are to be implemented to keep the environment safe
and free from pollution
 Attitudes towards greener approaches and ecological products can also help in
managing sustainability (Li et al. 2017)
 Use of renewable energy sources for managing the business operations and
production can also assist in managing global business properly.