value and others are primarily small and medium-sized enterprises. In the future, Germany Trade and Invest (2014) predicted that there is increasingly the emerging trend in larger companies but fewer of them. In particular, “Dairy Industry Profile” (2015) warned that the drop in global milk price creates highly volatile competition in the German dairy market because there is high cost of storing milk, which is greatly perishable commodity. Thus, degree of rivalry is assessed as strong.
Opportunity and risk for Fonterra in Brazil
Firstly, market trend in Brazil demonstrates that Fonterra can exploit considerable opportunity to generate income from increasing demand for dairy products. Passport (2016b) considers that demand of drinking milk …show more content…
Additionally, "Dairy Industry Profile: Brazil" (2015) predicted that there is increasingly the trend in mergers and acquisitions because they can strengthen scale economies in production and reduce overhead costs. Market concentration in Brazil reflects that Fonterra should highly focus on improving its brand value, in order to gain market share from high market-share companies because it is difficult task for Fonterra to differentiate their well-known brands. Thus, degree of rivalry is assessed as …show more content…
van den Bos (2015) reported that the demand for milk products and yoghurt will reach the greatest growth rate from 2014 through 2019. “Drinking Milk Products” (2016) considers that largely economic slowdown reflects a 1% decrease in sales volume, which is estimate to be worth 253 billion yuan in 2016. However, yoghurt and sour milk products rise by 22% in current value terms to reach 101 billion yuan in 2016 (“Yoghurt and Sour Milk,” 2016). Additionally, the value sales of infant formula products are predicted to be worth 120 billion yuan, with current value rising by 6% in 2016 (“Baby Food in China,” 2016). Thus, China’s market growth is assessed as very strong because Fonterra can benefit from large consumer
Opportunity and risk for Fonterra in Brazil
Firstly, market trend in Brazil demonstrates that Fonterra can exploit considerable opportunity to generate income from increasing demand for dairy products. Passport (2016b) considers that demand of drinking milk …show more content…
Additionally, "Dairy Industry Profile: Brazil" (2015) predicted that there is increasingly the trend in mergers and acquisitions because they can strengthen scale economies in production and reduce overhead costs. Market concentration in Brazil reflects that Fonterra should highly focus on improving its brand value, in order to gain market share from high market-share companies because it is difficult task for Fonterra to differentiate their well-known brands. Thus, degree of rivalry is assessed as …show more content…
van den Bos (2015) reported that the demand for milk products and yoghurt will reach the greatest growth rate from 2014 through 2019. “Drinking Milk Products” (2016) considers that largely economic slowdown reflects a 1% decrease in sales volume, which is estimate to be worth 253 billion yuan in 2016. However, yoghurt and sour milk products rise by 22% in current value terms to reach 101 billion yuan in 2016 (“Yoghurt and Sour Milk,” 2016). Additionally, the value sales of infant formula products are predicted to be worth 120 billion yuan, with current value rising by 6% in 2016 (“Baby Food in China,” 2016). Thus, China’s market growth is assessed as very strong because Fonterra can benefit from large consumer