The Industry Profile Of The European Trade And Invest ( 2014 )

828 Words Oct 18th, 2016 4 Pages
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 products reflects a 2.4% increase in sales volume, which is estimate to be worth 33,261 million Brazilian Reals in 2016 while economic climate was facing high inflation and currency devaluation. Moreover, yoghurt and sour milk products rise by 4% in current value terms to reach 15,358 million Brazilian Reals in 2016 (Passport, 2016b). Additionally, the value sales of infant formula products are predicted to be worth 1,871 million Brazilian Reals, with current value rising by 6% in 2016 (Passport, 2016b). Indeed, van den Bos (2015) reported that emerging Brazil’s middle class in 200 million people is significant force to drive consumption of yoghurt and cheese because this group of people is more affluent to afford them. Furthermore, the…

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