Australian dairy industry

Detailed requirements of the assignment You are a group of advisors to the Management Board in your company with Headquarters in Australia. As advisors you are first, required to conduct research on your selected sector/industry covering the previous 5-10 years. Second, you are required to present a company strategy to your Management Board covering the next 5 years. Third, your Management Board requires that you make a presentation of your findings and strategies, and you prepare a 2,500 word market report. The market report should, as a minimum, address the following key issues: (i) A description of your company and the industry of your company (ii) An analysis of the market structure of the industry (iii) A discussion about the demand and supply conditions for your product(s) or service(s). (iv) A discussion about the demand elasticity for your product(s) or service(s) (v) An analysis of a recent event that has (or is likely to have) substantial impacts on your industry/sector. Page 3 of 8 HI5003 Economics for Business Note: if your company has many products and/or services, you can select a representative product/service to discuss for points (2); (3); (4); and (5). This report should provide useful information for your company’s Management Board. It should use a variety of resources, including the textbook, newspapers, industry reports, the ABS website, and other sources. Furthermore, your report should include headings and sub-headings. It needs to be properly referenced using the Harvard style and at least 5 references. 

reference is a must and no plagiarism.


This report of Yeti Dairy yoghurt Milk in Australia shows that the Australian market is big and growing. Not only are the numbers of consumers increasing every year, but also every consumer is taking more pounds of fermented milk. Three different segments constitute the Australian Yoghurt Market: refrigerated yogurt, frozen yogurt, and dry yogurt mix.  The information given in this report is from various sources of government and private data and focuses on different areas of the market. The statistics could, therefore, not necessarily be comparable. The refrigerated yoghurt category will be the principal target of this market research.

Overview of the market

Depending on product form, distribution channel, and geographical review, Australia’s market in dairy products can be segmented. The market can be segmented into yoghurt ghee, ice cream, butter dairy milk, milk powder, cheese & spread, and others based on the product type. Among goods, relative to other developed nations, the milk consumption in Australia remains at elevated levels (Sharma, 2005). Because of its portability and relatively high content of protein for a dairy product, yoghurt is among the fastest expanding segments in the Australian market, especially gaining from the trend of ‘eat-on-the-go.’ Set yoghurt draws the most sales and dominates the market in Australia. Yoghurt drinking has only a limited market share and receives less than 3% of revenue (Zhao, 2017). The most profitable distribution networks are regular grocers, and their existence dominates the market. Discount grocers are the only other channel with considerable market share.

Market research

Over the past five years, the yogurt production market has grown, assisted by customer views of industrial goods as healthier food choices. In order to meet the domestic consumption demand, manufactures have bolstered production volumes, especially premium and Greek yoghurts. These yoghurt forms draw higher sales rates and help raise income from the industry. Besides, increasing overseas sales and the reputation of Australia for producing healthy and high-quality milk products have helped boost volumes of export over the period. Industry revenue is forecast to grow by an annualized 0.9 percent to hit $1.6 billion over the five years to 2020-21. Industry sales, however, are forecast to decrease by 1.3 percent in the current year, with customer incomes likely to drop. The average growth rate of the Yoghurt production industry in Australia is 1.8% for 2015-2020 (IBISWorld-Industry Market Research, Reports, and Statistics, 2020).

During the forecast timeframe, between 2020 and 2026, the global yoghurt market is projected to increase. The market grew at a steady pace in 2020 as well; the market is projected to increase over the expected period with the increasing implementation of programs by key players (Zhao, 2017). During the projected era, Australia’s dairy products demand is expected to rise at a brisk pace. Market growth is guided by a rising population, a rise in disposable income and an increasing knowledge of nutritious food and its benefits.  Due to the volatility in raw milk prices, the dairy products industry is volatile, which appears to directly affect the market of dairy products of the country.

Competitive Landscape

Parmalat Australia Ltd, Warrnambool Cheese & Butter, Fonterra Australia, Murray Goulburn, and Lion Dairy & Drinks are the five leading companies in dairy products by volume in the market share in Australia (Radaeva et al., 2019).

Company strategy

Despite the current market position of the Australian dairy industry, a proper strategic plan is pertinent for the advancement of the sector. As advisors to the management board, it is imperative to implement appropriate strategies to facilitate the operations of the industry for stimulation of the industry’s activities. The previously mentioned historical performance of the Australian milk industry heavily influences the 5-year projection of the industry. The past performances determine the ideal strategies whose integration in the industry’s management would steer the adequate performance of the sector in all departmental domains. Australian dairy reputation remains untarnished due to its advancement throughout the years in the agricultural technology employed in the country to promote the industry. However, the industry remains mostly affected by the volatile international market conditions such as exchange rates. A thorough review of the industry’s SWOT analysis conveys relevant information regarding the milk industry in the country and a subsequent tool relevant to the company strategy. The industry’s SWOT analysis is as detailed below.

Australian milk industry SWOT


The strengths displayed by the Australian dairy industry are significant for the projection of a 5-year strategic plan for the Yeti Dairy Company considering necessary for the stimulation if its operations. The strengths that the sector posses include an advanced export market and its proximity to the Asian market, a faster-growing domestic market, increased capacity for cutting-edge research and development, product diversification, cost competitiveness, and product reputation (Zhao, 2017). The closeness of Australia to the Asian market favors transactions between the two regions. Asia provides an extensive market for the consumption of Australian dairy exports and with the increasing trade reforms among countries like China and increased demand for dairy products from Indonesia with a significant annual population increase. With the concrete strengths that the Australian dairy industry relay, it is easier for the country to augment its international dairy activities considering its remarkable strengths.


The weaknesses associated with the Australian yogurt milk industry entail the accessibility and cost of labor relative to other international competitors, extensive dependence on animal pastures grown under natural climate, management of commercial farm capabilities is limited, intense subjection to external interferences such as exchange rates with minimal ability to reduce (Zhao, 2017). A precise evaluation of the weaknesses affecting the industry in the country stimulates the provision of methods to mitigate the intensity of the weaknesses. In 5 years, the farming system can get transformed with policy reforms that enable access of relevant information to farmers regarding issues such as the divergence of conditions under which pasture can be grown. Additionally, the provision of powers to local farmers in the management of the corporate farms to further intensify their management will eradicate the identified weakness and thus further enhance the activities of the industry.


The industry’s opportunity portfolio gets based on trade, product, structure, and improvement of farm productivity. There is the expansion of foreign markets in Asia, which offers a conducive market upon which yogurt milk can get exported in the trade domain. Product diversification provides an opportunity for the industry through the development of various flavors of yogurt milk. The development of new business models enhances the production growth of yogurt milk, which further promotes the sector’s operations (Zhao, 2017).


There exist several threats facing the sector and which need to get addressed as they highlight a possibility in the presenting drawbacks to the success of the industry. The threats include reduced government expenditure on the operations of the industry, concerns overs the relevant license to operate, adverse conditions facing the domestic market, and adverse international market conditions that impact trade. The prevailing global marketing conditions prevailing in the country include the variation of exchange rates, which disfavor market competitiveness, technical barriers, and subsidized competitors (Zhao, 2017). In ensuring an appropriate strategy for the industry, it is fundamental to address the threats facing the industry for the creation of a sustainable environment for its operations. The integration of the relevant stakeholders is crucial in ensuring that the industry receives reasonable funding to shield it against international discrepancies that impose significant risks to the sector.

The market report on the Yogurt milk market in Australia

Executive summary

This paper provides pertinent information regarding the Yeti Dairy Company in Australia and a subsidiary of the Australian milk industry. Information concerning the general framework of the Australian dairy market influences the performance of the company in question, and the local and domestic conditions affecting the industry translate to the concerns of the company. As such, conclusive historical information of the industry, company strategy, and demand and supply of the company’s yogurt milk products constitute a section of the market report.

Australian milk industry market structure

The market structure of a particular industry determines its economic positioning. The milk industry is considered a monopolistic competition market structure due to an exponentially large number of buyers and sellers whose milk products get varied due to the massive product differentiation that accompanies the dairy industry (Chamberlin, 1951).

Demand and supply conditions

The Australian dairy industry encounters an equilibrium demand and supply due to the constant demand and supply of milk products throughout the years. There are no interfering factors such as the seasonal demands and price of milk products from other companies due to the large annual production of milk products. Factors of production are also fairly standard throughout the country, ensuring a constant supply (Paura, 2017). As such, the Yeti Dairy Company achieves equilibrium in the supply and demand of yogurt milk.

Demand elasticity

The products produced by the Yeti Dairy Company portray a perfectly elastic demand as a small change in price significantly results in a major change in the demand for the products. When the company’s yogurt milk prices rise, there will be a subsequent decrease in demand due to substitute products (Baker and Berry, 1953). The company, as such, needs to maintain its pricing unless there is remarkable product development.

Evaluation of recent events with significant impact on the Australian dairy industry

The recent large Australian fires shook the dairy industry following the massive losses of dairy cattle that inhabited the areas worst hit. The fires would likely result in both direct and indirect losses as the farmers and consumers of dairy products would feel the impact of the fires on dairy products. The Australian milk production thus would lower and which hence affecting the exports of milk and its products. It is thus accurate to project the likelihood of massive losses in case the fires affected the dairy industry.


The Australian yoghurt market is big and a growing one. The market keeps growing both in the overall consumption and per capita. These factors suggest that Yeti Dairy Company has a big room for dominance in the market despite the major top five companies dominating the market. In order to assess how competitive the prices would be compared to existing products, any attempts to export yoghurt products must have a detailed cost analysis done. Besides, shelf life ought to be carefully thought in a bid to keep the items; retailers would also want ample residual shelf life. To contend against the already top five companies in Australian Dairy sector,, it would definitely be a tremendous challenge for Yeti Dairy Company.

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