Dutch Lady Proposal Milk industry ana

Executive Summary

This report was commissioned to evaluate the potential and feasibility of expansion in two countries: Australia and Indonesia. It furthers evaluate the method of expansion: 1) Export and 2) FDI that is most suitable for this endeavor.
Methods of analysis include: comparison of various indices, research on trade agreements, trade policies and trade incentives and scenario building.
Results of analysis pinpoints that while Australia is the better country to expand in, export is deemed unsuitable but FDIs would yield good return. It is also revealed that Indonesia may be unsuitable for either expansion but export still can be considered under certain circumstances.
It is recommended that Dutch Lady should choose FDIs in Australia as the path to expansion. The combination of a factory and export hub would be able to utilize all available resources and gives Dutch Lady a stronger foothold internationally.

1.0 Introduction
Dutch Lady Malaysia, a subsidy of Royal FrieslandCampina N.V is one of the leaders of branded milk in Malaysia and was the first milk company to be listed in Bursa Malaysia (Dutch Lady Milk Industries Berhad, 2014). The company values product innovation and the health of its consumers, developing the world’s first growing up milk and cutting sugar in milk by 65% are only some of the efforts undertaken by the company.
With an annual revenue of RM692 million in 2009, Dutch Lady is not only a mature firm in Malaysia with a stable customer base but have sufficient funds to consider expansion.
As such, much contemplation regarding which country to expand has narrow the possibilities down to two: 1. Indonesia. 2. Australia. As diverting resources to support both choices is too risky, a choice must be made between the two options. This report will evaluate both choices and two methods of expansion: export or foreign direct investment (FDI).
2.0 Australia
A unique and diverse nation with a 22.5 million population and governs a

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