History:

As simple as a milk selling business may appear, you can run into serious issues if the correct
structures are not set up. Your marketable strategy is one such structure. Milk is characterized as
a white nutritious fluid that is emitted by creatures of mammalian birthplace and devoured as
food by man. Crude milk is prepared before utilization. These crude constituents (in dairy cows)
incorporate the rates of the accompanying: 87.2% water, 3.7% milk fat, 3.5% protein, 4.9%
lactose, and 0.9% debris.

Doodhwala is a milk trading business which is located in Lahore. We are gracefully dealing in
new milk business to families and organizations needing them. In recent years, there is estimated
high demand in fresh milk industry. So to seem this factor we consider this to be a chance to fill
these requests as there is a huge opportunity to get better place in market. The company faces
high level of positive or helpful response from their target market and it is on the growing trend.

Under our business plan, we own the dairy cows from that we generate. After getting highly
positive response we have to expand our business in long run by improving quality in other cities
of Pakistan.

Products and services:

Doodhwala keep first priority to develop pure and unadulterated milk and most excellent cow’s
generation. There is major issue in city or rural areas availability of pure milk or filled people
requirement on point in time. So keep in mind all of these things Doodhwala desire to make
available pure milk service in market or family unit on time. The main products of our company
are raw fresh milk, desi ghee. We are planning soon expanding our business line by adding some
of new products. It will contain other type of milk, yoghurt, milk blended juice, as well as will
add purified water bottle. The reason to expand business line is to capture a wide range of market
share of dairy market.

Livestock is a significant or main sector of farming, approximately 8M households unit in dairy

farm business or generate more than 35% earnings from livestock business. We can say in ther
words it is a major source of income, for both rural and urban people. It is big reason to mitigate
poverty. Dairy farming is a category of animal farming produces milk that will be utilized for
individual spending. Pakistan dairy development company (PPDC) recognized amongst top
producing Milk country. Market in Pakistan divided into three that is rural, urban and one of
them is process marketing chain. Pakistan is amongst those countries that are playing a leading
role in producing raw milk. Pakistan is the 4th biggest milk producing and generated state in all
over world. In producing milk Punjab and sindh both largest milk producing provinces, with
production rate of 25.62M and 9.35M liters in that order. If we talk about consumer preferences
according to survey almost 30% of family unit spending on foodstuff is on milk or dairy goods.
A main part of milk is utilized in tea that is frequent taking drink; due to this reason milk is an
important part of every family unit. If we are talk about consumers, they are divided in two parts,
one is rural and other one is urban. Both have some sort of differences, which is availability of
milk making, taste preferences, and buying power. But on the other hand, both have high
demanding level for liquid milk, or milk foodstuffs like that yoghurt, or lassi. Pakistan milk
area and dairy making sector plays a vital part in Pakistan national economy and its
significance is more than both wheat and cotton sector. Expected annual milk production that is
establish according to survey in 2007-08 was almost 42.17M tones, it makes Pakistan world’s
biggest milk producers. With all factors, government recognized dairy part as one of the major
factor for growth. During the recent 10 years, huge changes have happened in dairy part of
Pakistan, moreover because of these changes, this part going to make advancement or turn into a
biggest industry. An enormous number of up to date dairy farm have been set up in various
areas. Such farms have established most up to date administration and taking care of practices
and all around prepared labor. If we keep an eye on production system, just about 35% of
nation’s populace living in urban areas, because of this there is quick growth in periurban dairy
farm. These farms work with demanding condition with enormous quantity of animals.

If we talk about quantity available in all over Pakistan provinces then we find
out results regarding it:

PEST Analysis:

If we discuss dairy indsutry according to pestel analysis it is area of agriculture community and
control trade of milk, youghrt, desi ghee, milk cream. There is existence of many factors that can
disturb management of dairy farming industry. PESTEL factor has wide impact on every
business strategies, as well as influence on purchasing power of customers. Company may face
all of below mention issues according to PESTEL analysis:

Political Factor:

If we talk about political factor, pakistani governement is not a steady government, it is republic
country and after every five year a new person handed over all responsibilities of country
through election. Due to change of government it effect every business by externely or internally.
When parties come into existence, they will create new rules and regulations, it will may effect
industry as well as company environment. While there is no any type of tax on the trade of fresh
milk, that is the biggest advantage for both seller or customers.

If we keep an eye on marketing ethics, government doest not have any type of rules and
regulations for making advertisementsad other mrketig activities. Company is allow for making
advertisement according to their own desire and can socialize it.

Economic factor:
As an economic factor purchasing power is the one of main factor that directly or indirectly
effect milk indutry as a whole. Milk is a significant product that customers buying most, whether
cost fluctuate or not. If there is increase in prices, people may buy in less quantity but still make
struggle to purchase it. On the other hand, If there is decrease in prices, it will automatically led
sale of milk again up. As we know milk and dairy products are perisable goods the cost on which
it is trade must be according to product. If there is find a irregular go up or drop in cost it may
cause serious rivalry in the market, which will have major effect all factors in long run. An
increase in inflation rate will directly led to low purchase rate. People will buy less because of
high inflation rate. In Pakistan, annual inflation rate increased 9.3% in july 2020 from 8.6% in
june 2020. This was the highest inflation rate since March. Due to this high inflation rate
stakeholders increase the cost of fresh milk by Rupees 10 to 120/liter same as increase price of
dairy products.

Social factor:
Main focus of social factor analysis of changes in environment that me b because of changing
lifestyle, and attitude. Every country has different lifestyle or has different customer’s
preference. Every society culture that adopted by their people have an impact on industry as well
as on the organization. Beliefs and the way of living of people play a vital role to boost or
decrease sales of a specific industry. Company is completely depending on people lifestyle and
run their business according to consumer’s preference. Doodhwala agree with this statement that
any business cannot be successful until or unless they have not enough information about their
target audience lifestyle. Due to all of these factors, Dhoodhwala understand their customers or
their lifestyle according to these factors, we develop our strategy to deal with the customers.
If people will follow vegan way of life, it would affect sale of milk and dairy products. People
who follow vegan diet they avoid milk produced goods or dairy products, it would decrease the
sales of dairy products industry or same go for company.
If most of population of country will follow weight lose diet or keep change their regular diet to
low fat diet, it would also affect milk sale level. It’s a common opinion that milk is high fat
product, and it led to gain more weight. That’s why people who follow weight lose diet they will
skip high fat goods like milk or it’s related dairy goods. Due to all of these reasons Dhoodhwala
consider all aspects before launching business.
Technological factor:
With the passage of time, technological changes had wide, constant and superficial effect on
every company. These changes provide opportunity to create new goods, and bring development
in products. For last five years, due high advanced technology, milk industry makes rapid
growing and build as a dominant player in dairy firm market. For make effective development
company should not just consider technological analysis but also focus those technology factor
that affect sales of company.
 Because of social media consumers can interact with firm or able to ask any query within
seconds.
 Technology innovation provide better platform to firm for growing up business.
Doodhwala keep in contact with their customers by using of social media platform. Company
use technologies to complete their business activities like keep record of their customers and
employees.
Environmental factor:
Every business market has some type of norms or environment standards that can affect
organization profitability. Country in which an organization operates has some sort of laws and
environment regulation. It does not matter an organization is large or small scale, environment
effected by both by many ways. If we talk about dhoodhwala business, we are having fully
attention towards corporate social responsibility factor and try to save energy as well as
environment resources. Success of dairy industry reliable on health of animals, or accessibility of
farm animals. Any type of disease or problem can effect health of cattle or can cause reduce the
milk or led to the decrease in sales of milk.

The climate in which company run business is the most important environmental factor.
Company should focus on preservation methods through that can extend goods life, without
leaving them bad.

Legal Factor:
Dairy industry has to follow all rules and regulation that are issued by food regulatory authorities
for the safety of people. These rules differ from country to country. Dairy industry has to
mention proper nutrients information on the packet that is used during preparation of product. In
this information include calories, serving size, sugar, proteins, as well as nutrients.

With all of these rules Dhoodhwala strictly follow rules that are offered by food bodies or follow
rules that are making for advertising. Company always refrains to claim or state false things in
advertising.
Porter five forces Analysis:

Porter five forces model is an influential analysis for any business to understanding place or
competitiveness of your business situation. It provides help to find out business profitability
through strategy. Through it we can know about competitors and can develop strategies to
beat them.

 Provide help to understand the exits forces in the environment, which can cause to effect
business profit level.
 Help to develop matching or enhanced strategy according to environment; it will generate
high level of profit.
 Rise up strong area of firm, or help to keep away from taking wrong step in business.
 Provide help to keep a watch on rivals, provide help to understand competition level in a
specific industry

This model was formed by Michael Porter professor of Harvard business school for analysis of
an organization Productivity or effectiveness. After publication of this strategy, it was one of the
most accepted or appreciated strategy for business. It is helpful when initiate a business or
toward the inside new industry. These five forces include:

i. New Entrants
ii. Power of supplier
iii. Power of buyer
iv. Substitute threat
v. Competitive Rivalry

Threats of new Entrants Low

This factor help to identify threats of entering of new competitors, companies depend on
customer’s reliability, market share, and cost benefit. Every year many of new business come in
in the market for generate profitable business. New participants into a market will bring extra
limit and increase competition. The risk from new participants will rely on the strength of the
barrier to section and the conceivable reaction of existing competitors to another competitor.

Boundaries to way are factors that make it difficult for another participant to increase a
fundamental grip in a market. This threat include where new type of business try to enter in the
market or capture other business market share. Most of business try to enter at the point when
specific business on the peak and earn profitable market share. If there is less competition in a
specific industry, generate more profit than other industries exist in market, few hurdles include,
taking less investment, or quick grow, rivalry quickly intensify. If there is exist more companies
of same product, profit rate will decrease with the passage of time.
Different ways how Dhoodhwala tackle with threat of new entrants
 Dhoodhwala can develop the economies of scale it has inside the business, can reduce
threat of new entrants by cost of advantage.
 Dhoodhwala can concentrate on advancement to differentiate its items from threat of new
entrants. It can spend on promoting products for creating positioning in customers’ mind.
This will help out it with holding its clients as opposed to losing them to new entrants.
 Dhoodhwala can take advantage of the economies of scale it has within the industry,
fighting off new entrants through its cost advantage.
 Dhoodhwala can focus on innovation to differentiate its products from that of new
entrants. It can spend on marketing to build strong brand identification. This will help it
retain its customers rather than losing them to new entrants.

Questions Explanation Scale

 There is high level of government
Government Policies policies exist as well as according
to rules and regulation scanning
of company is one of main task by
government.
 Or company have to fulfilled all
legal rules before entering in
market or start business.
 Government or specialized
authorities supervised or scanning
new entrant companies high level,
it make weaker for new entrants
start business.
 Well-known and already existing
Strong product preferences firms have excellent brand image
and customer reliability and customer loyalty.
 Companies that exist in this
market, trade highly standardized
products as well as customers also
demand for highly differentiate
products.
 For existing brand and companies
customers has high level of
loyalty, and because it is milk
industry and people prefer quality
that’s why it is really hard for new
companies create brand image.
 All of these factors are threat of
new entrants a weak force within
industry.
  Industry main resource is milk that
Capital requirement can be available by dairy farm or
may companies have their own
cattle.
 But with all of these it require
huge amount of investment to start
milk business on fine level.
 This industry requires high level of
research or development cost, it is
cost of large amount of capital.

Know-how or knowledge  This industry has need of extra

required level of specialized skills or
knowledge. How to create
positioning or brand level in
market.
 If have no skills or business
related knowledge then it will
threat to enter in this industry.
 Therefore, it is difficult to
penetrate a business where
significant knowledge or expertise
requires rather than just simple
entering into the market with basic
level of knowledge.

Bargaining power of buyers High

The barraging power of customers is the capability of firm’s customers to place the firm under
pressure, which may affect the firm’s sale badly. Here is bargaining power of the consumer is
on high level, because consumers have similar products by diverse brand with different qualities
in the market nearly at a similar cost. At first when their relatively more organizations exist in
the market, the power intensity of customers is higher.

Threats of buyer bargaining power:

 Business buyers will have low exchanging costs, the item is undifferentiated and
purchasers may themselves experience low profitability.
 This is probably going to make them incredible and permit them to demand lower costs
for work done.
 The bargaining power of buyer is genuinely high. Purchaser power relies upon the
structure of market channels just as on the quality of the item. Despite the fact that the
 cost is controlled by providers, there is an ever increasing number of private brands show
up in the market.

Ways Dhoodhwala deal with threat of buyer bargaining power:

 Dhoodhwala can concentrate on advancement and innovation to drag in more

customers. Service differentiation and nature of items have important place for
customers within the business.
 Dhoodhwala needs to create an enormous customer base. It can do this through
advertising activities planned for building brand certainty.

Questions Explanation Scale

Demographic of Consumers? 

 Buyers include families, Men,

Who is the buyer? Are there women and children.
many buyers or few?  There exist large numbers of
buyers in the industry.
 Many buyers exist in this
industry, it include local or
domestic buyer. Both are large in
numbers.
 Industry has diverse classes of
Are buyers cost responsive? buyers.
What is the connection of  Milk is a significant product and
price to utilization? everyone has bought it for daily
life of use.
 Every buyer class has different
buying power; according to
power they buy quantity of milk.
 Every consumers focus on
Are consumers showing loyal branding feature.
toward brand?  In the current time with the
development of electronic and
print media understanding of
consumers is on the high level
and now consumers be familiar
with what they are going to buy
and what are diverse brands are
available nearly at the equivalent
price, also individuals become
wellbeing conscious.
 Company provides products with
high quality or good taste it will
 increase loyal number of
customers.
How does company  Dairy farm industry operates on
distinguish it from others wide scale. Every company has
brand, create USP for their own USP on base of
customers? quality, taste and price.
 Same as Dhoodhwala has their
own customer’s base or never
compromise on their quality.
 Company provide quality
checking to their customers for
their satisfaction level.

Bargaining power of supplier HIGH

Bargaining power of supplier is the one of significant factor of porter five forces model, that
highlights how much strong competitive exist in the market. This factor as have a lot of
importance because it elaborates power of any association by internally o externally. The cost of
all items in the dairy business is overwhelmed by an extremely essential factor which is raw milk
formation and no other substitute contribution for the making procedure. However, if in the
market there is exists large number of supplier, that make the supplier bargaining lower, for the
reason that companies may switch to another supplier. Industry will be in good and better
condition when there is large number of suppliers exists. For the reason it will not be easy for
supplier by existence of other supplier to increase price of milk as their own desire.

Main reason of high supplier power is quality of milk. So it is very essential to utilize
excellent milk quality in their items and it must to be as according to the government guidelines.
Industry has specific providers to get quality milk so as to get the best quality items. In this way,
the dealing intensity of the supplier is high. On the other hand if companies would not use high
quality of milk, it will lead to lose customers or company profitability will goes down.

Ways Doodhwala Company tackles with bargaining power of supplier

 Dhoodhwala can buy basic materials from its providers requiring little to no effort. In the
event that the expenses or items are not reasonable for dhoodhwala it would then be able
to switch its providers since exchanging costs are low.
 It can include different providers inside it’s gracefully chain. For instance, can have
various providers for its diverse geographic areas. Along these lines it can guarantee
productivity inside it’s flexibly chain.
Questions Explanation Scale
Buyer’s switching cost among  There is many
supplier? Is it high or not? company exist in the
market who run
business of pasteurized
milk. Long time ago, 1 2 3 4 5
few companies were
available, but now time
has changed, suppliers
have many options to
supplies milk.
 That’s why switching
cost to another supplier
is high
 It will take b really
difficult to again good
quality supplier again
on reasonable cost.
Is supplier are large in  Now a day suppliers
number, or few suppliers exist? have dominant position 1 2 3 4 5
in the market. They are
large in numbers.
Is there any option available  If company will provide
for company to lower loyalty facilities to their
supplier switching cost? suppliers like provide
them training session
free of cost.
 It will just not increase
supplier loyalty to that
organization, but on the 1 2 3 4 5
other hand, it will lead to
increase competitor
switching cost.
 As well as when supplier
would connect to a
specific organization it
will lower their
bargaining power.
Are the suppliers extremely  Fair enough suppliers
differentiated? Can buyers provided extremely
come across substitute quality material, with
suppliers? unique selling point.
 If they will not deliver
pretty un-standardized
or low quality raw
milk, it will compel
 company to switching
another supplier in the
market.
 That will make weaker 1 2 3 4 5
supplier bargaining
power.
 For these entire
reasons supplier
always try to make
available extremely
differentiate or
superior quality
products.

Threat of substitute Weak

When there are come new products or service that fulfills customer’s needs in similar ways,
industry profit fluctuates badly. Threat of substitute products can badly affect or may high if
substitute products provide uniquely or highly differentiate services. Milk is a significant product
that has great value in people daily’s life. But milk can be replaced by Almond milk, coconut
milk, soy milk and other one. With this entire cow milk can replace with goat or sheep milk, both
of this is substitute of cow milk that exists in the market. But these all substitute are really
expensive to buy, that’s why threat of substitute in this industry is low.

How Dhoodhwala tackle threat of substitute product?

 Dhoodhwala try to provide high quality of services to their customers. At last purchaser
would pick its items, which give more prominent quality at a lower cost when rather than
substitute items that give more noteworthy quality however at a more high expense.
 Dhoodhwala can concentrate on separating its items. This will guarantee that purchasers
consider it to be as special and don't move effectively to substitute items that don't give
these one of a kind advantages. It can give such one of kind advantages to its customers
by better understanding their needs through statistical surveying, and giving what the
client needs.
 Dhoodhwala always strive being service oriented rather than just product oriented.
 Company always tries to highly differentiate services by increasing switching cost for
customers.

Question Explanation Scale

 Substitute availability  There are few numbers of
substitutes available in market
related to milk.
 Milk substitute is almond milk,
coconut milk, soy milk. Or cow
milk substitute is goat milk or
sheep milk.
Price of substitute  There are few substitute exist in
the market, but all of the
substitute are of high quality or
really expensive in price.
 Reasonably, company runs
business where cow milk price
is low than other milk
substituted available like goat
milk.
 Due to this reason there is very
less chances buyers switch to
substitute products.
 Threat of substitute products is
weak within this industry.
Is it easy for customers to  As we discuss above other
move towards substitute substitute available with high
products? quality, or high level of process.
That’s why it is not easy for
customers easily move toward
substitute product.
 Here it is a benefit for
company, if they will provide
differentiate products to
customers they will not move
towards substitute.

Rivalry among existing firms

If the competition among the current companies in an industry is extreme, at that point it will
drive down costs and lessening the general productivity of the business. Dhoodhwala works in a
serious Retail industry. This type of rivalry among firms affects the general long term benefit of
the company. The number of rivals in the business where Dhoodhwala works is not many. The
greater parts of these are likewise huge in size. This implies firms in the business won't make
moves without being unnoticed. This makes the conflict among existing firms a more delicate
power inside the business.

The fixed costs are high within the industry in which Dhoodwala Company run their business.
This makes the companies within the industry to move forward to complete ability. This
moreover means these companies to decrease their prices when demand slackens. This makes the
rivalry among existing firms a stronger force within the industry. The go out barriers within the
industry are mainly high due to high capital required in capital and assets to run. The exit barriers
are also high due to government regulations and restrictions. This makes firms within the
industry unwilling to leave the business, and these continue to create even at low profits. This
makes the rivalry among existing firms a stronger force within the industry.

The items created inside the business where Company Limited works are intensely differentiate.
Consequently, it is hard for competitors firms to win the customers of one another as a result of
every one of their items in one of a kind. This makes the competition among existing firms a
more weak power inside the business.

The systems of the organizations inside the business are diverse, which implies they are
remarkable to one another as far as methodology. This outcomes in them running head-on into
one another in regards to system. This makes the competition among existing firms a hard power
inside the business.

Below mention ways through company can tackle rivalry threat

 Company must create unique products so more than its competitors, so that customers do
not focus on competitor’s services or products, or competitor’s action cannot affect
company profit.
 As the business is rising or developing, Company can concentrate on new clients as
opposed to winning the ones from existing organizations.
 Company must conduct research for take customers opinion or demand as well takes idea
of supply-chain demand. Or do not produce overproduction products.