Lactalis SWOT and PESTLE Analysis

Strength

1. Differentiated geographic presence and policy of acquisitions empowers it to maintain stability and rapidly penetrate new markets: Lactalis is widely present across geographies. It operates, markets and sells products in over 94 countries with varied trends of demand for its products. It strongly believes in increasing its market share and geographic presence through acquisitions. The Group's growth strategy through acquisitions allows it to penetrate faster into new markets and create synergies with consolidated companies. In July 2019, the group acquired Kraft Heinz's "Natural Cheese" division, U.S. Yogurt division of Ehrmann Commonwealth Dairy and Itambe (4th most popular FMG brand with Brazilian consumers in the dairy segment). The acquisition of Itambe made Lactalis, Brazil's largest player in the dairy industry. This policy of acquisitions it has undertaken and its differentiated geographic presence has enabled it to counterbalance a downward trend in some areas with stability or growth in other market areas.

2. Good quality milk used in its dairy products, produced in-house, increases demand and consumer loyalty: The major credit for development of the Lactalis Group, a major player in the French, European and global dairy sector goes to milk producers whose future is secured through the growth of the Group. Milk production requires solid professional expertise and the capacity to adapt to market changes. The technicians and salespeople at Lactalis assist milk producers with the production process, in order to meet hygiene and quality standards inherent to processing and marketing milk and dairy products. The milk procurement department of the Group is responsible for managing and optimizing milk supplies on behalf of the various factories of the Group. In this way, the milk production is done under their direct supervision which helps to ensure that the milk produced is of good quality and that it healthy and hygienic.

The remaining section under "Strength"is available only in the 'Complete Report' on purchase.

Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Reliance on health of livestock and its supply: The dairy industry relies heavily on health of livestock and its supply. It is the backbone of the industry and all the companies that are related to it. Infestations, outbreaks and other animal diseases, especially relating to cattle particularly relating to cows and buffalos, will decrease the quality of milk and its supply, and if animals are slaughtered, will be adversely affected. Lactalis, being a leader, needs abundant supply of livestock and the supply of milk from it. If the above-mentioned factors come into existence, the business of the company will be adversely affected, with no alternatives available. The Company will suffer from losses in case of inclement weather or climate changes that will impact the health of livestock.

2. Environment in which a dairy company opts: The environment in which a dairy company operates is vital for its healthy functioning. In a hot environment, a dairy producer must consider storage measures so that they can increase the shelf life of the product without affecting its quality. Likewise, they may also explore how to enhance longevity in regions with regular power shortages in the cases of refrigerated or frozen foods. The environment also impacts the product lines in which the producer is involved. In warmer countries, for instance, frozen ice creams and desserts can be more popular, whereas tea whiteners or cheese will be better than ice creams in colder countries.