Instructions

Students are advised to read the Lactalis case carefully so they can most effectively contribute to seeking out and analysing the necessary data to address the questions posed in the study.

Students who can should bring their laptop or tablets to the class and the course instructor will create teams where each team has access to online data.

The instructor will review the various stages and steps that will be required by the class to find, break down and assess data found into a comprehensive response to the question posed by the case: should Lactalis expand their operations into India?

The Case

Should Lactalis Expand into the Indian Market?

Groupe Lactalis (http://www.lactalis.fr/en/) is one of the largest food producing companies in the world, with a focus on dairy products. Begun in France in 1933, it now has over 75,000 employees with operations in over 45 countries.

You have been asked by the President of Lactalis Inc. to provide some consulting (advisory) service. Lactalis is considering expanding their company into northern India and is looking for a feasibility study that will include macroeconomic analysis and estimates of market potentials for Lactalis products.

Lactalis has issued a challenge asking for recommendations on whether they should or should not strengthen their investment in one of the fastest growing economies of the world: India. You are going to consider the macroeconomic environment of India and its trends, and then examine the feasibility of establishing a formal presence for Lactalis in northern India. If you recommend that Lactalis should enter this market, then you must also list the various steps that it should take to ensure its success.Should you recommend that the market is not suitable, then you must present a strong argument as to why.

Part 1: Collecting data

To support their conclusions and recommendations, students will collect the latest available data on nominal GDP, real GDP, per capita real GDP, unemployment rate, inflation rate, interest rates, exchange rate(s), and any other important macroeconomic data. The first half of the class will be dedicated to getting this data.

A useful source of macro dataset students can use is https://fred.stlouisfed.org website, though students are encouraged to seek out as many different viable resources as possible. The instructor will show students how to download data from these websites. One suggested approach for this is to use "EDIT GRAPH" tool on the right side of the graphs in the FRED website and add variables of the United States, Canada or other countries alongside to compare.

In seeking out data, students should bear in mind the following questions:

1. How big is the Indian market? What is the real GDP?
2. What is the current state of the economy? Collect the latest available data on nominal GDP, real GDP, per capita real GDP, unemployment rate, inflation rate, interest rates, exchange rate(s), and any other important macroeconomic data.
3. How is this economy doing? What is the growth rate of the real GDP? What is the trend in this variable?
4. How fast is the per capita real GDP growing?
5. Is the country experiencing an inflationary or a recessionary gap?
6. What kind of macroeconomic policy should this country follow?
7. At what stage of the Business Cycle is this country presently in? Is there an inflationary or recessionary gap?
8. What kind of fiscal and monetary policies is this country presently following?Expansionary or contractionary?
9. What is the price elasticity of demand for dairy product in India? Is it elastic or inelastic?
10. Danone is another large dairy company that entered into India in 2012 and existed at 2018. Watch the video Why Big Dairy Companies Struggle In India from CNBC on YouTubehttps://www.youtube.com/watch?v=4mBiFEspcIM&t=223sand discuss what Lactalis should learn from Danone's experience?
11. What is the Income Elasticity of demand for dairy product in India?
12. Watch the video No Considerations: Doing Business in India from Marginal Revolution University on YouTube.https://www.youtube.com/watch?v=hsuWe8XQhN4&t=4sand discuss what other issues with regards to the social, political in India should be taken into consideration by Lactalis?