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 focu
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 the investment in one of the fastest-growing economies of the world: India. You are going to consider the macroeconomic
the environment of India and its trends, and then examine the feasibility of establishing a formal presence for Lactalis
northern India. If you recommend that Lactalis should enter this market, then you must also list the various steps
should take to ensure its success. Should you recommend that the market is not suitable, then you must present
Part 1: Collecting data
To support their conclusions and recommendations, students will collect the latest available data on nominal GDP
GDP, per capita real GDP, unemployment rate, inflation rate, interest rates, an exchange rate(s), and any other important
macroeconomic data.
How is this economy doing? What is the growth rate of the real GDP? What is the trend in this variable?
How fast is the per capita real GDP growth?
Is the country experiencing an inflationary or a recessionary gap?
What kind of macroeconomic policy should this country follow?
At what stage of the Business Cycle is this country presently in? Is there an inflationary or recessionary gap?
What kind of fiscal and monetary policies in this country presently following? Expansionary or contractionary?
What is the price elasticity of demand for dairy products in India? Is it elastic or inelastic?
Danone is another large dairy company that entered India in 2012 and exited at 2018. Watch the video Why
Dairy Companies Struggle In India from CNBC on YouTube https://www.youtube.com/watch?v=4mBiFEspcIM&t=
and discuss what Lactalis should learn from Danone’s experience?
What is the Income Elasticity of Demand for dairy products in India?
Watch the video No Considerations: Doing Business in India from Marginal Revolution University on YouTube.
https://www.youtube.com/watch?v=hsuWe8XQhN4&t=4s and discuss what other issues with regard to the social-political in India should be taken into consideration by Lactalis?
Part 2: Making a Recommendation
After finding, downloading data and plotting graphs using the built-in tool available in some of the websites, the co
the instructor will help students make sense of and analyze their data.
Having had students in teams each focus on different areas (or perhaps had multiple teams seek out the same da
independently of one another), the instructor will gather the teams to disseminate the information they have found
will lead the class to collectively develop an argument for and/or against the proposal to expand into India.
Required Materials