Lembu Dairy: Beyond milk

• Main Authors: LOH, Patrick, FAN, Terence P. C.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: Dairy; strategy; cost-benefit; business development; diversification; new product line; vertical integration; new business development; Asian Studies; Marketing; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/152; https://cmp.smu.edu.sg/case/2401
• Institution: Singapore Management University

It is July 2015, and Lembu Dairy, the fourth largest dairy producer in Malaysia, faces stiff competition in its retail production business. Although it performs well the in wholesale milk trade, it lacks its rivals’ extensive and long-standing marketing prowess. Patrick Heng Meng Loh, a seasoned investor, is thinking of partnering with Lembu Dairy to develop a new line of dairy products for the company. He believes that a strategic investment into Lembu Dairy could be worthwhile and wants to leverage his expertise to recommend a unique new product line to Lembu Dairy that would increase the company’s ability to value-add while improving the bottom-line. However, before Loh can take an equity stake in the company, he must first make a strong business case for developing a new retail product while also positioning himself as a more strategic partner for Lembu Dairy. This case is suitable for strategy and entrepreneurship courses at the undergraduate level, or for an introductory course in business at the graduate level. The case asks students to evaluate potential business opportunities for an existing business, where each of these opportunities should be evaluated as stand-alone businesses from the perspective of the protagonist, an outside investor.