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should not. For example, some countries will prohibit milk that are not natural or some criteria needs to be fulfilled. This will discourage business and affect their profitability. However, to increase the profitability of business, China-Australia Free Trade Agreement (ChAFTA) was introduced in December 2015, aim to support economic growth, job creation and higher living standards. So this creates an opportunity for the company to grow and prosper (Austrade.gov.au, 2019).

Economic

Economic factor are determinants of a certain economy’s performance. This factor will have impact on how profitable the company is due to its purchasing power on consumers and demand/supply in the economy as well as how company price their product and services (B2U – Business-to-you.com, 2019). The Australia milk industry economic can be affect by some of the following factors such as growth rate, purchasing power of consumers and demand for milk. There are research that shows the demand for A2 Milk is gaining traction among consumers due to the health benefits (A2 Milk Market: Global Industry Trends, 2019). In addition, since consumers are adjusting their lifestyle, company such as Fonterra Co-operative Group Limited formed partnership with A2 Milk to further provide growth opportunities to benefit both players. The demand for milk gives the industry an opportunity to be more profitable (Ibisworld.com, 2019). Another factor is purchasing power of consumer. Increase in purchasing power means consumers have more income to purchase more milk to adjust to their healthy lifestyle. This will create an opportunity for A2 to earn more. However, Australia economy is experiencing a slow growth, this will cause the profitability to decrease. In addition, some parents prefers to breastfeed their child therefore, this creates a threat to the demand of infant milk.

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