Case Studies of Organisational Resilience in the Co-operative Business Model
Edited by Tim Mazzarol, Sophie Reboud, Elena Mamouni Limnios and Delwyn Clark
Chapter 5: Challenge Dairy Co-operative, 2000-10: in pursuit of control of the last litre of milk
Formed in 1999, Challenge Dairy Co-operative (CDC) filled a niche in the Western Australian (WA) dairy industry by providing a valuable milk balancing1 role for other processors and processing surplus milk to the benefit of the entire industry. Despite holding this market position, the co-operative's joint venture (JV) with QAF Ltd of Singapore (named Challenge Australia Dairy, CAD) failed in 2010, resulting in the loss of CDC's manufacturing assets and its milk procurement role. The purpose of this chapter is, in part, to inform the project's research questions related to (a) board governance, not only at the co-operative level but also at the level of investment partnerships with other entities, and (b) inducements for member investment, particularly with reference to the development of an effective business plan to communicate to members. The chapter maps the series of organisational transformations Challenge Dairy Co-operative (CDC) underwent in its search for an effective partnership to execute its strategy of controlling and lifting the floor price of the last litre of milk produced in its industry. While the chapter fits best within the enterprise level of the conceptual framework proposed by the book, pertinent references are made to the macro environment as pertaining to market conditions and the mindset of members and potential members.
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