Engro Foods Ltd. is a subsidiary of Engro Corporation Ltd., a holdings company with majoritystakes in fertilizer and chemicals industry. Engro Foods was incorporated on April 26th, 2005 asa part of diversification strategy at Engro Corporation. The principal activity of Engro Foods is tomanufacture process and sell dairy, ice-cream, juices and frozen desserts. Engro Foodslaunched its flagship brand Olpers all-purpose Milk in 2006 and received phenomenal success.Its flagship Ultra high Temperature Processed milk brand has managed to capture the marketshare of close to 43 percent by early 2012.The remarkable success of Engro Foods lies in the fact that Pakistan is the 4th largest Milkproducing country in the world and there are few Companies in the market. Milk industry inPakistan has great prospects for growth. Packaged milk only has around 9% market share rest is just unbranded open/lose milk sold by dairy farmers directly to the consumers or distributorswho sell it to consumers. Pakistan milk industry volume comprising different dairy is estimatedto be approx. US$26 billion.Food industry is a growth industry in Pakistan with immense potential for growth promptingthe high threat of entry. Engro Foods was able to gain a big market share due to a set of interrelated resources and capabilities such as an extensive milk collection network and abilityto innovate new products which are well received by the consumers and became an instant hit.Engro Foods has many strategic options to create competitive advantage over its rivals such asrelated diversification of its products to capture market share of the open/lose milk. Anotheroption is to adopt un-related diversification by introducing products in those segments of foodindustry where Engro Foods currently does not operate. Lastly, Engro foods should adoptbackward integration by expanding acquiring/establishing a dairy farm which provides it with asteady supply of high quality raw material.