Hence, there is an imperative need to re-engineer Pakistan’s dairy industry; both at farm and processor level. This paper seeks to investigate the tools that could bring about such change. We believe achieving the strategic change outlined in this paper for the dairy industry may prove challenging for at least some sectors. Major effort is required to achieve the scale and cost competitiveness necessary to continue to successfully compete in a globalising and demanding world, while at the same time the interests of the millions of smallholder farmers must be catered for, and a more prosperous future made.