Due to several limitations inherent to the cooperative model, the farmer producer company concept has garnered significant attention throughout India. Dairy farming, a subsidiary profession within Indian agriculture, has seen the emergence of dairy-based farmer producer companies as a means to connect farmers directly with consumers, involving primary producers in the value chain and thereby enhancing the income of dairy farmers. This study was conducted to delve into the key critical factors associated with dairy-based farmer producer companies and to establish an initial decision framework for their setup, execution, and management. Data were collected from various stakeholders in these companies, including dairy farmers, executives, and key informants of farmer producer companies, to assess the strengths, weaknesses, opportunities, and threats (SWOT) of dairy-based farmer producer companies. This involved identifying the objectives of each dairy-based farmer producer company, as well as both internal and external critical factors (CFs) affecting them. To determine the priorities of these identified CFs, the analytic hierarchy process (AHP) was employed, as SWOT analysis alone does not offer a systematic basis for evaluating CF priorities. Furthermore, the CFs were ranked in descending order of importance. The findings of this study highlight the significance of assessing both internal and external factors to ensure the long-term sustainability and viability of farmer producer companies, with a particular emphasis on the utilization of SWOT-based methodology for sensitivity analysis.