Galvanising Amul Sales

CAPSTONE final REPORT

INDEX
Topics

4.
5.
6.
7.
8.

1. Executive summary
2. Project objective
3. Dairy Industry In India
Introduction to Amul
SWOT Analysis Of Amul
Obj 1: business portfolio analysis
Obj2: Forecasting desired growth rate
Obj 3: strategies to achieve requird growth rate
a. Problem faced:
i)
Globalization
ii)
Competition
iii)
cost increase
b. growth factors
i)
production yield
ii)
supply chain
iii)
sales and distribution
iv)
exports
v)
price reduction
vi)
product innovation
vii)
marketing, adv and packaging
9. bibliography

EXECUTIVE SUMMARY

Pg No.
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5
6
9
11
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22
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23
25
26
28
29
31
32
33
35

Amul is a unique example of cooperative which has successfully established itself in dairy
products market which is quite commendable. Amul is the largest co-operative movement in
India with 2.8 million milk producers organized in 10,552 co-operative societies and 2.15 billion
turnover in 2010-2011. The country's largest food company, Amul, is the market leader in butter,
whole milk, cheese, ice cream, dairy whitener, condensed milk, saturated fats and long life milk.
Amul follows a unique business model, which aims at providing 'value for money' products to its
consumers, while protecting the interests of the milk-producing farmers who are its suppliers as
well as its owners. Despite being a farmers' co-operative, Amul has given multinationals a run
for their money.
During the financial year 2010-11, GCMMF registered impressive topline growth of 22.1%,
achieving turnover of Rs. 9774 crore. This performance is even more remarkable, when viewed
from the perspective that the organization was able to achieve 1 billion dollar turnover in the
33rd year of its formation while it took only just four more years to add another 1 billion dollar
to its turnover. Turnover of GCMMF registered CAGR of 23% during the last 4 years. During
the year 2010-11, GCMMF paid Rs. 8345 crore to its 30 lakhs farmer members. Payout to
farmers also registered 23% CAGR in last 4 years.
So, through this project we attempt to do the portfolio analysis of the wide range of products, and
its SWOT analysis to find out the current status of AMUL. Further suggest the growth strategies
for the potential products to galvanize its sales to 20,000 in 5 years from 9774 crore.

Project objective:
The projects objective is

To analyze business portfolio of each product line.

To forecast the desired year by year growth rate required to achieve target of Rs. 20,000
cr in 5 years
To suggest strategies to achieve the above mentioned growth rate.

Dairy industry in India

During the pre-independence era, public and private agencies dominated the dairy industry,
although government policy did not favour any one organizational form. Early efforts to organize
dairying along cooperative lines were made immediately after the enactment of the Cooperative
Societies Act, 1912. The present day Anand Pattern dairy cooperatives trace its origin to the
establishment of a dairy cooperative at Anand in 1946 under the direction and guidance of Sardar
Vallabhbhai Patel. The dairy farmers of the then Kheda District of Gujarat organized themselves
to form a dairy cooperative in order to directly undertake sale and processing of milk collected
from member dairy farmers of the district.
The government of India took some steps to improve the quality of milch animals and their
productivity through the Key Village Scheme. During the two decades between 1951 and 1970,
milk production grew by barely 1 per cent annually, while per capita milk availability declined
by an equivalent amount.
During the 1960s, various state governments tried different strategies to develop dairying,
including establishing dairies run by their own departments, setting up cattle colonies in urban
areas, and organizing milk schemes. Almost invariably, dairy processing plants were built in
cities rather than in the milk sheds where milk was produced. This urban orientation to milk
production led to the establishment of cattle colonies in Mumbai, Calcutta, and Madras. The
objective was to meet the demand for milk and milk products in big cities through improvements
in milk collection, processing, and distribution.
The Operation Flood (OF) programme implemented by the National Dairy Development Board
(NDDB) from 1970 to 1996 played the key role in bringing about the transformation in dairy
development in the country. The OF programme established milk producers cooperatives in
villages and made modern technology available to them. The broad objectives were to increase
milk production ("a flood of milk"), augment rural incomes, and transfer to milk producers the
profits of milk marketing that were hitherto enjoyed by well-to-do middlemen.

INTRODUCTION: AMUL
Amul was set up in 1946 and its full form is Anand Milk- producers Union Ltd. It is an
organisation which focuses on the promotion of the interests of its members in accordance with
the principles of co-operation.
Amul followed a unique business model, which aimed at providing 'value for money' products
to its consumers, while protecting the interests of the milk-producing farmers who were its
suppliers as well as its owners. Amul bought all the milk offered by the milk producer, made
timely payment, and shared with the producers the profit generated from marketing the milk and
milk products under the Amul brand name.
The management of the brand name is done by the Gujarat Co- operative Milk Marketing
Federation Ltd (GCMMF) which is a cooperative organization.
Location:
Amul is located in town Anand which is in the state of Gujarat and it has set up itself as a model
for development in the rural areas. For Amul Brand has started the Revolution White of India
which has helped to make the country the biggest manufacturer of milk and its by products in the
whole world. Amul has around 2.8 million producer members and the total capacity for handling
milk is around 10.16 million liters every day. The brand's capacity for milk drying is around 594
Mts. each day and its capacity for cattle feed manufacturing is about 2640 Mts each day
Background note:
Amul's genesis was linked to the freedom movement in India. Sardar Vallabhbhai Patel, an
eminent Indian freedom fighter encouraged the dairy farmers from the Kaira district in Gujarat to
form a cooperative to counter the 'exploitatively' low prices offered for their milk by the
monopoly milk supplier of the area, Polson's Dairy. The dairy farmers met in Samarkha (Kaira
district, Gujarat) on the 4th of January 1946, and decided to set up a milk producers' cooperative
that would deal directly with the Bombay government, the final buyer of their milk. This was the
origin of the Anand model.
Initially, when the Bombay government refused to deal with the cooperative, the farmers called a
strike. The government finally relented when Bombay went without milk for a fortnight. The
successful union registered itself as the Kaira District Cooperative Milk Producers' Union Ltd.
(KCMPUL), Anand, in Gujarat in December 1946.
Under the chairmanship of Tribhuvandas Patel (Patel), the Kaira Union, headquartered in Anand,
began with two milk societies, and a daily milk collection of 250 litres. When it started
operations, the cooperative included two tiers. At the base was the primary village dairy
cooperative society (DCS) of milk producers. Several such village cooperatives together formed
the district milk producers' union at the second level, which was entrusted with procurement and

processing of milk. By appointing qualified technologists and professional managers, the

cooperatives helped the farmers to leverage modern management practices and technology.
Varghese Kurien's (Kurien) association with KCMPUL began soon after the inception of the
cooperative
Portfolio:
Amul is the biggest brand in the pouched milk sector in the world and in India it is the biggest
food brand. Amul's range of products includes milk, ghee, milk powders, curd, ice cream, paneer,
cream, chocolate, cheese, butter, and shrikhand.
In butter, cheese and saturated fats, Amul has remained the undisputed market leader since its
inception in 1955, by offering quality products at competitive prices. In other categories, Amul
has nullified its late mover disadvantage through aggressive pricing, better quality, innovative
promotion, and superior distribution

The various brands of Amul's bread spreads are Amul Lite, Amul Butter, and Delicious Table
Margarine.

The Brand Amul's milk drinks are sold under various names such as Amul Kool, Amul
Kool Cafe, Kool Koko, Amul Kool Chocolate Milk, and Amul Masti Spiced Buttermilk.

Amul's powder milk is sold under many names like Amulya Dairy Whitener, Sugar
Tea Coffee Whitener, Sugar Skimmed Milk Powder, and Amul Instant Full Cream Milk
Powder.

The brand's cheese is also sold under various names such as Gouda Cheese, Amul
Cheese Spreads, and Amul Emmental Cheese.

Amul Brand's desserts are sold under many names like Amul Basundi, Amul Lassee,
Gulab Jamun Mix, Amul Shrikhand, and Amul Ice Creams.

Business markets:
Amul exports its products to various countries such as USA, Australia, Mauritius, China, Hong
Kong, Singapore, UAE, and Bangladesh
Organization structure:
The cooperative model pioneered by Amul - a union of primary village dairy cooperatives- came
to be known as the "Anand pattern" cooperative system. It was a three-tier structure that
comprised village societies, district level dairy unions and a state level federation.
Each tier was economically independent of the others and comprised representatives elected
from the tier below it. The organizations at each level were governed by their own bylaws, and

were managed by democratically elected boards. The primary milk producers democratically
govern this entire federal cooperative structure to ensure that the higher-tier organizations serve
the purpose of the lower levels and that the gains at all levels flow back to the milk producers in
significant measure.
Under the Anand Pattern structure, individual farmers are joined in village-level dairy
cooperative societies (DCS), which are joined to form district-level unions, which in turn are
joined in state-level marketing federations. In each state, the Anand Pattern features:

decentralized milk production by the small milk producers;

milk procurement by the village-level dairy cooperative societies;

centralized milk processing by the district-level unions; and

marketing of milk and milk products by the state-level federation.

The value added at the procurement and processing stages can be realized by the cooperatives
only through control over marketing, which is therefore an essential requirement for success. In
contrast, many dairy cooperatives worldwide end up as suppliers of raw material to private
companies that own the brands and control marketing. By cutting out the need for middlemen in
procuring and selling milk, the Anand Pattern cooperatives have helped to reduce seasonal price
variations and have enabled the farmers to enjoy the fruits of their labour instead of surrendering
most of the profit to corrupt and exploitative middlemen.
Pricing:
Amul's philosophy had all along been to deliver value for money to its customers. Despite being
priced economically, Amul maintained its product quality.
Distribution:
GCMMF's formidable distribution network comprised 300 stock keeping units, 46 sales offices,
3,000 distributors, 100,000 retailers with refrigerators, an 18,000-strong cold chain, and 500,000
non-refrigerated retail outlets
Adv and sales promotion:
Over the years, Amul's advertising philosophy had been "to be simple, fresh and innovative". The
clean, emotion-based ads refrained from using hi-tech special effects, and aimed at maintaining
the perfect balance between the traditional and the modern...
Looking ahead:

The liberalization of the dairy industry in 1991 had seen a number of multinational players like
Britannia,
Le
Bon,
Dabon
and
Hi-Life
enter
the
sector.
Analysts wondered whether a co-operative with limited financial means could stand up to the
might of these MNCs, and if its low pricing strategy would continue to stay relevant. MNCs like
Pizza Hut, Domino's, Hindustan Lever Limited and Cadbury had also become competitors. Amul
had proved its detractors wrong and firmed up ambitious growth plan

Objective 1: BUSINESS PORTFOLIO ANALYSIS:

In India, Gujarat Cooperative Milk Marketing Federation (GCMMF) with the Amul brand
continues to be the main. About 45% of milk production is consumed as fluid milk. About 35%
is processed into butter or ghee; about 7 % is processed into Paneer(cottage cheese) and other
cheeses, about 4% is converted into milk powder; and the balance is used for other products
such as Dahi (yoghurt ) and sweet meats

Amul Fresh Milk

Introduction: Network of 2.8 million village level producers and 13,328 Village Dairy Co-op
Societies (VDCS). Average collection of 8.4 million litres per day and affiliated to 13 District
Co-op Milk producers union. All dairies are ISO 9001-2000, ISO 22000, HACCP certified.
Special features: Amul milk is the most hygienic liquid milk available in the market. it is
pasteurised in state-of-the-art processing plants and pouch-packed to make it conveniently
available to consumers.

Products: AMUL fresh milk, AMUL Gold milk, AMUL Taaza Double Toned milk, AMUL Lite
Slim and Trim milk, AMUL Shakti Toned milk, AMUL Calci+, AMUL fresh cream
SWOT Analysis:
Strengths: Worlds largest pouched milk brand, Good quality and affordable pricing,
Good product mix, Diverse range of products, Good distribution network, AMULs brand
image,
Weakness: Highly complex supply chain, Dependence on suppliers (farmers) who are not
a part of the organized sector
Opportunities: Penetrate international market, rural market, huge potential for expansion,
New product launches
Threats: Intense competition from Britannia, Nestle, Mother Dairy, Local Cooperatives,
Rising prices of milk, Youth do not relate to milk as a hap drink, Rising prices of
production of milk like unavailability of cattle feed
Recommendations
AMUL could expand to rural markets. As the disposable income in rural India is increasing there
is increasing demand for value-added food products.
Promotions through TV and radio channels which reach the rural areas. AMUL could expand to
emerging markets of small towns. AMUL could introduce new products.

Amul Milk Drinks

Introduction: Amul is all set to further consolidate its position in the beverages market with the
introduction of milk shake under brand name Amul is all set to further consolidate its position in
the beverages market with the introduction of milk shake under brand name Amul Kool Milk
Shake in 4 exciting flavors Banana, Mango, Strawberry and Badam. Amul Kool Millk Shake,
targeted at youth & teenagers, is the balanced blend of best quality fruit solids (Banana, Mango,
Strawberry) and goodness of milk. Priced at Rs. 22/- for a 220 ml. in convenient & stylish world
class Can packing.
Products: The Brand Amul's milk drinks are sold under various names such as Amul Kool, Amul
Kool Cafe, Kool Koko, Amul Kool Chocolate Milk, and Amul Masti Spiced Buttermilk, Health
Drinks.

SWOT Analysis
Strength: Good product range, Good advertising and packaging
Opportunity: Pet bottles, Tie-ups with colleges/institutions, Replacement for aerated
drinks, create consumer awareness for health drinks
Weakness: Not enough brand visibility
Threats: Soft drinks as indirect competition , Aarey Energy Milk/ Lassi, MTR Milk,
Local Milk brands
Recommendation/analysis:
The market for health food drinks is a whopping 60,000 tonnes, and traditionally, the market for
white beverages is much larger than for cocoa-based drinks. GCMMF is eyeing 10 per cent
volume share of the market within 90 days of launch and becoming the market leader in this
category within three years. The plans appear ambitious since the white health food drink
market, estimated to be at Rs 900 crore, is already saturated and kids (the main target consumers)
prefer brown beverages that contain cocoa. Also, the health food drink industry, as a whole,
appears to be facing a slowdown, the market leader in the white health food drink category, had
to be relaunched last year with the new positioning as a drink for youth against the earlier thrust
on convalescents, and other brands in the white drinks category also appear to be facing a tough
market.Amul Shakti is being positioned as a milk food that has "real milk for real nourishment"
and it has to l provide the brand mass media support to create consumer awareness.

Ice cream: (real milk ice cream)

Introduction: the target segment of this product is Quality conscious children and adults and has
positioned itself as Premium Ice Cream made in various varieties and flavors with dry fruits and
nuts. Various verities of Ice Cream can be made from the basic mix by addition of required
amount of permissible colors and flavors
Products: vanilla royal, royal treat range, natures treat, assorted treat, utterly delicious, sundae
range, nut-o-mania
SWOT analysis:
Strength: Good product range, good quality and packaging
Weakness: Not enough brand visibility, Less advertising

Opportunity: High End ice-cream, Tie-up with food chains, Mobile vans for better visibility
Threat: Kulfi in rural markets, Local ice creams and sweet dishes

Competitors: Kwality Walls, Baskin Robbins, Vadilal

Recommendation/ analysis:

If there is any provision of installments to purchase freezer then many customer can be
attracted to keep Amul ice cream because many customer are not able to invest huge amount
of 15,000 20,000 at a time.
Market in this sector is not exploited much by any other competitors so, its the favorable
opportunity for the company to initiate and take the lead and capture the market by giving
some relaxations to the customer.
As there are various colonies in this sector, thus pushcarts can also be introduced in this
sector to increase the penetration

BREAD SPREAD: (utterly butterly delicious amul)

Introduction: most trusted butter brand, Launched in 1955, butter was one of the first milk
products offered by Amul. It was also the first time Amul successfully challenged the hegemony
of an established brand. Amul's earliest competitor, Polson had been the monopoly milk supplier
to the Bombay Milk Scheme. Amul displaced Polson to emerge as the undispute d leader in the
butter market. It targets Health and quality conscious people of Lower, middle and upper class.
Products: Amul Butter, Amul Lite Low Fat Bread spread, Amul Cooking Butter
SWOT analysis:
Strength: Creative advertising with Amul Baby, High brand presence, High visibility, Excellent
product quality and trusted name, Affordable price
Weakness: Some people dont prefer butter form cows milk and prefer local homemade butter
Opportunity: Smaller packages, No frills packaging for rural customers at lower cost
Threats: Local butter manufacturers, Low Fat Low cholesterol butters like Nutalite

Competitors: Britannia Dairy butter, Nestle Butter

Recommendation/analysis:
Amul has used the hoardings and advertising to perfection. Taking cues from new films,
celebrities, the creatives are fun to watch. More over Amul has sticked with the creative
messages throughout. The Amul brand is that they have been consistent over the communication
campaign and brand strategy. AMUL has positioned itself as Taste of India and have ensured
that their communication is in line with their positioning strategy. The Amul girl who lends
herself so completely to Amul butter, created as a rival to the Polson butter girl. Thus creating a
creative and positioned as leader now its time to plan to enter into foreign market by spending
the amount on R&D and trying to reduce prices by maintaining the same quality and image
which will help it to face competition and enter into other market at competitive prices.

Cheese:
Introduction: GCMMF launched processed cheese in 1959 followed by cheese powder in the
early 1970s. It pioneered the market for processed, branded cheese. GCMMF developed the
technology to make cheese from buffalo milk. World over it is made from cow milk. GCMMF
has a wide range of products in the processed cheese segment. Its cheese business grew at 18%
in 2005-2006. GCMMF exports cheese to the tune of 600 tons, making it the largest cheese
exporter in the country. Its USP is quality.
Products: Amul Pasteurized Processed Cheddar Cheese ,Amul Processed Cheese Spread, Amul
Pizza (Mozzarella) Cheese, Amul Shredded Pizza Cheese, Amul Gouda Cheese, Amul Malai
Paneer (cottage cheese), Frozen, Refrigerated and Tinned ,utterly Delicious Pizza, Amul
Emmental Cheese
SWOT analysis:
Strength: Creative advertising, High brand presence, High visibility, Excellent product quality
and trusted name
Weakness: Low product range/ taste
Opportunity: Smaller packages, No frills packaging for rural customers at lower cost, Newer
tastes/varieties, Tie up with restaurants/food chains/pizza parlors
Threats: Growing market share of other players
Competitors: Britannia Cheese, Britannia Industries, Dynamix Dairy Industries (DDI),
Hiranandani, ETA and Metro.

Recommendation/ analysis: The Amul brand represents 'value for money' to the Indian
consumer and its cheese portfolio is competitively priced and of assured quality. The company
has been aggressively marketing its cheese products, to the extent of even moving away from its
umbrella brand strategy and introducing a new mascot, the Amul Cheese Boy. When low cost
pizzas were introduced, GCMMF adopted an innovative and successful strategy of increasing
sales of an elitist product (cheese) by reducing the price of another elitist product (pizzas).
Especially since 2005, the company has focused on expanding its already strong distribution
network to smaller cities as cheese demand has rapidly expanded beyond the large metros.

Chocolates: (taste of India)

Introduction:
Amul is known for quality and affordability. Chocolate market is estimated to be around 1500
crore (AC Nielson) growing at 18-20% per annum. The per capita consumption of chocolate in
India is 300 gram compared with 1.9 kilograms in developed markets. Amul entered in
chocolates segment in 1970. Over 70 per cent of the consumption takes place in the urban
markets. The target segment is Quality conscious children and adults and positions itself as Taste
of India by giving them quality products
Products: Milk Chocolate, Fun doo Milk Chocolate, Dark Chocolate, Fruit & Nut, Almond bar
SWOT analysis:
Strength: Good product range, Good quality and packaging
Weakness: Not enough brand visibility, Less advertising
Opportunity: Tie-ups with celebrities, Special occasion packages
Threat: Local sweet dishes
Competitors: Cadburys, Nestle, Mars(with all its child brands)
Recommendations/ Analysis:
Amul should Rejuvenate and strengthen the existing brands by extending its reach to semi-urban
and rural markets. Sell its products through 'non-traditional' outlets like music stores (such as
Music World), malls, renowned bookstores and popular apparel outlets (such as Pantaloons
and Wills Sport boutiques).

DESSERTS
Introduction: Deserts market in India is growing at around CAGR of 13-15%. Amul has very
less contribution from this category towards its profit (5 %). The company is trying to change its
marketing strategy and try to fill the Gaps available by launching new products and spending on
its R&D so that it can improve the quality and produce at less prices which help it to give
compete with local players

Products: amul mithaee mate, gulab jamun, shrikhand, kulfi mix, amul basundi, asvar ladoo,
amarkhand,amul flaayyo yoghurt.
SWOT ANALYSIS:
Strength: Technical Manpower, Demand, Margins
Weakness: Perishability, Competition, Substitute Products availability
Opportunities: Flexibility in market, Export potential
Threats:

Local Milk Vendor

Competitors: substitute products and growth potential which attract other market players to
enter in this market The main competitors are Haldiram ,MTR and Local Players in this
category..
Recommendation/ Analysis: Expansion of distribution network, creative marketing, consumer
education and product innovation, will leverage effectively on rising income levels and growing
affluence among Indian consumers. Tapping the rising demand for new value-added products.
Due to increasing demand and changing consumption pattern there is a large potential for future
growth in this category.

Products For cooking

Ghee: this is white ghee. It comes in metal cans. The ghee is very white, which is not good. The
ingredients simply say it is made from milk, but it does not say cow's milk. This might be buffalo
ghee. It is also not liquid at room temperature. It is inorganic. This is available throughout India.
It is the largest selling ghee product of amul. It is a regional product of amul and is promoted
before every festival to build its demand. Sagar ghee is being promoted on a value for money
platform.

Products: Amul Ghee, Sagar Ghee (made from fresh cream), Amul Yellow(Cow) Ghee
Amul paneer:
Amul is the market leader in the organized sector for milk products with over 50% market share.
Presently it is the only national brand that makes paneer right now. In 2009 they opened a new
state of the art manufacturing facility at Khatraj near Mehmedabad which increased its
manufacturing capacity from 1000 to 8000 tonnes per year thus increasing the shelf life of the
paneer and also will help reach farther areas. To reach the economies of scale the whey powder
produced as by product has been planned to be used to produce health supplement powder.
The basic product features are:It is the most convenient form of paneer which is rich in proteins.
It has high fat and low moisture than loose paneer available in market.
Paneer has smooth, uniform texture and softness.
SWOT analysis:
Strength: Brand name, Availability, Presence in dice form
Weakness: No advertisement, Replacement problems, Lack of awareness, Lack of coordination
between distributors and retailers, uneducated salesmen
Opportunities: Availability blocks paneer of 500gm and 1kg, Poor coordination and distribution
of local brands.
Threat: Competing brands (Warana Vijaya), Emerging brands (nestle, mother dairy paneer)
Dahi
Dahi or Curd plays a key role in the Indian diet and in preparation of delicious dishes. It is ideal meal
accompaniment and is delicious as well as nutritious by itself too. It is also used to marinate veg. and nonveg. dishes. Dahi is well known for its nutritive values.
Products: Masti Dahi, Amul Probiotic Dahi, Amul Flavvyo Yogurt
SWOT analysis:
Strengths: Brand name, Availability in various sizes
Weakness: Lack of advertisement, Limited availability of Amul yogurt, Lack of awareness of probiotic
Dahi, Lack of coordination between distributors and retailers, Uneducated salesmen, Highly perishable
Opportunity: Poor coordination and distribution of local brands.

Threats: Competitive Brands available (Britannia, Mother dairy, Nestle), People prefer dahi from local
milkmen

Amul Pizza
Amul currently sells about 3,500 tonnes of cheese annually, which translates into a 70 percent market
share. Of this tonnage, mozzarella cheese - the semi-soft, high-moisture, unripened variety used for pizza
making - accounts for roughly 700-800 tonnes. Amul has targeted opening 3,000 pizza retail franchise
outlets all over the country by the year's end. This is expected to boost the company's annual sales of
mozzarella cheese alone by more than 4,000 tonnes.
Recommendation/ analysis:
Amul was successfully able to launch the Pizza, Amul had an advantage with regard to Pricing too but the
product failed due to the following reasons. The problem it had was of winning the trust of the consumer
over the quality and freshness of the Pizzas as they were frozen and were manufactured quite a few days
back. Packaging, tastes and franchisee model were also questionable.
Amul Soup
THE Gujarat Co-operative Milk Marketing Federation (GCMMF),rolled out a range of heat-and-serve
soups. Interestingly, the heat-and-serve soups were sold under the brand name Masti, and not Amul.

Masti soup was introduced in two flavors - hot & sour and tomato to begin with, and is likely
to be extended to vegetable and sweet corn flavors subsequently. GCMMF is producing the
soups in its Gandhinagar Mother Dairy facility.
Powdered Milk
AMULYA
Amulya, a premium Dairy Whitener from the house of Amul is the favourite choice of all Tea
and Coffee lovers across India. Ideal for preparing Tea, Coffee, Sweets, Curd, Cakes and Other
Milk Based Products.
AMUL MILK SPRAY
Amulspray is an Infant Milk Substitute and falls under The Infant Milk Substitutes, Feeding
Bottles and Infant Foods (Regulation of Production, Supply and Distribution Act 1992).
SAGAR SKIMMED MILK POWDER
Sagar Skimmed Milk Powder (Spray Dried)is made from Skimmed Milk. Sagar SMP is a non-fat
, protein rich milk powder

Amul Products in the BCG Matrix:

Strategy to Market items in Question marks:

MastiDahi/Lassi/Mithai range:
a. Amul needs to build up a chain of retail outlets for exclusively Amul products. Mother Dairy is doing very well
in Delhi and Haryana with that mode of supply chain

b. There is no marketing focus on these products. The Utterly Butterly Delicious is focused only on the butter. In
fact Amul is synonyms with butter and milk which are its cash-cows. The marketing and consumer awareness
now needs to shift to other products if Amul wishes to increase the market share of the same.
c. Poor media marketing through print/television/online. Amul needs to improve its consumer reach. It needs
to come out of the Utterly Butterly Delicious shell.
d. Amul needs to adopt stronger and scalable marketing campaigns. Sponsoring for sports can enhance its brand
awareness from being a lot cost daily need products to upscale luxurious or nutrient rich supplementary items.

Future strategy for Dogs products

:a.the availability of infant milk range is very poor for Amul products, it should be improved

Objective 2: To forecast the desired year by year growth rate required to

achieve target of Rs. 20,000 cr in 5 years
The AMUL cooperative is a unique example which has managed to not only sustain itself for so
long, but also mark itself as the status of worlds leading milk producer and achieve a current
turnover of 9774 crore. Given below are the sales and growth rates of past 8 years.

years
2004
sales (in
crs)
2881
growth (
%)
5

200
5
292
2

200
6
377
3

1.4

29

200
7
427
7
13.
4

200
8
525
5
22.
9

200
9
671
1
27.7

201
0
800
5
19.
3

201
1
977
4
22.
1

However, it is unclear whether AMULs strategy and practices that have worked well for long
can maintain this growth trajectory in a changing environment with globalization and increased
competition. So, to double its sales and achieve the desired target of 20,000 crore in next five
years, AMUL will have to maintain growth rate of 15 % as per our calculation below.

F.V =
P.V ( in Rs
crs)
F.V (in Rs.
Crs)
years(t)
%growth(g)

P.V*(1+g)^t
9774
20000
5
15.3962065

Objective 3: To suggest strategies to achieve the above mentioned growth rate.

The world demand for dairy products is growing by app. 8% per annum and the projected
demand is of 190 million tons of milk by 2015. So, to achieve that, the milk production has
to grow by double the current growth (4%)
So we understand that there is huge demand potential, and thus, there should not be much
problem for AMUL to double its revenue in the next 5 years, provided it maintains a growth rate
of 15.4 % per annum. But maintaining the growth rate of 15.4 % is also a great challenge
(Which is lower than current growth rate of 22%. The main reason behind this increased growth
rate is the sudden price rise which happened because of the inflation post recession and not
because of volume growth.). Here are some problems it will have to find solution to:

Globalization: With the opening up of the economy preferential treatments of

yesteryears are no more available to the dairy cooperatives. They are now required to
compete in the open market. The terms of the World Trade dictates removal of all
safeguards put in place earlier to protect the dairy industry from unfair outside
competition. As a result, gradually internationalization of our dairy business is taking
place. This transformation demands the AMUL to improve its performance; be it in
marketing or quality of products or governance. Some suggested areas of improvement
are:

Competition: since the gap between demand and supply is large, there is huge potential
for dairy industry to grow. This will attract many other players to enter the market, or the

existing players to expand, and take advantage of the increasing demand to make huge
profits and grow. So, AMUL needs to capture this growth opportunity and cater to more
and more growing needs of milk and milk products, before this great opportunity is
captured by another player.
This can only be done if it expands it wings to other parts of the country as well. Besides
catering to domestic dairy needs, it also has a scope of increasing its revenue by capturing
global market. To achieve this, AMUL can leverage its brand value and experience in
milk products category.
The major players in Indian dairy industry and their markt shares are:
Gujarat Cooperative Milk Marketing Federation
Kerala Cooperative Milk Marketing Federation
Mother Dairy Fruit & Vegetable Pvt. Ltd.
Others

32.5%
9.7%
9.6%
48.1%

Nestle India Ltd, although having a small market share currently, is showing a high
growth rate of around 23% giving tough competition to AMUL.
As a competitor KCMMF is a major threat so a comparison between growth rates of the
two companies can give a clear picture regarding two companies.

Year

2004-2005

GCMMF

KCMMF

Growth rate

Growth rate

6
.
5
4
2
4
7

2005-2006

1.4

7.58709

2006-2007

29

4.246801

2007-2008

13.4

6.385542

2008-2009

22.9

14.57121

2009-2010

27.7

19.6314

Apart from this various competitors include the manufacturers who produce products
which could replace milk like soft drink manufacturers etc.
Increasing cost leading to price rise
a) Decreasing productivity: In recent years there have been constant draughts and thus a
decrease in productivity of agricultural products leading to a mismatch between the demand and
supply of these agricultural products needed for Amuls production process. This is easily
apparent from the fact that the headline food inflation touched 20% during 2010-11.
b) Steep price rise of cattle feed ingredients: Increase in cost of agricultural products has led to
increase in cattle feed ingredients prices like prices of de-oiled rice bran which constitutes 2535% of cattle feed have increased from Rs 3483/MT in 2005-06 to Rs. 6380/MT in 2009-10 (83%
increase), prices of molasses which constitutes 10-12% of cattle-feed have increased from Rs.
3546/MT in 2005-06 to Rs. 8448/MT in 2009-10 (138%increase), prices of Rapeseed extraction
which constitutes 10-12% of cattle-feed have increased from Rs. 5141/MT in 2005-06 to Rs.
11781/MT in 2009-10 (131% increase), prices of Rice Polish which constitutes 10-12% of cattlefeed have increased from Rs. 5612/MT in 2005-06 to Rs. 9630/MT in 2009-10 (72% increase),
prices of Jowar which constitutes 10-12% of cattle-feed have increased from Rs. 5918/MT in
2005-06 to Rs. 9157/MT in 2009-10 (55% increase). The price rise in these raw materials has
been particularly severe in the last year with prices increasing in the range of 25-35%. This has
put tremendous cost burden on the milk producers.
c) Taxes: The government is contemplating introduction of uniform GST(Goods and Service
Taxes) across the country. But then there are various products like Baby milk food, butter, ghee,
cheese, ice cream etc. which have with changing environment become products of mass
consumption, but the government is keen on putting VAT(Value Added Tax) at 12.5% in all states
on these products leading to extra burden on consumers of these products due to higher prices.

Thus categorizing dairy products in the category of 4% VAT will promote demand for dairy
products and thus promote nutrition.
Secondly the milk cooperatives are taxable under highest income tax bracket of 30% +cess,
although it is related to agricultural production.
d) Government policies: After a decrease in prices throughout the world earlier due to recession,
there had been a continuous rise in prices recently which brought speculation of high growth
rates. The butter prices doubled in a year and whole milk powder and skimmed milk powder
prices also increased by more than 90%. On the domestic front however, dairy farmers now face a
real squeeze from both the fronts; higher cost of production and threat of subsidised imports
flooding our dairy markets. When International prices of milk commodities increased to
unprecedented levels during 2007, Government banned exports of these commodities, which has
later been revoked while withdrawing the export incentives provided on exports of these
commodities, thus effectively closing the door on exports of milk commodities and not providing
the dairy farmers an opportunity to reap higher rates. Now in order to contain high inflation of
food products in the country, Government has completely removed import duty on 30000 MT
milk powder and 15000 MT of Butteroil / Butter with effect from March 2010. This will
jeopardise the returns of milk producers of the country while allowing developed nations to dump
their excess commodities backed by heavy subsidies.

Data monitor report for the forecasted growth of Indian Dairy Industry
Yr

growth %

2009 -

13.9%

2010 -

10.4%

2011 -

9.9%

2012 -

8.2%

2013 -

7.0%

2014 -

6.6%

This data suggests that growth in milk production in next 3-4 years is expected to slow down.

So, to overcome above mentioned roadblocks in front of AMUL to reach a revenue level of
20,000 cr, it needs to address following problems timely and efficiently. Only by addressing
these factors, AMUL will be able to keep competition at bay, and offer milk and dairy products at
competitive prices.
1) PRODUCTION YIELD: AMUL is currently producing averaged 94.57 lakh kilograms
(9.45 million kg) per day2010-11, representing growth of 1.88 per cent over 92.82 lakh
kilograms (9.28 million kg) per day achieved during 2009-10 . Procuring from 13 million
milk producers pour their milk in 1,28,799 dairy cooperative societies across the country.
The national production was of about 123 million tonnes in 2011 while global production
was 671million tonnes. We have already discussed about the gap between demand and
supply, and the huge opportunity thereby. So to fill this gap, it needs to overhaul its
production capacity from 12 million litres of milk per day to atleast 13.8 million litres of
milk to keep the growth rate of 15.3 %. This can be done by addressing following factors:
A. Better yield by hybrid animals: Crossbreeding local animals with breeds from
Britain which would result in animals with better yield. Artificial Insemination (AI)
should be started in key Villages as a part of planning process also crossbreeding
scheme at state level could be promoted for relatively high yield. frozen semen
technology in collaboration with foreign countries like Switzerland known for high
lactating animals and carrying high quality technological know how can also be
carried out for better quality milk with higher yield.
B. Improve cattle feed and fodder: As feed constitute 70 per cent of the cost of milk,
reducing the cost of feed while ensuring its nutritive value contributes significantly in
improving income of milk producers. Animal Nutrition Programme Amul has helped
a long way the dairy farmers sustaining their dairy farming and has significantly
helped farmers to overcome economic losses due herd health problems, reduced
reproductive efficiency, infertility etc.
But AMUL needs to further improve the quantity and quality to feed the increasing
cattle. Since it cannot be completely dependent on pastures to provide fodder, Supply
of regular balanced cattle feed has to be ensured. The production capacity of the plant
manufacturing following products: Amuldan (Bypass Protein Feed), Calf Starter,
Milk Replaced, Mineral Mixer, Medicated Feed, Urea Mineral Molasses Block
should be increased to as much as 50%. In order that the feeds supplied to the farmers
are cost effective raw materials are procured during seasons from all over India. But

instead of being dependent on suppliers for cattle feed, AMUL can integrate
backwards and enter into cattle feed business, like its competitor KCMMF, and
thus reduce cost and dependency. In future AMUL can increase its capacity and
generate cattle feed for revenue from outside.
C. Farmers:
a. Increasing productivity is long-term plan. As the milk prices have increased, the
earnings of farmers have gone up and so they see a bright future in the business.
Today, with about 30 lakh farmers, on an average every farmer has at least two
cattle. With rise in income, many of them are looking buy more animals or crossbreed cattle. Even if every farmer adds one cattle, the milk production will increase
by 50%, hence in the long term the milk productivity will increase.
b. For a section of its membership, dairy activity is a stepping-stone for upward

mobility in the society. Such members move on to other occupations after

raising their economic position through milk production. As a result, AMUL is
unable to realize the full benefits of its long-term strategy, and finds new
members (mostly marginal farmers) to replace those who have higher
potential and capacity. So, AMUL should come up with certain programs
which enable the development of farmers, while they are engaged with dairy
farming activity, so that they do not have to move to another occupation for
development.
D. Improved operations: : Amul should try to improve its technology like Herringbone
and Parlour Analyser, Milking Pipeline etc. to fasten the processing time and increase
its production and capture the Gap between demand and supply and over increasing
its exports to other part of the countries
E. Expand dairy farms in long run to other parts as well: the unorganized sector of
the dairy accounts to as much as 50%. So AMUL should make efforts to expand itself
to other states beside Gujarat and thus increase the milk procurement, its processing
capacity and market share by covering the vast unorganized sector into itself.

2)

SUPPLY CHAIN: Increasing the production capacity will address only a part of the
problem, as a major problem lies in supply chain and logistics majorly because of the
perishable nature of the product and it has become a major concern since local brands, are
taking over. fresh milk. (it forms 90 % of the total revenue generated by all product
lines). There are several ways it can improve its supply chain and cater to even distant
parts of the country, despite its perishable nature. These are:
a) Improving Technology:. The information technology and total quality
management came together to help the GCMMF to gain control on the

Procurement, processing and distribution functions.

The GCMMF Amul has
taken the initiative of installing the AMCUS Automatic Milk Collection Unit
Systems at village societies to enhance the transparency of transaction b/w the
farmer and the Co-Operative Society. These systems not only ensured the
transparency but also gave Co-Operative societies a unique advantage by reducing
the processing time to 10 percent of what it used to be prior to this. GCMMF
indeed got the entire supplier information through the systems integration. There
are 10755 village co-operatives in Gujarat that are now able to collect 6.1 million
litres of milk from 2 million members. Thanks to the use of IT, both transparency
and trust have been enhanced. The success of AMCUS prompted the GCMMF to
aggressively go on using Information Technology to capture the end data and
cover all aspects of the value chain.
The Dairy Information and Services Kiosk (DISK) is another initiative that is
started with the help of IIM (A) by GCMMFL. There are many more in the
pipeline of GCMMFL IT Initiatives. Various things like Enterprise wide
Integrated Application Systems (EIAS) to integrate the Distribution side of the
Supply chain, DISK to upgrade the application at the Milk Collection Centres
and to connect them to the Internet to access a specialized dairy portal with
content delivered in the local language have already started giving the fruits to the
rural poor, which has persuaded the rural folks to actively participate in IT
Revolution of the dairy industry. GCMMF triggered lot of innovative plans to
improve the entitlements of various stakeholders. Everyone started thinking for
the collective well-being of the organization. The workshops, counselling meets,
awareness programs and Hoshin Kanri meetings turned out to get the quality
feedback from the participants. The stress on making things better from day to
day has been forced by the Kaizen model of incremental improvement. To get the
rural masses with in the TQM boundaries a program such as Internal Consultant
Development was implemented.
These technologies have worked wonders for AMUL, but they have been
implemented only on a small scale. To further enhance its supply chain, this
technology should be applied to 1,28799 village cooperatives .
b) Manufacturing plants at different locations: achievement through technology
will be of no use if we cannot use it rationally by expanding ourselves into other
parts of the country of the world. Thus using this system in other part of the world
will help Amul to leverage and flourish easily.
So amul should expand its manufacturing plants in other parts of the country as
well. This will solve these purposes:
a) it will result in more milk procurement form farmers of other states as
well, as it will begin to bring the unorganized sector into itself, thus
improving productivity
b) the supply from such new developed production plants to rest of the
country will become easy

c) since the existing markets have already become saturated due to

presence of many competitors, manufacturing plants in the east at places
like Orissa etc will help capture new markets easily as the supply can be
made timely and at low cost.
The manufacturing plants should be located in all the four zones viz. NORTH
(Haryana where demand is the highest), EAST (Orissa where supply is low and
since disposable income is also low, products can be offered cheap) , SOUTH
(Karnataka) covering major markets where the demand for milk products is high.
From these locations, supply can be made throughout the country.

3) SALES AND DISTRIBUTION: Sales of Amul has been undergoing a constant growth
in all categories achieving average sales volume of 38.30 LLPD (lakh litres per day) in
pouch milk category.The Sales growth in value terms is 32% from existing markets only.
Amul has achieved number one status in pouch milk sales in Delhi for the year 2010-11.
With this achievement, Amul Milk has emerged as the largest selling brand of milk in all
major metro markets of Delhi, Mumbai, Kolkata and Ahmedabad.
In case of retail Amul is growing at a tremendous rate such that in the financial year
2010-11 their overall retail sales accounted for 4% of total revenue of Amul in the year.
This was achieved through their 5000 retail outlets called Amul parlours, with 3000 of
them been started in the same financial year. Such a huge growth which cannot be
matched by other competitors was made possible because of high brand equity, great
consumer pull and sales effort.
Amul range of products continues to penetrate deeper and deeper across the country
simultaneously through their four distribution highways created with specialist
distributors handling ambient milk products, chilled milk products, fresh milk products
and frozen products. This unique combination of managing distribution highways has
been their huge competitive advantage.
Distributors are considered to be Marketing Managers of Federation in true sense. To
develop Self Leadership amongst each individual distributor, a major initiative called
SLDP (Self Leadership Development Programme) has been implemented in the year
2009-10.
a. Better margin to retailers and distributors: Even the company can do some
collaboration with the existing manufacturers of Pizzas like Pizza Hut, Dominos,
Baskin Robins and other local retailers which can help it to push its product and
make enormous profits by spending much on the advertisement rather by paying
handsome margins to the retailers and distributors which will be win-win
situation.

b. Better cold storage facility to them: Though company is already providing the
good cold storage facility and refrigerators to help them with a problem of
perishability and storage of goods which make the deals attractive for retailers
and can easily be ready to store and display its products at prime location
c. Replacement of leaked or expired products: The one of the main reasons the
retailers and the other middlemen face while supplying of the milk products is
the durability of the same. Apart even the leakage problem makes the same more
difficult. Thus providing assurance of Replacement of leaked or expired products
can help them to move forward towards storing the proper stock of products
network increase in urban and rural areas
4) EXPORTS: During the year 2010-11, Amul was able to achieve the exports turnover of
Rs. 98 Crores. This had been achieved in spite of ban by Govt. of India on exports of
milk powder since February 2011. This figure looks significant but if we try comparing it
with annual sales turnover of Rs. 9,774.27 crores (Rs. 97.74 billion) registering a
quantum growth of 22.1% its forms a portion of just about 1% showing a great potential
to grow and enhance further. But now a question arises is to how to increase the
contribution of exports towards the profit.
a) As per data monitor report, Japan is the major importer of milk and dairy
products, while New Zealand is the largest exporter. Production wise India holds
the top position, followed by U.S. since most of the milk produced in India is
consumed domestically, only a small part is exported. If AMUL manages to
increase its production, exports to other countries like Japan will give high
revenue growth. And relative proximity of India to Japan will also give it an
advantage in respect of exports.
b) Foreign collaboration: If we look into the current manufacturing plant of
Amul is present only in Gujarat. Kaira District Co-operative Milk Producers
Union Limited (KDCMPU), a part of GCMMF, said that plans are afoot to
establish its own manufacturing plant in the US to produce dairy products
like ghee and paneer initially. There is great potential in Europe and US for
Amul products. Plans are afoot to establish our own manufacturing facility in
the US, initially to start with manufacturing ghee and paneer," KDCMPU
Chairman, Ramsinh Parmar said in a statement. Apart this will also help
them to bring the unorganized sector under them and widen their presence
and even reduce their risk of over dependence over farmers of Gujarat only.

Thus if we see in above mentioned table the World milk production in 2011 is forecast to grow
by 2 percent to 728 million tonnes. Much of the anticipated expansion is likely to accrue in Asia,
where India, the worlds largest milk producing country, is expected to witness an output rise of
5 million tonnes to 121.7 million tonnes. Rising domestic demand is the main engine stimulating
growth in the country, as India is largely absent from the international market for dairy products

we can say/ imply the continuous need to capture the growing market by one or the other ways ,
before we are taken over by any other country.
c) Technological joint venture: Amul can even get the technology and can increase
its market presence by taking a route of foreign collaboration or Takeover of any
existing company there. If we look upon the existing presence of Amul we have
the given below places where the Amul products are easily available. Thus taking
over the existing route further will not only help to increase its profit but can also
can mark its presence all over the world.

Apart from all this even foreign Entry will help Amul to explore the different places and
launch different products according to the need of the place n taste which not only help to solve
its problem of perishability of its product due to which the main drawback of its in logistics and
supply chain can be solved by reducing its expense on distribution.

5) PRICE REDUCTION:
a) Export of de-oiled cakes: The de-oiled cakes are a source of cattle feed which are of high
nutritional value for the cattle. As such in such a time when inflation is at its peak and
expenditure on cattle feed is becoming a tough aspect to handle, government should
discourage export of de-oiled cakes such that availability of nutritious fodder in India is
increased.
b) Increasing the capacity of each plant : this could lead to better fulfilment of overall demand
and also would lead to economies of scale leading to cost reduction.
c) Operational costs: these could be reduced through Kaizen , i.e. constantly working towards
achievement of more efficient methods of production methodology.
d) Backward Integration: like their major competitor KCMMF does, they could integrate
backward to produce fodder for animals such that the acquisition costs are reduced and also
better controls could be kept over the quality such that overall cost of milk production could
be reduced.

e) Better technology: Use of better technologies in production and also technologies to increase
production like artificial insemination, cross breeding etc. would lead to more efficient
production with more yield at lesser costs.
f) Better supply chain function: The supply chain could be centrally integrated to develop
better control and efficient logistics could thus be developed through use of ERP technology,
which could thus lead to overall cost reduction in supply and distribution management due to
synergy between different part of the supply chain cycle.
g) More manufacturing plants: at strategic locations i.e. the places where the target customers
are located can reduce the cost involved in distribution process by a major portion leading to
cost reduction.
h) More retail outlets: would mean that the margins lost to middlemen i.e the distributors,
dealers would come to Amul. As such better margins and so prices can be reduced for the end
customers.

6) PRODUCT INNOVATION: "The dull and conservative image associated with Amul
products has to be rubbed off the minds of the youth. So the $2-billion brand should now
work on pack designs, product positioning and event promotions to target the 18-22 age
groups, which forms 51% of Indian consumers.
To continue the story of success (It took 33 years for brand Amul to touch $1-billion
turnover, but India's largest food brand has added another billion in just four years)
Amul should redesign and redevelop its Strategy to face the continuous increase in cut
throat competition.
a. AMUL should constantly do the research and development of its existing
products, and come up with new food products as it has done in past by
introducing Pizza. It should conduct market research and study about customers
expectations and its tastes.
b. AMUL parlours have been quite successful in India so the numbers should be
constantly increasing, adding more exciting features constantly.
c.

multi-cuisine quick-service cafes: Joining the race with Big Mac and others to
open quick-service restaurants (QSRs), Asia's largest dairy products brand, Amul
can open cafes-cum-restaurants across India

d. Amul brand should expand its footprint by diversifying into healthy food market.
Amul is going the franchisee-model way to set up these outlets. GCMMF should
also plans to open such cafes in Tamil Nadu, Maharashtra, Karnataka, Gujarat and
other States to cater to the youth segment.

7) MARKETING, ADVERTISEMENT , PACKAGING: Marketing strategy of Amul

should be focussed to stress upon various aspects of Brand building and awareness of

products. Also special attention has to be put to stress upon the Business to business
marketing model of Amul and to fight competition special competitive strategies need to
be laid down.
a) Finding new markets: to keep the growth rate of the company alive and
working. The company need to look into new markets and sources of
consumption of milk and milk products to keep increasing the demand. The
following are a few ideas to increase demand at various places.
b) Schools: the consumption in schools can be increased by opening Amul milk
parlours near schools or opening vending machines in school canteens.
c) Run celebrity driven milk awareness drive to increase consumption of milk
amongst school children.
d) Amul can tie up with various schools to include milk and milk products in the
school childrens midday meal.
e) Health educators and school nurses programmes will help in instructing the
school children about the ways to stay healthy and the benefits of including milk
in their diet, and replacing aerated drinks by milk based drinks in their meals.
f) Wall posters could help increase attention of students towards the benefits of
having milk and how milk can help them build lean muscles, strengthen bones,
and improve skin.
g) Restaurants: Most restaurants across the country do not serve milk based drinks
in
their
meals
and
is
never
included
in
their
menu.
A study relates that milk only constitutes 3-5% of drinks consumption in
restaurants and hence milk and milk based products should be promoted in
restaurants for consumption as a survey relates that customers are open to milk
consumption during their meals out and consider flavoured milk as a delicacy
amongst others. Thus Amul can tie up with various restaurants to serve the
purpose of increasing availability of milk products at maximum places.
h) Combo meals at fast food joints: just like the combo meals at restaurants like
McDonalds give offers like burger and Pepsi combo meal, now food with amul
drinks can be offered too to increase sales by volume.
i) Suggestive selling, which involves servers asking customers if they'd like to order
milk with their meal, and point-of-purchase materials also helped increase milk
sales.
j) We can offer milk tastings to promote milk varieties.

k) Promote the products in retail super stores like more and reliance fresh by
mentioning milk and milk products nutritional value could lead to increase in
consumption. Furthur kiosks can also be laid inside supermarkets on the same line
which would lead to increase in sales as families today are aware and more
interested in maintaining family health.
l) Increasing availability of milk everywhere through vending machines, glass
doored see through displayrefrigerators, milk shops and keeping milk and milk
products as an option to choose from amongst various other options will lead to
increased demand of milk products.
m) Attractive packaging: the packaging of milk and milk products should be made
more attractive to attract the attention of the consumers.
n) Goodwill development: Amuls goodwill has been developed over a period of
time by their working for social cause like the GREEN AMUL GREEN INDIA
which was a sustainable ecological development campaign and is a great success
ill now. The idea was Tree Plantation by milk producer members of Dairy
Cooperatives on every Independence day and it started in the year 2007.
There were cleanliness drives conducted at village level for a cleaner and
healthier rural India. For this every year, Gandhi Jayanti was celebrated as a red
tag day. Such campaigns should carried out all over India and not only Gujarat
such that a goodwill of Amul is developed in the entire country.

SWOT ANALYSIS OF AMUL

Strengths:

Margins: Amul enjoy quite reasonable margins, even on packed liquid milk.
Flexibility of product mix: Tremendous. With balancing equipment, AMUL has kept
adding to its product line.
Availability of raw material: Abundant. Presently, more than 80 per cent of milk
produced is flowing into the unorganized sector, which requires proper channelization.
Technical manpower: Professionally-trained, technical human resource pool, built over
last many years.
Distribution: GCMMF's formidable distribution network comprised 300 stock keeping
units, 46 sales offices, 3,000 distributors, 100,000 retailers with refrigerators, an 18,000strong cold chain, and 500,000 non-refrigerated retail outlets

Weaknesses:
Perishability: Pasteurization has overcome this weakness partially. UHT gives milk long
life. Surely, many new processes need to follow to improve milk quality and extend its
shelf life.
Lack of control over yield: Theoretically, there is little control over milk yield.
However, increased awareness of developments like embryo transplant, artificial
insemination and properly managed animal husbandry practices, coupled with higher
income to rural milk producers has automatically led to improvement in milk yields.
Logistics of procurement: Woes of bad roads and inadequate transportation facility
make milk procurement problematic. But with the overall economic improvement in
India, these problems would also get solved.
Problematic distribution: Yes, all is not well with distribution. But then if ice creams
can be sold virtually at every nook and corner, why cant we sell other dairy products
too? Moreover, it is only a matter of time before we see the emergence of a cold chain
linking the producer to the refrigerator at the consumers home!

Opportunities:

Demand Profile: Demand growing by app. 8% per annum. Projected demand of 190
million tons of milk by 2015. To achieve that, the milk production has to grow by double
the current growth (4%)

Value addition: There is a phenomenal scope for innovations in product development,

packaging and presentation. Given below are potential areas of value addition:
o Steps should be taken to introduce value-added products like shrikhand, ice
creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater
presence and flexibility in the market place along with opportunities in the field of
brand building.
o Addition of cultured products like yoghurt and cheese lend further strength - both
in terms of utilization of resources and presence in the market place.
o A lateral view opens up opportunities in milk proteins through casein, and other
dietary proteins, further opening up export opportunities.
o Yet another aspect can be the addition of infant foods, geriatric foods and
nutritionals.

Export potential: Efforts to exploit export potential are already on. Amul is exporting to
Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty,
opportunities will increase tremendously for the export of agri-products in general and
dairy products in particular

Foreign Collaborations and Joint Ventures : In order to enter the other parts of the
world and solve the problem of the technology and perishability he can enter into JVsor
Foreign collaboration with some company in other countries.

Threats:
Competition: With so many newcomers entering this industry, competition is becoming
tougher day by day. But then competition has to be faced as a ground reality.
Growth in production amul is 2%,
India is growing at 4%.
Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in
the industry. Organized dissemination of information about the harm that they are doing to
producers and consumers should see a steady decline in their importance. The Indian dairy
industry, following its delicensing, has been attracting a large number of entrepreneurs. But their
success in dairying depends on factors such as an efficient yet economical procurement network,
hygienic and cost-effective processing facilities and innovativeness in the market place
The study of this SWOT analysis shows that the strengths and opportunities far outweigh
weaknesses and threats. Strengths and opportunities are fundamental and weaknesses and
threats are transitory. AMUL can do well with three essential ingredients: entrepreneurship (the

ability to take risks), innovative approach (in product lines and marketing) and values (of
quality/ethics).

BIBLIOGRAPHY:

http://www.amul.com.
http://www.motherdairy.com/.
http://www.financialexpress.com.
http://www.tetrapak.com.
http://business.mapsofindia.com/sectors/manufacturing/amul.html.
http://en.wikipedia.org/wiki/Amul.
http://www.experiencefestival.com/a/Amul/id/1911316.
http://www.indiadairy.com.
http://www.foodindustryindia.com.
http://www.scribd.com.