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9/24/2015

Strategic Management Group


Project
Amul The Taste of India

Group 05, Section S3


Great Lakes Institute of Management, Chennai

Statement of Integrity
We declare that all the material presented and submitted as part of this assignment is our original work. For all the
other material references and citations are mentioned.
We understand that plagiarism is the severest form of academic fraud. If any copying is detected in this assignment,
we bear the complete responsibility and the consequences that might follow.

Section: S3
Group Number: 05
Group Members:
1.
2.
3.
4.
5.
6.
7.
8.

Ankita Dhar : FT163013


Anisha Kashyap : FT163012
Divya Ogoti : FT163020
Himanshu Malik : FT163031
Himanshu Aggrawal : FT163029
Tejas Pramod Madan : FT163098
Gautam Gupta : FT163024
Abhinav Choudhary : FT163003

Table of Contents
Company Overview ............................................................................................................................... 3
Trivial Strategy ...................................................................................................................................... 4
Low-Cost Price Strategy ..................................................................................................................... 4
Defense Strategy ................................................................................................................................ 4
Successful Brand Strategy .................................................................................................................. 4
SWOT Analysis ..................................................................................................................................... 5
GE/McKinsey Growth Matrix ................................................................................................................ 5
Porters Five Forces ............................................................................................................................... 6
PESTEL Analysis .................................................................................................................................. 6
Ansoff Matrix for Market Planning ........................................................................................................ 6
BCG Matrix ........................................................................................................................................... 7
Conclusion ............................................................................................................................................. 7
Strategic Recommendations ................................................................................................................... 7
Bibliography .......................................................................................................................................... 8

Company Overview
AMUL, which is abbreviated as Anand Milk Union Ltd. has a whole list of products that have been used in
millions of houses since 1946. Some of the products such Amul Milk Powder, Amul Ghee, Amul Butter,
Chocolates, Cheese, Ice Cream, Nutramul, Amulya and Amul Milk have made Amul a leading brand of the food
sector in India.
It is the sole and the most popular brand in the FMCG sector of India. It is a Milk Cooperative, which has been
ranked No. 1 dairy brand in India as well as the Asia Pacific (APEC). It competes significantly well with various
internal brands such as Dutch, Anchor and Amex. The performance reflects in the 4 th position that Amul hold in the
Indian brand scale for the years 2009 and 2010.
Some of the major milestones achieved by Amul were,
1946: The first milk union was established
1946: District Co-operative Milk Producers Union
1955: The brand name selected Amul
1973: Gujarat Co-operative Milk Marketing Federation established
2013: Kaira District Co-operative Milk Producers Union Limited known as Amul Dairy
Signed an agreement to establish a plant in Waterloo village in New York.
A Snapshot of Total Market Capitalization & Turnover,
GCMMF, which is the parent organization of Amul has the following statistics of the year 2011-12, Butter Market:
85%; Cheese Share Market: 75%; Infant Milk: 63%. The group had a turnover of Rs. 19,100 Cr. in the year 201213 and a turnover of Rs. 11,668 for the year 2011-12. The component level growth figures can be illustrated as UHT
Milk: 53%; Cream: 57%; Milk Beverages: 27%; Ghee (Amul & Sagar): 31%.
Amul is expected to grow at the three folds percentage to a value of Rs. 30,000 Cr. Component vise breakup of
growth parameters can be viewed as Butter Market: 83%; Dairy Whitener: 45%; Infant Milk: 63% and Milk Market:
26%. The Rs. 450 Cr. worth of export revenue is primarily earned through the skimmed milk powder component.
Some other components:
Management Team: Managing Director (Amul Dairy): R S Sodhi. First Chairman: Dr. Verghese Kurien
Mission:
We at GCMMF (Gujarat Co-operative milk Marketing Federation) endeavor to satisfy the taste and nutritional
requirements of the customers of the world, through excellence in marketing by our committed team. Through
co-operative networking, we are committed to offering quality products that provide best value for money.
Vision: To provide at most satisfaction to the employees, farmers and distributers.
Values: Customer Orientation, Commitment to Producers, Integrity, Co-operation, Excellence, Belongingness,
Pride in the Organization, Quality, Innovation, Growth Orientation, Employee Satisfaction and Leadership

Trivial Strategy
When AMUL was formed, at that time consumers had modest purchasing power & limited consumption level of
milk and other dairy products. Thus AMUL adopted:-

Low-Cost Price Strategy


The Low Cost Price Strategy was adapted to make the product alluring and affordable to consumers by guaranteeing
them value for their money. The main motive of Amul is to provide quality products to the users at minimal cost.
The goal of Amul is to maximize profit in terms of money given to the farmers.
AMUL milks lower cost of production: Milk production is scale insensitive as well as labor intensive. Cost of
production of milk is apparently quite lower in AMUL due to low labor cost.

Defense Strategy
Moving consumers from buying loose milk to going for packaged milk and gradually moving up the value chain
like tetra pack/beverages. Being used to a brand, it is natural for a customer to move to more products.

Successful Brand Strategy

Product Positioning Strategy


o Indias first pro biotic Wellness Ice-cream and for diabetics theres sugar free delights.
o Amul launched Fresh Paneer which is free from harmful chemicals.
Low pricing strategy
o Low priced ice-creams by Amul made Kwality Walls life not so peaceful.
Effective Segmentation
o Wide range of product categories serves to consumers all across market segments.
o Eg:- Amul Kool is targeted for children to consume, whereas Kool Caf is preferred by teens as it
has a cool image associated with it.
o Segmentation is not as easy as in the case of Curd and low fat products due to their mixed audiences,
culinary applications. Eg: - Butter, Ghee and Cheese
o In India, the most used spread is Ghee, than butter, cheese, low fat category butter, margarine, and
cheese spread and mozzarella cheese.
Changing the Retail Environment
o To Strike out on its own with outlets or parlors of AMUL for delivering consumers total brand
experience.
Product Repositioning
o Amul tried to market bottled water named Jaldhara
o But due to its less potential in the market it then launched Narmada Neer.
Product Overlap
o It processed cheese and at the same place cheese spread
o Nutramul Energy Drink as well as Amul Kool
o Price and Health Conscious
Sagar is an affordable whitener for the Health conscious segment.
Product Design Strategy: Whether to offer a standard or a customized products.
o Amul has offered a mixture of standard as well as customized products.
o Use of Utterly-Butterly Girl:
4

Using since the year 1967.


It made through the Guinness Book of World Records for being running the longest
campaign ever.

SWOT Analysis
POSITIVE

NEGATIVE

Strengths:
Brand Equity ; Product Image
Trust Factor ; High Quality
Affordable Pricing ; Large employment

Weaknesses:
Lower market share in chocolate segment
Lesser advertisement
Product failure
SWOT

Opportunities:
Value Addition ; Product Development
Targeting new segments
More Export; Diversification

ANALYSIS
Threats:
Aggressive Competition
Product Imitation ; Localized Suppliers
New Entrance in the market

GE/McKinsey Growth Matrix

High

Market
Attractiveness

Medium

Low

High
Invest for Growth

Business Position - Strength


Medium
Invest selectively for growth

UHT Milk, Butter

Cheese, Ghee

Invest. The organization


is selective in choice of
product/service

Protect. Develop and build


selectively for revenue
generation

Pouched Milk, Milk


Powder
Protect. Develop for
revenue generation

Dahi, Paneer

Fresh Creams

Low
Protect. Develop
selectively building
upon strengths
Amul Spray
Harvest
Bread Spread, Mithai
Range

Harvest or Divest

Divest

Ice Creams

Beverage Ranges

Porters Five Forces


Threat of New
Entrants
Foreign milk
producing
organizations and
local milk suppliers

Amul Porters Five Force Analysis


Threat of
Bargain Power of
Bargain Power of
Substitutes
Suppliers
Buyers
Local milk
The unions and the Large number of
suppliers, ice-cream members of
buyers
suppliers
GCMMF

Rivalry Among Firms


Nestle, Britannia

PESTEL Analysis

Political (P):
Economical (E):
Sociological (S):
Technological (T):
Environmental (E):
Legal (L):

Effect of Macro-environment Variables on Amul


AMUL faced political issue initially before the establishment co-operative society when there
was unethical practice of purchasing milk directly from the farmers. Other than that there
hadn't been any political conflict till then.
The Amul co-operative contributes a major portion to the Indian GDP and national income.
Sale to foreign countries like USA, UAE also plays a role in the economy.
The multilingual and multicultural environment of India makes the people follow varied form
of lifestyles and food habits. Such factors help in growing the market.
Being a developing country, India witnessing an aggressive development of technology. The
same is being used by Amul for improvement in its operational activities.
The products made by Amul is mostly of milk, therefore it is not harmful for the environment.
Having a component framework of natural composition, Amul has no threats for its cooperative society.
Acts such as Prevention of Food & Adulteration Act and the Industrial Development &
Regulation Act, act as opportunities of growth for Amul. Threats of Child Labor are always
there.

Ansoff Matrix for Market Planning

Existing
Markets

New

Products/Services
Existing
New
Market Penetration
Product Development
Fresh Milk, Ghee, Milk Powders,
Fat Free Dessert, Cooking Chocolates, Soups,
Ice-creams
Lassi, Diabetic and Healthy Products
Market Development
Diversification
South East Asia, Middle East With
South East Asia, Middle East with Products
Products like Paneer & Butter
like Paneer, Cow Ghee, Confectioneries

BCG Matrix
Market Share
High
Market
Growth

Low

High
Stars
UHT Milk, Cheese, Milk Powders,
Flavored Milk
Cash Cows
Pouch Milk, Ghee, Butter

Low
Question Marks
Chocolates
Dogs
Nutrella

Conclusion
GCMMF which owns Amul, Asia's largest brand of milk realized that with the fast lifestyle change and increased
awareness of people regarding the health issues, there has been an observable shift tending towards health based
drinks from the usual carbonated drinks. It plans to utilize potential market in India of flavored milk, butter milk
and various other milk based beverages that have a tradition extending long back, by recognizing the targeted teens
& youth consumers, who were the biggest consumers of aerated drinks and colas. The New variety of the brand
were advertised via major national channels with special focus being laid on youth oriented TV channels like MTV
and Cartoon Network . By recognizing the trend and introducing variants, Amul has emerged as one of the fastest
growing brand in the category of non-carbonated soft drinks.

Strategic Recommendations

Amul should focus on the expansion in retail sector in Indian cities, towns and villages it should increase
branded Amul parlors to capture the consumers attention and keep the competitors at bay
Amul should venture into offering low-fat versions of its various products as it would help them capture
the hearts of 2nd and 3rd generation Indians in US as well as Global Market
Amul can venture in new products like baby-food products, dairy based sweets.
Amul must to understand the cause of certain products like gulab jamoon, Amul basundi, and chocolates
etc. not very popular. Amul need to do thorough market research and work to improve these products.
On the best feature are Amuls hoardings, which are a huge success, it can penetrate even better in the rural
areas with its advertising actively through the media options like cable channels and newspapers.
Sponsoring of more TV shows, also sports events can be of great help.
Amul expanded its distribution reach to acquire 1,200 new geographical markets in addition to 306 new
distributors, 65 new super stockiest also 900 new sub-stockiest.
Amul further positioned its brand as the largest single-brand retail in the country by including 3 Amul
Parlors almost every day during the year 2012-13.
The goal is to establish total 7000 number of exclusive stores.
Another goal for future is to reach sale of 200 lakh liters per day over the next two years from the current
capacity is 160 lakh liters per day. It is set to manage to achieve 20 % growth procurement of milk during
2012-13.
Amul plans to even launch "gajar ka halwa". It want to transform every Indian kitchen to Amul kitchen.
7

From the daily glass of milk / butter milk to butter and cheese in breakfast and to paneer and curd in meals,
this is Amuls plan.
Amul is keen in penetrating markets with products such as cheese, butter and ice-cream and urban market
with daily-consumption of eatable items such as lassi, paneer and curd.

Bibliography
1.

2.

3.
4.
5.
6.
7.

Pankaj Chandra, Devanath Tirupati (2003), Business Strategies for Managing Complex Supply
Chains in Large Emerging Economies: The Story of AMUL, Indian Institute of Management,
Ahmedabad
Dr. N.Shankar, P. V. Muthu Perumal, June (2014), A Comprehensive Strategic Evaluation of Success
of Amul Model, Excel International Journal Of Multidisciplinary Management Studies, ISSN 22498834
Annual Report (2013-14), Department of Animal Husbandry, Dairying and Fisheries, Ministry of
Agriculture, Government of India, New Delhi
Marketing mix of Amul, from http://www.marketing91.com/marketing-mix-of-amul/
The extraordinary story of Amul (2005 September 23), from
http://www.rediff.com/money/2005/sep/23spec.htm?print=true
Marketing strategy of Amul, from http://www.marketing91.com/marketing-strategy-amul/
Anto T Joseph, (2015 February 04) ,We are focusing on branded products to maximise Amul's profits:
RS Sodhi, from http://www.dnaindia.com/money/interview-we-are-focusing-on-branded-products-tomaximise-amul-s-profits-rs-sodhi-2057932