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PROJECT REPORT ON
STRATEGY MANAGEMENT OF AMUL COMPANY
SUBMITTED BY
AMRUTA R. PATIL
ROLL NO.
M.COM (Part I)
1ST SEMESTER
CERTIFICATE
I, PROF. ANITA MADAM HERE BY CERTIFY THAT AMRUTA R. PATIL OF
DNYANSADHANA COLLEGE OF ARTS, SCIENCE AND COMMERCE OF
M.COM -BUSINESS MANAGEMENT (PART I) HAS COMPLETED PROJECT
ON STRATEGY MANAGEMENT OF AMUL COMPANY
DURING
DATE :
SIGNATURE OF PRINCIPLE
DECLARATION
THAT I
HAVE
COMPLETED
PROJECT
ON
STRATEGY
MANAGEMENT OF AMUL COMPANY IN THE ACADEMIC YEAR 20152016, AS PER THE REQUIREMENT OF THE UNIVERSITY OF MUMBAI AS A
PART OF MASTERS IN COMMERCE -BUSINESS MANAGEMENT (PART I)
PROGRAMME. THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL
TO THE BEST OF MY KNOWLEDGE.
PLACE
DATE
ACKNOWLEDGMENT
INDEX
Sr.
PARTICULARS
No.
Page
No.
Executive Summary
Introduction
10
GCMMF
11
Strategic Management
13
14
Levels of Strategy
16
Types of Strategy
20
25
10
4 Ps
26
11
Conclusion
33
12
Bibliography
35
Executive Summary
AMUL is a co-operative sector. It is the institution of the farmers, for the
farmers and from the farmers. The AMUL gives pleasure to the farmer to charge the
own price, which was not possible in earlier years. This union was born on 14th
December 1946. The union provides facilities to its members like more return,
satisfactory price, insemination, first aid, group Insurance, cattle food at confessional
price etc.
I have done case analysis on HRIS of AMUL and from that I have come to
know how organization operates and how the functions have been carried in the
organization. From this is case I have come to know how a wide organization like
AMUL manages its
AMUL dairy has five main departments like finance, personnel, commercial,
milk procurement and production. The finance department does the clerical work and
takes care of inflow and outflows of the cash. The other work of finance Department
is to audit of annual work.
The personnel department handles the work regarding personnel like
appointment, recruitment, promotion, transfer, dismissal, demotion, performance
appraisal etc.
Organization Profile
Name
Form
Reg.Office
Promoters
Auditors
Socities
: 1113.
Members
: 6, 31,333.
Office Time
Premises
: 49.55 Acres.
Registration
Introduction
AMUL means priceless in Sanskrit. A quality control expert in Anand
suggested the brand name AMUL from the Sanskrit word Amoolya variants, all
meaning priceless are found in several Indian languages. Amul products have been
used in millions of home since 1946.
Today Amul is a symbol of many things; of high quality products sold at reasonable
prices; triumph of indigenous technology; of the marketing savvy of a farmers
organization and proven model for dairy development.
The topic To study about Strategy and Market Share of Amul chocolates
highlights on the market share of Amul Chocolates Pune city in comparison to
existing player in the Milk chocolate Market. The market share can be found with the
help of retailers. As the competitors are concerned there are only two of them i.e.
Cadbury and Nestle
The study is also concerned to find out the various reasons due to which the
retailers do not prefer to sell Amul Chocolates. Moreover the study also helps in
knowing the best medium for creating the awareness about the Amul Chocolates. To
know the Market share and problems faced by retailers is very important for every
organization for their promotion, expansion and development.
The main motto of AMUL is to help farmers. Farmers were the foundation
stone of AMUL. The system works only for farmers and for consumers, not for profit.
The main of AMUL is to provide quality products to the consumers at minimum cost.
The goal of AMUL is to provide maximum profit in terms of money to the farmers.
Vision of AMUL is to provide and vanish the problems of farmers (milk producers).
The AMUL apparition was to run the organization with co-operative of four main
parties, the farmers, the representatives, the marketers, and the consumers.
History
In early 1940s a farmer in Kaira district, as elsewhere in India, derived his
income almost entirely from seasonal crops. The income from milk was paltry and
could not be depended upon. The main buyers were milk traders of Polson Ltd.-a
privately owned company that enjoyed monopoly for supply of milk from Kaira to
the Government Milk Scheme Bombay. The system leads to exploitation of poor and
illiterate farmers by the private traders.
However, when the exploitation became intolerable, the farmers were
frustrated. They collectively appealed to Sardar Vallabhbhai Patel, who was a leading
activist in the freedom movement. Sardar Patel advised the farmers to sell the milk on
their own by establishing a cooperative union, instated of supplying milk to private
traders. Sardar Patel sent the farmer to Shri Morarji Dasai in order to gain his Cooperation and help. Shri Dasai held a meeting at Samrkha village near Anand, on
January 4, 1946. He advised the farmers to from a society for collection of the milk.
These village societies would collect the milk themselves and also decided prices for
that which would be profitable for them. The district union was also from to collect
the milk from such village cooperative societies and to sell them. It was also resolved
that the government should asked to buy milk from the union.
However, the government did not seem to help farmer by any means. It gave
the negative response by turning down the demand for the milk. To respond to this
action of government, farmer of Kaira district went on a milk strike. For 15 days not a
single drop of milk was sold to the traders. As a result the Bombay milk scheme was
severely affected. The milk commissioner of Bombay then visited Anand to assess the
situation. Finely he decided to fulfill the farmers demand.
Thus their cooperative unions were forced at village and district level to
collect and sell milk on a cooperative basis, without the intervention of government.
Mr. Verghese Kurien had main interest in establishing union who was supported by
Shri Tribhuvandas Patel who convinced farmers in forming the cooperative unions at
the village level. The Kaira District Co-operative Milk Producers Union was thus
established in Anand and was registered formally under section 10 of Bombay Act
VII of 1925 on December 14, 1946. Since then farmers are selling all the milk in
Anand through cooperative union. In 1955 it was commonly decided the sell milk
under the brand name Amul.
At the initial stage only 250 liters of milk was collected every day. But with
the growing awareness of the benefits of the co-cooperativeness the collection of milk
increased. Today Amul collect 50, 00,000 liters of milk every day. As the milk is
perishable commodity it became difficult to preserve milk for a longer period.
Besides when the milk was to be collected from the far places there was a fear of
spoiling of milk. To overcome this problem the union thought to develop the chilling
unit at various junctions, which would collect the milk and could chill so as preserve
it a for a longer period. Thus, today Amul has more than 168 chilling centers in
various villages. Milk is collected from almost 1097 societies.
With the financial help from UNICEF, assistance from the government of
New Zealand under the Colombo plan, of Rs. 50 million for factory to manufactory
milk powder and butter. Dr. Rajendara Prasad, the president of India laid the
foundation on November 50, 1954. Shri Pandit Jawaharlal Nehru, the prime minister
of India declared it open at Amul dairy on November 20, 1955.
A plant to manufacture balanced cattle feed was formally commissioned on
October 31, 1964 by Shri Lalbahadur Shastri, the Prime Minister of India. At the
request of the government of India, a new dairy with a capacity to manufacture 40
tons of milk powder and 20 tons of butter a day was completed in 1963. This was
meant to meet the requirement of Indias defense forces. The dairy was declared open
by ShriMorarji Desai in April, 1965. in 1974, the Kaira Union setup a plant to
10
manufacture high-protein weaning food, chocolate and malted food at Mogar, about 8
km south of Anand.
In September, 1981, the second cattle feed plant at Kanjari were started. The
succesion of the co-generation project on September 11, 1985, marked a milestone on
the energy front when two gas turbine generators of 1.5 MW each based on natural
gas, were commissioned. On October 31, 1992, Dr. V. Kurien chairman, National
Dairy Development Board, laid the foundation of Kaira Unions third dairy with a
processing capacity of 6.5 lakh liters of milk a day. Work on the third dairy and
cheese plant at Khatraj with capacity for 20 Metric Ton of cheese per day, began in
February, 1994. Also in 1994, Kaira Union put up bread spread plant at Mogar with
the assistance from National Dairy Development Board.
The CEO, Mr. B M Vyas, said that. Amul is not a food company; it is an IT
company in the food business. In saying this he was recognizing that the most
efficient way of building links between milk producers and consumers so as to
provide the best returns for the both is through IT innovation.
Thus is why Amul has embraced the ideas behind coop with such enthusiasm.
Not only will the TLD enable consumers in India to recognize an established brand
they can trust online, it will enable Amul to begin trading competitively throughout
the world, reaching markets, which have hitherto been inaccessible.
The CIO, Mr. Subbarao Hegde said, Information Technology is the most
effective tool we have in communicating with our members and the millions of
consumers who purchase Amul products throughout India every day. Coop not only
reflects the cooperative values which shape our own organization democratically
dynamic, it will also give us a vital business advantage as we seek to develop the
Amul brand throughout the world.
AMUL means priceless in Sanskrit. The brand name Amul, from the
Sanskrit Amoolya,was suggested by a quality control expert in Anand. Variants, all
meaning priceless, are foundin several Indian languages. Amul products have been
in use in millions of home since 1946.Amul Butter, Amul Milk Powder, Amul Ghee,
Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,
Nutramaul, Amul Milk and Amulya have made Amul a leading food brand in India.
(Turnover: Rs. 29 billion in 2004). Today Amul is a symbol of many things. Of highquality products sold at reasonable prices.
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: 2.36 million
: 11,333
13
Strategic Management
Although the term strategic management is bantered around a lot in the
businesses world, it is not understood very well by most people. Essentially strategic
management answers the questions of where do you want your business to
go(goals), how is your business going to get there (strategy) and how will you
know when you get there (evaluation). A strategic management analogy is taking a
trip during your vacation. First you decide where you want to go the natural beauty
of Yellowstone or the bright lights of Las Vegas. Then you develop a strategy of how
to get there take an airplane (which flights), drive your car (which highways), etc.
This will be influenced by the amount of money, time and Other resources you have
available. Then you monitor your trip to see if your strategy takes you to your
destination and how your strategy worked (missed Flights, poor road conditions, etc.).
Below are concepts to help expand your understand of strategic management for a
business. These will help sharpen your focus for using Strategic Management for a
Value-added Farm Business.
14
Environmental Scan
The environmental scan includes the following components:
Internal analysis of the firm
Analysis of the firm's industry (task environment)
External microenvironment (PEST analysis)
The internal analysis can identify the firm's strengths and weaknesses and the
external analysis reveals opportunities and threats. A profile of the strengths,
weaknesses, opportunities, and threats is generated by means of a SWOT analysis.
15
Strategy Formulation
Given the information from the environmental scan, the firm should match its
strengths to the opportunities that it has identified, while addressing its weaknesses
and external threats. To attain superior profitability, the firm seeks to develop a
competitive advantage over its rivals. A competitive advantage can be based on cost
or differentiation. Michael Porter identified three industry-independent generic
strategies from which the firm can choose.
Strategy Implementation
The selected strategy is implemented by means of programs, budgets, and
procedures. Implementation involves organization of the firm's resources and
motivation of the staff to achieve objectives. The way in which the strategy is
implemented can have a significant impact on whether it will be successful. In a large
company, those who implement the strategy likely will be different people from those
who formulated it. For this reason, care must be taken to communicate the strategy
and the reasoning behind it. Otherwise, the implementation might not succeed if the
strategy is misunderstood or if lower-level managers resist its implementation
because they do not understand why the particular strategy was selected.
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17
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Horizontal Integration
The acquisition of additional business activities at the same level of the value
chain is referred to as horizontal integration. This form of expansion contrasts with
vertical integration by which the firm expands into upstream or downstream
activities. Horizontal growth can be achieved by internal expansion or by external
expansion through mergers and acquisitions of firms offering similar products and
services. A firm may diversify by growing horizontally into unrelated businesses.
Some examples of horizontal integration include:
The Standard Oil Company's acquisition of 40 refineries.
An automobile manufacturer's acquisition of a sport utility vehicle
manufacturer.
A media company's ownership of radio, television, newspapers, books, and
magazines.
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Types of Strategy
Research and development strategy
Businesses cannot grow and survive without new products. It is the role of R&D
specialists to generate new product ideas, nurture them carefully and develop them
fully into commercially viable propositions. Where innovation proves to be a costly
exercise imitation could also be tried as a fruitful option. Many Japanese electronics
companies were quite successful in copying American technology and by avoiding
R&D costs, improved their competitive strength significantly.
Operations Strategy:
This strategy outlines steps to keep costs under check and improve operational
efficiency. The focus is on arriving at decisions regarding plant layout, plant capacity,
production processes, inventory management etc.
Financial strategy
It deals with financial planning, evaluating investment proposals securing funds for
various investments and controlling financial resources. Thus raising funds, acquiring
assets, allocating funds to operations, using funds efficiently etc are all part of the
strategy.
Marketing Strategy
It deals with strategies relating to product pricing, distribution and promotion of a
companys offering important issues here cover what type of products at what prices
through which distribution channel and by the use of which promotional tool and
sales force etc.
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2)
3)
4)
They provide adequate flexibility for the business and the organization.
5)
6)
Strategy Implementation:
Strategy implementation is the process of translation of strategies and policies into
action through the development of programs, budgets and procedures It is typically
conducted by the middle and lower level management but is reviewed by the top
management. However, programs and procedures are simply more detailed plans for
the eventual implementation of strategy. Unless the corporation is appropriately
organized, programs are adequately staffed and activities are properly directed these
operational plans fail to deliver the goods. To be effective a strategy must be
implemented through the right organization structure and appropriate management
practices. In addition, management must also ensure that there is progress towards,
objectives according to plan by instituting a rigorous process of control over
important activities. The following figure would help in understanding the process of
strategy implementation.
Directing
People should be motivated to implement a new strategy in desired ways. It is not
sufficient merely to have people who can do the job; it is necessary to have people
who want to do the job the way you need it done. In addition to traditional
motivational techniques managers should also make use of modern techniques in
order to inspire people to perk performances.
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General Environment
Operating Environment
Internal Environment
Managers must be well aware of these 3 organizational environmental levels,
understand how each level affects organizational performance and then formulate
organizational strategies in response to this understanding.
The General Environment:
The components normally considered part of the general environment are:
Economic
Social: Including Demographics and Social Values
Political
Legal
Technological
Customer
Competition
Labour
Supplier
International Issues
4 PS OF MARKETING
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The marketing mix, which is set of four elements or four P of marketing are as
follow
1. Product
2. Price
3. Place
4. Promotion
Same as four P there is also four C of marketing.
1. Customer solution
2. Cost
3. Convenience
4. Communication
Product :
A product is anything that satisfies needs or wants and can be offered to the
market for exchange. A product can be goods, services without product there is no
marketing. This includes product variety, product design, packaging, quality, brand
name, size etc. AMUL produces and sell i.e. Milk; it has to plan its product very
carefully so that the consumer gets only good quality products. There are various
products marketed by GCMMF
.
Price :The prices of products of Amul are also decided by the GCMMF. The
GCMMF conducts the market survey to check the validity and feasibility of prices in
the market and accordingly decides the prices of Amul products. The price of the
products of Amul are also decided by the Gcmmf .The Gcmmf conducts the market
survey to check the validity and feasibility of prices in the market and accordingly
decides the price of Amul products .
However, the price is inclusive of several elements like:
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Labour cost
Processing cost
Packaging cost
Advertising cost
Transportation cost
The GCMMF considers all this cost. Aspects and set them up in pricing structure to
decide the selling price of milk and milk products.
Setting the price based upon prices of the similar competitor products.Amuls
new launch Choco Crunch Pricing is based on three types:1) Product is lasting distinctiveness from competitor's product.
Here we can assume
a) The product has low price elasticity.
b) The product has low cross elasticity.
c) The demand of the product will rise.
2) Products have perishable distinctiveness from competitor's
product, assuming the product features are medium distinctiveness.
3) Products have little distinctiveness from competitor's product.
Assuming that:
a) The product has high price elasticity.
b) The product has some cross elasticity.
c) No expectation that demand of the product will rise. Price is the factor
that beats out all other chocolates in the competition.
Promotion
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Place
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Product
Cost
A strong emphasis on target costing, design-to-cost, value engineering,
and design for manufacturability. Minimum product variety. Significant
manufacturing and accounting involvement in development. Suppliers are
well-integrated into the development process. Factory uses high volume
equipment specifically oriented to the product; automated material handling.
Quality /Reliability /Dependability
A disciplined and rigorous product development process. Strong focus
on understanding customer needs and providing products that meet those
needs. Use of techniques like FMEA, FTA, FRACAS, DOE, Taguchi
Methods, poke-yoke, and reliability prediction. Heavy emphasis on testing
and qualification. Processes are oriented to self-checking and adjustment and
use of computer- aided inspection and test equipment.
Time-to-Market
Use of modular design approaches. Sufficient resources to undertake
development processes underway. Continuous surveillance of the marketplace
and understanding of customer needs. Well-defined development processes
based on tightly integrated design automation tools. Well-planned and
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Positioning Strategy
When the list of target markets is made, a company might want to start on
deciding on a good marketing of a product. But an important step before developing
the marketing mix is deciding on how to create an identity or image of the product in
the mind of the customer. Every segment is different from the others, so different
customers with different ideas of what they expect from the product.
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Distribution Strategy
In order to ensure a continuous & efficient distribution, an approximate figure
has to be arrived at for getting the initial orders & to ensure adequate supply so that
any delays or resultant losses are avoided. For this purpose, the company adopted the
consumer response hierarchy model so that, it is ensured that all the company enters
the market with a bang avoiding any problems of late or inadequate supplies. This is
highly essential to support the huge promotional budget, since if the supplies arent at
the right time, all other effort can be in vain.
Market Research Strategy
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Market research is discovering what people want, need, or believe. It can also
involve discovering how they act. Once that research is complete it can be used to
determine how to market your specific product. Whenever possible, try to reduce
risks at the earliest possible stage. For example you could carry out market research
early on and not wait until you are almost ready to enter the market. If early market
research reveals that your business idea has real potential, you can use this
information in planning the build-up of your business. For starting up a business there
are a few things should be found out through market research in order to know if your
business is feasible. These are things like:
Acquisitions and Integration
Buying companies is a popular strategic tool used to fuel growth strategies.
Buying or merging with an existing company can boost your organization's market
share, increase operational efficiency and grant you access to additional talent and
customers. When done right, acquisitions can be a win-win-win for the buyer, the
seller and the customers. When acquisitions do not work out, however, the buying
company can incur significant financial loss, often putting it in a worse financial
situation than it was before the acquisition. Companies should only acquire
organizations they fully understand, in whose industries they have sufficient
experience.
CONCLUSION
Competition will never end so let's not avoid it but face it confidently,
"For a chief executive, unless he knows where he is going no one can take him there".
What's the use of Marketing & Advertising if it does not reach the right people
and yield desired results? Therefore it is necessary for every individual who has
something to sell but no one to buy, to detect the problem areas and try to solve them.
But for this, knowing the right problem is extremely essential otherwise hitting the
33
target in dark means nothing. Therefore, it is rightly said that a "well defined problem
is half done". Once you know your drawbacks only then you can correct it. Therefore,
to know your drawbacks you need to conduct a survey and get information right from
the ultimate users of your product. They should be asked to bring out your drawbacks.
This will help you to not only know your pitfalls but also what your customers want
and their likes and dislikes and while doing so build a good rapport with your
customers. While conducting such surveys you can also advertise your products
among those customers who are not much aware of it.
"There are three ways of doing a thing- the wrong way, the right way and
our way" whichever may be your way the ultimate aim is to achieve the results and
implement them to maximize customer satisfaction we all know competition is
intense then why not take it positively so that it helps us to improve our product
quality, makes customers loyal to us, helps us know our shortcomings and rectify
them. The best way to overcome your competitors is to give your customers what
they expect or probably more than that. To know the customers expectations towards
Amul, I had conducted a market Research of the existing customers, which helped me
to know the satisfaction, awareness and liking among customers for the products of
Amul and analyze the situation and provide them suggestion to improve the situation.
These suggestions if implemented would definitely yield results and
"Ultimately the results matter, how and who does it is immaterial".
As we know that Amul is very big organization and market leader in dairy
products. It has maximum market share in Milk, Butter and Cheese, which are its
main/core products. As we know Amul is a co-operative organization but chocolate
industry is a profitable industry we cant ignore it. With the help of research, company
can find out its week points in chocolate product and can increase its market share
through rectify mistakes. People have believed inAmuls product and they will accept
its chocolates also if effective actions were taken. The survey resulted into following
conclusions:
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Amul must come up with new promotional activities such that people become
aware about Amul Chocolates like Chocozoo, Bindaaz, and Fundoo.
People are mostly satisfied with the overall quality of Amul Chocolate, but for
the existence in the local market Amul must use aggressive selling techniques.
BIBLIOGRAPHY
1. www.amul.com
2. www.google.com
3. www.marketresearch.com
5.
www.dairy.com
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