Amul's products were priced 20-40 % less than those of its competitors.

Analysts felt that Amul could price itsproducts low because of the economies of scale it enjoyed.

Future of Amul Increase the Investment in order to increase the sales (invest Rs 3000crore and target sales sales from Rs 9,774 crore in 2010-11 to Rs 27,000 crore by 2020 three fold increase)
How to do it: Creative Marketing Consumer education Product innovation Leverage on rising income level and growing affluence in India and Amuls economies of scale by further expansion Exapnding the market for its existing products Tapping the rising demands for new value added products Multifold capacity expansion for major product categories like milk powder, ice cream Paneer, cheese ethnic sweets curd ghee and other dairy products Provide nutritious feed to milch animals Expand its cattle feed manufacturing capacity more than four times to 12000 MTs per day by 2020

Expand the milk Processing capacity Increase the range of milk products from 40 by setting up

New lines to manufacture milk powder, ice-cream, the pro-biotic range of beverages and cheese.
Widen market and distribution network; reach out to more cities and towns, Strengthen backward linkages by improving infrastructure and double cattle feed production Launch new products

Popularize certain Products like gulabjamun chocolates which are not as popular as other products Penetrate in Rural Areas Through advertising

Increase the Supply Side

Procurement is done from other states like WB Maharashtra Gujrat rajasthan Register the cooperatives in these northern states to increase the milk procurement further to meet the demands in NCR region This will increase milk procurement by 4% annually It would reduce the transportation cost

Avoid Sales tax Get into the agreements with other states cooperatives like as we have with UP federation for repackaging and selling the milk in Agra and Bareilly It would lead to avoid sales tax that is charged when transferring the goods from outside the sates.

Sources of Funds: Borrowing s and from the National Dairy Development Board and commercial banks.

Leverage the economies of scale as it has been the biggest advantage for GCMMF and we have been able to sell the products 20 to 40 percent lower than its competitors.

Strenghts: Largest food brand in Asia and India High quality and low price Introduced TQM Worlds largest pouched milk brand Highly diverse product mix

Weekness: Strong dependency on Weak Infrastructure Risk of highly complex chain Short shelf life of its products Alliance with third parties

Opportunities: Penetrate into International market Use internet to sell its products Diversify product portfolio to enter into new product categories

Threat : Rising Prices of milk Competition from MNCs Ban on Export of milk powder

Competitors: Parag Milk Foods (Go and Gowardhan brand). AREA OF COMPETITION: Cheese and ghee. PERFORMANCE: Targeting the high-end cheese segment. Claims a 30 per cent share in Mumbai modern retail outlets for packaged cheese. Britannia AREA OF COMPETITION: Cheese, mainly.

PERFORMANCE: A 24per cent market share in the Rs 300-crore cheese market and can chip away at Amul's dominant 65per cent share.
Kraft-Cadbury AREA OF COMPETITION: Plans to launch its range of cheese using the Cadbury distribution network. Mother Dairy

AREA OF COMPETITION: In milk and has big plans for cheese, ice cream and butter.

PERFORMANCE: Amul continues to dominate pouched milk markets like Kolkata and Mumbai.
Groupe Danone

AREA OF COMPETITION: Flavoured milk. PERFORMANCE: Just started test marketing its chocolate flavoured milk in Hyderabad.
HUL

AREA OF COMPETITION: Ice cream. PERFORMANCE: Amul is the market leader with over 35per cent share in the Rs 1,300-crore segment. HUL has a share in single digits and focusses on the upper end of the market.
Zydus Wellness

AREA OF COMPETITION: Butter. PERFORMANCE: Amul dominates the Rs 800-crore butter market with an 80 per cent share. Zydus, with its product Nutralite, claims to have garnered a 75 per cent share of the "butter alternative" market.
Amrit Group AREA OF COMPETITION: Plans to launch value-added milk products like cheese, paneer and ice cream in Eastern India. ... And Amul's Counters More procurement: Amul will procure milk from more catchment areas. For instance, it recently started procuring milk from the Kutch-Saurashtra area. Product diversification: Take cheese, for instance. Amul is investing in capacities to build more varieties of cheese. It's also focussing on more fresh products like dahi, flavoured milk, etc. Focus: Amul is focussing on its core strengthsdairy products. Segments like pizza are no longer a focus area. Invest in the future: Amul is looking not just a year or two ahead. It has a plan in place, which includes investments to the tune of Rs 2,600 crore to tap market opportunites by 2020

Amul's Sheer Spread, Size and Depth...

Members: 13 district cooperative milk producers' unions Producer Members: 2.79 million Village Societies:13,328

Total Milk Handling Capacity: 11.22 million litres per day Total Milk Collection: 3.05 billion litres ('08-09) Daily Average Milk Collection: 8.4 million litres ('08-09)

... as Well as its Unique Competitive Advantages...

Procurement: Amul's low-cost, high-quality milk procurement network allows it to price its products competitively. Ability to catch up: Amul got into ice creams late. It got into the pouched milk markets like Delhi despite the presence of established players. Now, it's on top in these markets and categories. Amul has over 5,000 parlours in the country: It plans to take that number to 10,000 within a year. Not afraid to fail: Amul has launched more than 50 products in less than a decade. Some like pizzas, chocolates, Amul card have not done well. That has not deterred it from trying new things.
... Help it Lord Over the Indian Market

Butter:80% of the Rs 800-crore organised market Cheese: Controls 65 per cent of the Rs 300-crore branded market Pouch Milk: The#1 pouched milk brand in India UHT Milk*: 60 per cent Milk Beverages: 70 per cent Ice Cream: About 35 per cent

Another key parameter for success in the dairy business is backward integration. "In the fresh foods business, procurement is everything. The farmer is the backbone of this business," says Vyas. That would explain why big names like Nestle and Britannia couldn't make a dent in the butter and pouched milk markets, respectively. "Without backward integration, you are bound to fail. You have to be a C-to-C (cow to consumer) company to succeed. You cannot procure milk from somebody, slap a label, advertise it and hope to succeed. That's been the failing of the MNCs in India it's a long-term game of patience," explains Sodhi. Amul's not-so-successful outings with pizzas, chocolates and an Amul card (a kind of a debit card for Amul customers). Every evening, Vyas gets an Excel sheet on his e-mail, something called aaj ka scorecard (today's scorecard). It details sales data across product categories, from paneer to pouched milk, from gulab jamun to ice creams

By 2020, at the current growth rate (of 28 per cent), we expect to be generating revenues of around Rs 30,000 crore. If we go by our 2008 growth rate (23 per cent), we should be about Rs 28,000 crore," says Vyas. "That means that everything we have built

in terms of capacity, market size since 1947 will have to be doubled in the next 12 years." Amul has already ordered equipment to build plants to address market opportunities in 2015. Insiders reveal that preliminary groundwork, including site identification, for a massive milk powder plant at Ahmedabad (to be commissioned five years hence) is under way. In his annual address in June 2009, P. Bhatol, Chairman, GCMMF, had suggested that to create such infrastructure, investments to the tune of Rs 2,600 crore would have to be made by 2020.

Milk Production from 1950 to 2020 1950 17 million tones 1996 70.8 million tones 1997 74.3 million tones (Projected) 2020 240 million tones Expected to reach 220 to 250 million tones in 2020. India contributes to world milk production rise from 12-15 % & it will increase up to 30-35% (year 2020).

Procurement channel and Distribution channel

Lessons for managing large networks Longterm prespective Simultaneous development of markets and suppliers Network partnership vs Ownership Cs leadership and value for money Technology and information sharing

Direct Retailing: It has entered in direct retailing Amul utterly delecious parlour created in major cities

Amul plans to create a large chains of such outlets to be manged by franchiseees throughout the country More than 2000 parlours with turnover of 200 crores Tie up with Wal mart Export is in 15 countries Plan to open uo 1000 Amul parlor by the end of 2010 Milk production 33.1 million litre per day by 2020

Commenting on the results, Parthibhai G. Bhatol, chairman of GCMMF informed that last year, their turnover was ` 6711 crore (` 67 billion) and this year Federation has registered a quantum growth of 19.3 percent to reach ` 8005 crores (` 80 billion). This is an extremely impressive growth when viewed from the perspective of drought effect and resultant drop in milk procurement as well as 27.7 percent growth that we achieved in the year 2008-09, commented Bhatol.

Federation has justified its undisputed leadership in milk business by achieving sales growth in pouch milk category by more than 21 percent and in value terms by 32 percent from existing markets only. We have achieved number one status in pouch milk sales in Delhi this year. 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

Further commenting, he said Our Masti Dahi sales grew at an impressive rate of 46 percent. Ice-cream sales registered a value growth of 22 percent. Amul Cheese sales increased by 20 percent. ultra-high temperature (UHT) milk also grew strongly at 14 percent along with Amuls Fresh Cream milk brand registering 39 percent growth. Our beverage sales grew by 25 percent and our chocolate sales also registered an encouraging growth of 30 percent. FY11
during his AGM speech, projected company plans to achieve a turnover of about Rs 30,000 crore by 2020. "The sales for FY11 came in at about Rs 9774 crore, up 21% from last year," she points out

She reports that the company has plans to extend its focus to retail formats and value added dairy products in the coming months. The butter category grew at about 26% last year and the processed cheese category grew at about 29%. "Amul Beverages, a relatively new category for the company grew at about 28% and this will be one of the main core focuses for the company, going forward,"

Retail would be another important focus area. The company has been testing a format called Amul Cafe, which is a quick food service format. "A 1,000 square feet outlet has currently been inaugurated in Ahmedabad,"

The company now plans to expand Amul Cafes to other cities, especially tier I cities. "Remember, they already have Amul Parlours across the country," she says. Amul has about 6,000 parlours presently and plans to add 4,000 more this year. "You could, therefore, see significant chunk of revenues coming in from the retail segment, going forward," she sums.