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Amul and Indias National Dairy Development Board

Group T2

-Ashish K Agarwal -Debasmita Nandy -Gaurav Mukherjee -Rahul Ramesh -Sameep Luthra

Background
Bombay Milk scheme
Exploitatively low prices Restriction on exports Strike by farmers Formation of Kaira District Co-operative Milk Producers Union Limited (KCMPUL) -1946

Industry Analysis: Porters 5 Forces


New Entrants Threat of new entrants is high as there are no entry barriers.

Bargaining power of Suppliers Bargaining power of supplier is low as most of the suppliers are villagers and farmers belonging to the lower income group

Competitive Rivalry Competitive rivalry is high due to : Presence of local brand and other established brands. High demand for milk & milk products.

Bargaining Power of Customers


Bargaining powers of customers is high as various competitors are present specially for the products like chocolate and butter. Low switching costs

Substitute Products Threat of substitute is high because of availability of various other beverages like cold drinks, fruit drinks

3- Tier Structure
State Federation
Marketing & Distribution (Final Consumer)

District- level Co-operatives

Dairy plant, processing, packaging & transportation

Cattle feed, Animal health cover, Artificial Insemination Education

Village Co-operatives

Collection Weighing & Grading Transportation (Farmers to dairy plant)

STRENGTHS
High quality product with low price Wide range of products Innovative and effective ad-campaign Robust distribution network Application of technical manpower and technology like TQM, E-commerce

WEAKNESSES
Supply chain system being very complex Less average milk productivity compared international standards High dependency on villages with weak infrastructure

OPPORTUNITIES
Penetrate international market Expand existing product categories Enter new product category like juices, mineral water etc. Targeting the potential rural market

THREATS
Increasing price A very tough competition in the market with strong competitors like Hindustan Levers, Nestle, Cadbury Inadequate transport facility and poor conditions of roads

CORE COMPETENCY
Amul- The Taste Of India Well established technological infrastructure Availability of surplus cash profits

RESOURCES

Strong top management, Specialised rural managersIRMA

Dr. Kuriens dynamic leadership

CORE COMPETENCY Contd...


Strong supply chain Wide product range at low cost

CAPABILITIES

Vertical Integration

Strategic alliances

AMUL STRATEGY FRAMEWORK


Strategy

Low cost
COST LEADERSHIP

Differentiation

DIFFERENTIATION

Market Scope

Broad

Narrow

COST FOCUS

DIFFERENTIATION FOCUS

Value Chain Analysis


Daily cooperative society

Milk collection Centre

District member Unions

Amul

State level Federation

Retailers

Production

Collection

Processing

Marketing

Distribution

Retailing

What make Amul what it is?


Huge base of vegetarian consumers across India

Sharing of benefits
Strong distribution network Brand identity Visionary leadership Powerful vertical integration

Major Issues facing Amul


Growing competition from private organizations

Losing autonomy due to political intervention


Succession dilemma

Questions

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