1.

0 Introduction:
Anand Milk Union Limited or Amul is an Indian dairy cooperative, based at Anand in the state
of Gujarat. Formed in 1946, it is a brand managed by a cooperative body, the Gujarat Co-
operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.6
million milk producers in Gujarat. Amul spurred India's White Revolution, which made the
country the world's largest producer of milk and milk products. The white revolution was
spearheaded by Tribhuvandas Patel under the guidance of Sardar Patel and Dr Verghese Kurien.
As a result, Kaira District Milk Union Limited was born in 1946. Tribhuvandas became the
founding chairman of the organization and led it until his death. He hired Dr Kurien three years
after the white revolution. He convinced Dr Kurien to stay and help with the mission.

Dr Kurien, founder-chairman of the GCMMF for more than 30 years (1973–2006), is credited
with the success of Amul. Amul has become the largest food brand in India and has ventured into
markets overseas. Amul products are now available in more than 20 countries.

1.1 History of Amul:

Amul starts their journey 65 years back in Anand, a small town in the state of Gujrat in western
India. Back in those days’ farmers who sell milk face difficulties to run their business due to
middlemen. So the farmers went to Vallabbhai Patel for a solution, and he suggested to get rid of
the middlemen and form their own co-operative, which would have procurement, processing,
marketing under their control.

Under the inspiration of Sardar Patel and the guidance of leaders like Morarji Desai and
Tribhuvandas Patel, they formed their own co-operative in 1946.

This co-operative, the Kaira Co-operative Milk Producers Union Ltd, began its journey with only
two village dairy co-operative societies and 247 litters milk daily, which today is known as Amul
Dairy.

Lal Bahadur Shastri, the prime minister of India then decided that the same approach should
become the basis of a National Dairy Development Policy. He understood that the success of the
Amul could be attributed to four important factors. The farmers owned the dairy, their elected
representative managed the village societies and district union, they employed professionals to
operate the dairy and manage its business. Most importantly, the cooperative was sensitive to the
needs of farmers and responsive to their demand.

Amul’s Vision:

“Our Vision is not just to be rated among the top 5 brands of India in Interior Field, but, more
importantly, to strive to attain the leadership position in making our people aware to protect &
save the nature by using plywood and related products for their woodwork.”

Amul’s Mission:

“Our Mission is to manufacture world-class products of outstanding qualities, providing related

services and solutions to our client while utilizing latest technologies, highest business standard,
work ethics Corporate Governance so we can make every customer smile.”

1.2 Literature Review:

Amul is one of the most successful Indian business firms. It provides various
milk products in which its main brand product Amul Butter is also present. Amul begins with a
just little group of milk-producing villagers and now become the largest
milk producing cooperative society in India. It had started with two village cooperatives with
250 litres of milk-producing capacity and now it collects daily a 6.5
million(average) of milk from a very large no of Indian villages. It has become a
hope for poor villagers who were exploited by middlemen before the origin of Amul or
Gujarat milk marketing federation or Kaira union. By originated Amul got its first
chairman Shri Tribhuvandas Patel who through his integrity had the favour of
villagers and understands the needs of cooperative society. Through their
interpersonal faith and cooperation, Amul got this success history besides facing
various difficulties. Gujarat Milk Marketing Federation is a cooperative society. It
did a very good job in milk marketing, making way for poor villager’s earnings. It not only
provides effective returns to the farmers but also take cares of customers interests. It
serves for customers on the basis of Indian ethics. They provide milk with better
nutrients,
better quality products regularly and help in meeting the country’s need for daily
milk requirements.

2.0 Methodology:
We have to look for several things to complete our analysis on Amul. The things we looked for
included:

 Amul’s Applied Business Strategies:

In this sector, we look for their frequently used strategies from the four business strategies.

 Amul’s Internal Factors:

In this part, we look for their internal capabilities and resources such as capital, management etc.

 Amul’s external factors:

Here we analyse their external factor such as their factory, land, pressure from other factors etc.

 SWOT analysis:

Finally, we search for their Strength, Weakness, Opportunities and Threat to better understand
their current and assume their future business condition.

3.0 Findings of Analysis:

3.1 Findings of strategic Analysis;

By studying the business plan and online articles of Amul, we find out that Amul is followings
three strategies models s, and those are:

1. Differentiation model

2. Best Cost provider model, and

 3. Niche or Focus model and

4. Low-Cost provider model.

The justification for Differentiation Strategy:

 The farmers owned the dairy,

 Farmers elected representative to manage the village societies and district union,

 They employed professionals to operate and manage its business,

 They increase milk product’s price in short-term to stable the price in long-term as well
as accelerate the growth of milk production,

 Amul extend its product line and also included other items such as pizza, ketchup etc,

 Amul follows Total Quality Management (TQM) to ensure the product’s quality,

 During Yatrathe, distributors and salesmen are taken to visit Ananda and shown dairy
plants, their upkeep, international standard of hygiene and quality, the practice adopted
for clean milk and above all the co-operative philosophy,

 Amul introduce their own three-tier co-operative model,

 Each milk supplier payment is based on the percentage of fat and the SNF content,

 Any producer can become a DCS member,

 At the end of every year, a portion of DCS’s profit used to share with its members,

 District union provide many facilities to DCS and their members such as feed, veterinary
care, artificial insemination and even training and consulting,

 Some state federation produce feed support other unions,

 Engineers of Amul were innovative,

 Amul outlets follow the franchise model,

 Introduced verities of chocolates,

  The institutional infrastructure – village co-operative, dairy and cattle feed plants and
state and national marketing is owned and controlled by farmers, etc.

The justification for Best Cost provider strategy:

 Amul offers a fair price for their products,

 Amul pattern aims at maximizing profit while ensuring a quality product at a reasonable
price,

 Amul ensures value for the money.

The justification for Focus Strategy:

 Amul expands their business to Bangladesh, USA, UAE, China, Mauritius, Australia,
Singapore, Hong Kong, Cambodia, Philippines, Japan, Sri Lanka and some South African
countries.

 Sugar-free ice cream for diabetes patients,

 Baby food items,

 Launched CHOCOZOO for young children,

 By 2012 Amul increase their outlets 5000 to 1000,

 Its concentrated on healthy chocolate,

The justification for Low-Cost provider strategy:

 Amul provided chocolate products at a lesser than its competitors,

3.2 Findings of Internal Analysis:

There are several internal factors, which help Amul to become the market leader and these are
their core advantages over their competitors. From several of their internal advantages, some of
them are the following:

 Amul has a huge capital,

 They have a perfect management team, who knows how to handle any situation,

 Their research and developing department is so strong, and often developing a new
process,

 They are using advanced machinery,

 They have a well-established distribution network,

 Their suppliers are mainly owned their dairy and they share a strong bond with Amul,

 They introduced the three-tier Anand pattern,

 Farmers choose their own representative to manage their village society and district
unions, as well as they employed professional to manage dairy,

 Amul has a strong marketing team, etc.

3.3 Findings of External Analysis:

There are verities of external factors that make them one of the market leaders. Some of them
are:

I. Bargaining Power of buyers:

 The switching cost of the brand is high for some brand, so the buyers have less
bargaining power,

 The value they get from consuming Amul is greater than another similar brand against
their spending,

 Amul ‘s buyers are spread all over India and in some foreign countries and yet the buyers
do not have any bargaining power against Amul’s superior quality, etc.
 II. Bargaining Power of Suppliers:

 Under the co-operative rules, farmer’s rights are well protected, and they are getting a
good return for their supplies,

 Farmers have limited rights to bargain and have a moderate power of bargaining, etc.

III. Threats of New Entrants:

 It is very difficult for a new competitor to match with Amul’s capital,

 It is very hard to compete with Amul’s reputation,

 The raw material procurement is very difficult for new entrants,

 Amul’s customers are loyal to their brand. So they will not easily switch the brand to a
new brand,

 For a new entrant, it would be very difficult to make distribution network strong as Amul,
etc.

IV. Threats from Substitutes Product:

 The threat from substitutes product is the major competitive pressure for Amul,

 There are different substitutes products are available for different Amul’s products at a
low price,

 These substitutes products are equal in quality,

 The rate of customers switching to substitutes products is very high, etc.

 V. Rivalry Among Competitors:

 The demand for Amul’s product are increasing smoothly,

 In milk product and chocolate categories, they face competition from Cadbury and
Nestle,

 In ice cream categories, they face competition from Kwality Walls Max and Havmor,

 In butter and cheese categories, they face competition from Britannia.

3.4 Findings of SWOT Analysis:

SWOT analysis refers to a company’s strength (S), weakness (W), opportunities (O) and, threats
(T).

Strengths:

 A huge capital based company,

 First mover advantages,

 The proper management team,

 A huge number of distribution channels,

 Well marketing , research and development team,

 Fair pricing,

 Quality products,

 A wide range of product,

 In a strong position to compete with pressure from rivals, new entrants, buyers and
supplier bargaining power, etc.
Weakness:

 Amul’s chocolate product could not gain a fair market share,

 Difficult to compete with international brands,

 The government has allowed free import of dairy products, which open a door for
importing subsidized dairy product,

 Difficult to control cost operation in the international market,

 Having so many outlets increase expenses, etc.

Opportunities:

 Milk and milk related products demand increasing day by day,

 Amul expanding their business to foreign countries,

 Being an established brand they can introduce new products to their product line, etc

Threats:

 Substitutes products are great threat to Amul,

 Local companies can create problems for them,

 Low- cost providers are creating difficulties for them,

 Their product such as ice cream is a seasonal product. Which will only run in summer,
etc.

4.0 Conclusion:
Amul is one of the successful Indian organization. The reason for their success is their co-
operative management system. They bring the farmers together and make fortune for them as
well as own self. Which teach the whole world a proper management system for dairy products.