Porter five forces:

Bargaining power of supplier of milk

Triumala dairy company require quality milk suppliers in proximity to their plants due to
perishable nature of the raw material. Bargaining power of supplier is very large by lack
of substitutes of supplier products (milk) and their capability to forward integrate as milk
processors. Only large scale milk producers pose a potential threat for forward
integration. Since milk production in Hyderabad largely takes place in unorganized sector
with small herd size. This threat is largely curtailed. Overall, after summing up the above
mentioned factors, bargaining power of suppliers in the dairy products industry is fairly
high.

Bargaining power of buyer

Number of buyers for this industry is not limited and neither do they make bulk purchase.
The major threat that industry faces is due to standardization of products among dairy
players which fairly reduces the customer switching costs. Every player today has similar
products on offer be it skimmed milk preparations, flavored milk, yogurt or other healthy
dairy products. Therefore the bargaining power of buyers, though not high does exist at
moderate levels.

Threat of new Entrants

The increase in the cost of doing business minimizes the chances of new entrants. Hence
Innovating into new product and supply processes may cause threat of new investment.
Competitiveness improves when other non-milk benefits were considered,
Results from cost/benefit analysis showed that losses from collecting points were mainly
due to poor cost management and low throughput. Formal sector milk processors
operated below capacity and with high cost of operations. Examination of a large UHT
processor also showed that the large losses were due to operation at low capacity and
poor cost management.

Threat of substitutes:

Quality is the main driver of demand for imports as these are perceived to be of higher
quality to local products. There are a variety of local product substitutes for all milk
product imports.
Therefore, the degree to which demand for imported dairy products should threat for
substitute.
Rivalry:

High value specialty dairy products are increasingly being produced by a number of
micro-processors and small-scale/cottage milk processors all regions of the country.
The key products by the cottage industry are yoghurt, ice cream, ghee, sour butter,
cheese and cream, with yoghurt and ice cream being the most commonly produced,
and some renowned brands have emerged.

Market Structure:
Tirumala milk product private Ltd of market system are perfectly competition. As price are
determined by demand and supply forces. An individual buyer or seller has no control over price.

Features: 1) Large number of small buyer and seller.

2) Homogenous products are available in market.
3) Perfect knowledge - buyers have detailed knowledge about market as well as
products.
4) As seller has freedom to enter in market as well as freedom to exit.
5) Seller can easily move their business from one location to other.
6) As buyer do not have to pay extra transportation cost.

A firm under perfect competition market is price taker not price maker. And this firm earn
normal profit in long run.
Because of following reason: 1) large number of seller.
2) Homogeneous products
3) Perfect knowledge.

Competitors :
1. Amul – Anand Milk Union Limited, Gujarat
2. Nandini Milk – Karnataka Milk Federation
3. Mother Dairy – Noida, Uttar Pradesh
4. Dudhsagar Dairy – Mehsana, Gujarat
5. Dynamix Dairy – Baramati, Maharashtra
6. Milma Milk – Kerala Co-operative Milk Marketing Federation

7. Aavin Milk – Tamil Nadu Co-operative Milk Producers Federation

8. Sanchi Milk – Madhya Pradesh State Cooperative Dairy Federation

9. OMFED Milk – Orissa State Cooperative Milk Producers Federation

10. Sudha Dairy – Bihar State Milk Co-operative Federation

11. Verka Milk – Punjab State Cooperative Milk Federation

12. Milky Mist Dairy – Erode, Tamil Nadu

13. Hatsun Agro Product

14. Heritage Foods

15. Kwality Ltd