ASSIGNMENT NO - II

CORPORATE STRATEGY

SUBMITTED TO SUBMITTED BY
Dr.NEERAJ SHARMA NAME- KARISHMA

CLASS - MBA 4TH

ROLL NO - 1811717
 AMUL
ANAND MILK UNION LIMITED
 INTRODUCTION

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 found in several Indian languages. AMUL products have been in use in
millions of homes since 1946. AMUL Butter, AMUL Milk Powder, AMUL Ghee, AMUL
spray, AMUL Cheese, AMUL Chocolates, AMUL Shrikhand, AMIL Ice cream, Nutr
AMUL, AMUL Milk and AMUL have made AMUL a leading food brand in India.
(Turnover: Rs.67.11 billion in 2008-09). Today AMUL is a symbol of many things. Of high-
quality products sold at reasonable prices of the genesis of a vast co-operative network of the
triumph of indigenous technology of the marketing savvy of a farmers' Organization and of a
proven model for dairy development.

BCG Matrix Model:

The BCG model is a well-known portfolio management tool used in product life cycle theory. BCG
matrix is often used to prioritize which products within company product mix get more funding and
attention.

The BCG model is based on classification of products (and implicitly also company business
units) into four categories based on combinations of market growth and market share relative
to the largest competitor.

BCG Matrix of AMUL

SBUs Cheese Chocolate Milk Drinks Ice Creams

Fruit
Cheese Cheddar Milk AMUL AMUL Prolif
n Tricone
Spread Cheese Chocolate Kool Lassee e
Nuts
Market
Growth 8 14 6.5 5.5 7 9.5 11 6
Rate(%)
Relative
2 1 3.5 5.2 0.5 1.5 3.2 2
Market
 Analyzing the above two tables indicating the market growth rate of the SBUs and their
relative market share the BCG matrix can be plotted as follows:

Cheddar
Cheese

Prolife

Tricone
Amul
Cheese
Spread

Fruit &
Nut
Amul
Milk
Kool
Chocolate

High
Relative Market Share

Placing products in the BCG matrix results in 4 categories in a portfolio of a company:

 BCG STARS (high growth, high market share)

Stars are defined by having high market share in a growing market. Stars are the leaders in
the business but still need a lot of support for promotion a placement. If market share is
kept, Stars are likely to grow into cash cows. AMUL Cheddar Cheese lies in star category
in India because the consumption of fast food is increasing at a very fast rate and majority
of the fast foods have ‘Cheddar Cheese’ as an ingredient and AMUL being a leader in
dairy products in India has captured a high market share in this market.

 BCG QUESTION MARKS (high growth, low market share)

 These products are in growing markets but have low market share. Question marks are
essentially new products where buyers have yet to discover them. The marketing strategy
is to get markets to adopt these products. Question marks have high demands and low
returns due to low market share. These products need to increase their market share
quickly or they become dogs. The best way to handle Question marks is to either invest
heavily in them to gain market share or to sell them. AMUL Prolife ice cream is meant for
health/calorie conscious people. This product lies in the Question Mark category because
growth rate for its market is high as people are becoming more and more calorie conscious
in India but the market share is low for this product as people are not well aware of
existence of this product. Similarly Tri cone is also a Star but as its market growth rate is
not high it is tending to be a cash cow.

 BCG CASH COWS (low growth, high market share)

Cash cows are in a position of high market share in a mature market. If competitive
advantage has been achieved, cash cows have high profit margins and generate a lot of
cash flow. Because of the low growth, promotion and placement investments are low.
Investments into supporting infrastructure can improve efficiency and increase cash flow
more. Cash cows are the products that businesses strive for. AMUL Lassee, AMUL
Cheese Spread and AMUL Kool lie under this category because market growth rate for
these products are not that high but performance of these products are stable. AMUL Kool
with 70% market share has the largest market share in Flavored Milk Category in India.

 BCG DOGS (low growth, low market share)

Dogs are in low growth markets and have low market share. Dogs should be avoided and
minimized. Expensive turn-around plans usually do not help. AMUL Fruit And Nut
chocolate has very low market share but it can become a cash cow if some modifications
are made. But in case of Milk Chocolate it would be better if the company divests it as it is
not generating any revenue.
GE NINE CELL MATRIX OF AMUL:

Resource allocation recommendations can be made to grow, hold, or harvest a strategic

business unit based on its position on the matrix as follows:

 Grow strong business units in attractive industries, average business units in

attractive industries, and strong business units in average industries.

 Hold average businesses in average industries, strong businesses in weak

industries, and weak business in attractive industries.

 Harvest weak business units in unattractive industries, average business units in

unattractive industries, and weak business units in average industries.

There are strategy variations within these three groups. For example, within the harvest group
the firm would be inclined to quickly divest itself of a weak business in an unattractive
industry, whereas it might perform a phased harvest of an average business unit in the same
industry.

While the GE business screen represents an improvement over the more simples BCG
growth-share matrix, it still presents a somewhat limited view by not considering interactions
among the business units and by neglecting to address the core competencies leading to value
creation. Rather than serving as the primary tool for resource allocation, portfolio matrices
are better suited to displaying a quick synopsis of the strategic business units
COCA COLA
 INTRODUCTION

The Coca-Cola Company, American corporation founded in 1892 and today engaged
primarily in the manufacture and sale of syrup and concentrate for Coca-Cola, a sweetened
carbonated beverage that is a cultural institution in the United States and a global symbol of
American tastes. The company also produces and sells other soft drinks and citrus beverages.
With more than 2,800 products available in more than 200 countries, Coca-Cola is the largest
beverage manufacturer and distributor in the world and one of the largest corporations in the
United States. Headquarters are in Atlanta, Georgia.

The drink Coca-Cola was originated in 1886 by an Atlanta pharmacist, John S. Pemberton
(1831–88), at his Pemberton Chemical Company. His bookkeeper, Frank Robinson, chose the
name for the drink and penned it in the flowing script that became the Coca-Cola trademark.
Pemberton originally touted his drink as a tonic for most common ailments, basing it on
cocaine from the coca leaf and caffeine-rich extracts of the kola nut; the cocaine was
removed from Coca-Cola’s formula in about 1903. Pemberton sold his syrup to local soda
fountains, and, with advertising, the drink became phenomenally successful. By 1891 another
Atlanta pharmacist, Asa Griggs Candler (1851–1929), had secured complete ownership of the
business (for a total cash outlay of $2,300 and the exchange of some proprietary rights), and
he incorporated the Coca-Cola Company the following year. The trademark “Coca-Cola” was
registered in the U.S. Patent Office in 1893.
 BCG MATRIX OF COKE:

In the beginning there was Coca-Cola, a single core product, geographically located in the
US. Overtime, this singular core product had become established in its home market by
increasing market share and product usage (Market Penetration Strategy). Coca-Cola was
later launched into foreign markets and competed within the international arena. This Market
Development Strategy was undertaken by targeting new geographical areas and target
segments. As these foreign markets developed further, the Coca-Cola Company was faced
with the problem of how to further penetrate them. The solution was simply to develop new
products (Diet Coke, Fanta and Sprite), which over time have also become core products
(Product Development Strategy).

Cash Cows

They are the business products which usually bring a significant amount of income to the
company. The products can be able to generate enough sales which are capable of gaining
a significant share in the market that it specializes. The Coca-Cola Company has a
particular line of products, and these are beverages, and this industry has significantly
 matured over time and various companies who are now selling their brand of cola. The
Coca-Cola brand has been operating as a cash cow because this brand is being sold in 200
countries in a mature beverage company (Arnett, 2016). The industry is mature, and the
company requires just little effort to keep sales high
Stars

Star products have a high market value than the other products produced by the same
company. Star products are in a market that is in the development phase, and further
addition of market share is possible. Bottled water produced by the Coca-Cola Company is
the star because mineral water industry is evolving all over the world attracting more
customers (Arnett, 2016).

Question Marks

Question marks products have a dubious future market, and they cannot be easily
evaluated and understood. These types of products are already in the market although they
have not established themselves like the star products and therefore they aren’t
recognizable as stars. Although the market has their growth opportunities, these products
have not yet taken the benefits of these opportunities in an efficient manner. Minute Maid
product from the company is one of such products (Arnett, 2016). Although in some
places it has high sales volumes it is not widely spread like coke.
Dogs

This category of products consists of products that are part of the mature industry, but they
have a small feasibility to the company because they generate very minimal revenues. The
company is forced to take minimum efforts towards their sales and Coca-Cola’s product in
this category is Coca-Cola life which has not yet gained the expected market share (Arnett,
20116)
GE NINE CELL MATRIX:
Several variables determine the market attractiveness for a service, product, and brand. They
include1

 Pricing trends
 Industry risk of return
 Market segmentation
 Distribution network
 Market fertility or profitability
 Market volume
 Market augmentation or growth
 Rivalry or competitive strength
 For Coca Cola Company, the first step a list of factors which help the country to
determine the industry attractiveness. There are actually some preferred factors in the
 industries but Coca Cola Company should take advantage of the most appropriate
factors for the business such as using a various business strength areas.
 Assigning weights and rating: the second important element is to give priority and
effort to the most important areas which are going to benefit the business
 Calculate final scores – a total score can be drawn and achieved by multiplying the
rate and weight of each factor.

Conclusion:
In sum, this report gave an analysis of Coca Cola Company. Highlighting the strengths and
attractiveness of the company using the EG Matrix strategy. It has been noticed that the
company's emphasis on market penetration and other non-diversification strategies, therefore,
it has been assumed that Coca-Cola is a relatively risk-averse company comparing with other
companies.