Vision and mission statements and objectives

Vision
 Amuls vision is to provide more and more satisfaction to farmers,
employeesand distributors.

Mission
 We at GCMMF (Gujarat Co- operative milk marketing federation) endeavor
to satisfy the taste abd nutritional requirements of the customers of the
world. Through excellence in marketing by our committed team. Through
co-opeartive networking. We are committed to offering quality products
that provide best value for money.
Objective
 The objective of Amul is to spur the White Revolution in the country and
make India the largest producer of milk and milk products in the world.
 The cooperative is sbared between over 2.8 million dairy producers and tbr
three- tier Amul model has increased India’s milk production on an
incredible scale.
 To capture the largest share of market
 To provide maximum customer satisfaction
 Continue product modification and improvement effort to increase custiner
benefit and reduce cost.
 To meet the highest international standards of quality
 To expand production capacity
Products of Amul
 Amul milk
 Bread spreads
 Cheese
 Paneer
 Curd / Dahi
 Beverage range
 Ice cream
 Ghee
 Milk powder
 Chocolates
 Fresh cream
 Mithai mate
 Happy treats
 Amul PRO
 Bakery products
 Amul puffles
 Mithai range
 Roti softner
 Panchamrit
 Amul sour cream
 Amul cattle feed
 Amul recipies
 Shrikhand
 Nutramul
 Butter
 SWOT analysis

Amul is a really strong and dominant brand in its category. The SWOT

Analysis of Amul that I have shared with you below is based on my
understanding and my research of the success story of Amul.

Strengths of Amul

Strengths are always internal to a company. A strength is something that comes

from within the company, from its people, its process or the resources employed by
it. Here are the strengths from the SWOT Analysis of Amul.

1. Investment in Technology

Amul has experienced exponential growth in the last few decades. The company is
continually investing in adaptive and revolutionary technologies within the dairy
industry. The company is targeting a turnover of Rs. 50,000 crore in the fiscal year
2020.
2. Production Capacity

Amul is one of the largest manufacturers of milk and dairy products in the world. The
company is managed by the Gujarat Co-operative Milk Marketing Federation Limited,
which is a dairy producers cooperative which supplies the company with almost  18
million liters of milk daily.
3. Market Share

Amul has transformed itself into the market leader of milk and dairy products in the
country. For instance, Amul has a market share of 33 per cent in the
organised ice cream industry. The ice cream market is expected to grow by 30
per cent.
Amul has expanded its ice cream product and business portfolio by opening
standalone Amul ice cream stores all over the country.
Furthermore, the flavoured milk industry in India is also expected to grow by 20 per
cent, and once again, Amul is a market leader in flavoured milk in India.

4. Strong Brand Value

Amul is one of the most recognizable and valuable brands in India. The Amul girl,
the company’s mascot which features on its advertisements is one of the oldest and
most iconic brand mascots which Amul uses even today.
None of the milk or dairy products brands in India has come close to the public
image or brand value which Amul enjoys in the Indian market.

5. Quality

One of the primary reasons for Amul being one of the most trusted brands in Indian
and having a strong and loyal consumer base is its quality. Amul has never faced
any significant issues pertaining to its quality within the Indian market . The
company has also maintained transparency concerning its quality control practices.
Amul maintains excellent relationships with the health department and government
agencies. Validation from these authorities further develops trust within the minds of
the consumers about the quality of Amul’s products.

5. Large Consumer Base

The company has a large consumer base which spreads across the urban and rural
regions of the country. This wide-reaching consumer base has allowed the company
to maintain distinct leverage over its competitors
 Weaknesses of Amul

Just like the strengths, weaknesses are also internal to the brand or the company.
You could see it as lack of certain aspects in the business that makes it vulnerable.
Sometimes, certain strengths bring with them certain weaknesses. Examples of that
is, however, the matter of another blog post. 

So, here are the weaknesses from the SWOT Analysis of Amul.

1. High Operational Cost

Amul has a high operational cost due to its massive size and complex structure. This
can become problematic for the company if the company experiences fall in
demand.

The company also heavily depends on the dairy unions and communities  for
its supply of milk. As the needs of the dairy community are changing with them
demanding higher prices for their produce.
These issues can add up to the  operational cost of the company and lower its
profit margins
2. Lack of Success in Certain Areas of Portfolio Expansion
Amul has expanded its product portfolio to add products such as butter, ghee,
buttermilk, flavored milk, ice cream, chocolates, cheese, creams, sweets and more.
However, not every product of Amul within its portfolio has tasted the same
amount of success For instance, Amul’s chocolates have not been able to
replicate the success of its ice cream brands. Amul chocolates have a tiny market
share in the chocolates, sweets and confectionery market in India.

3. Frequent Legal IssuesThe company has faced legal issues in the recent

past wherein Amul chose to advertise its products while disparaging the brand and
products of its rivals. This led to Hindustan Unilever filing a lawsuit against Amul in
the Bombay High Court. In 2017, The Bombay High Court passed a verdict in favour
of Hindustan Unilever. This caused the company a lot of embarrassment and has
also contributed to tarnishing the public image of the company.

Opportunities for Amul

In the SWOT Analysis, Opportunities are the points that can be and should be
converted to the strengths of the company. In the case of the SWOT Analysis of
Amul, I have listed below the opportunities that can be worked on by Amul.

1. High per capita Milk consumption

India is a high milk consuming nation with milk and dairy products being an
essential component of the Indian diet. According to research, Indians consume
almost 100 liters of milk per annum.
India has a billion plus population which is only increasing. This growth in population
and high milk consumption opens up opportunities for Amul to expand its production
capacities and acquire new consumers.

2. International Expansion

Amul can serve global markets. The brand can expand into overseas markets
such as the Middle-East and the Asian markets by aggressively targeting Indian
expats living in these countries. Amul can organically broaden its international
presence and consumer base.
3. Expansion of Product Portfolio

Amul can invest in research and development or adopt a mergers and acquisition
strategy to expand its product line. Amul has an extensive distribution network
which can be used to sell its new products into the market, and the substantial
brand value and trust of the consumers will also enable easier acceptance from the
consumers.
 Threats for Amul

The way a company should take care of the threats is by working on its strengths to
mitigate the effects of threats. Some organisations who are in a niche, niche down
further to mitigate the risks of a competitive environment. I have listed below some
of the Threats for Amul.

1. Increasing Competition

Amul is facing increasing competition in milk and dairy products sector from
brands such as Mother Dairy, Aavin, Kwality Ltd, Nadini Dairy, HUL and other local
players. Amul is also facing increasing competition within the ice cream sector from
Kwality Walls, Baskin Robins, Havmor, London Dairy and other domestic brands

2. Growing trend of Veganism in India

Many people in India are turning towards veganism , which implies that these
people do not consume dairy or dairy products. This can impact the demand for
Amul’s milk and dairy products if the popularity of veganism increases and spreads
across different parts of the country.

3 - Negative Media Coverage – Negative media coverage has not been

beneficial for Amul’s operations. It has affected its sales and forced them to
issue statements garnering unwanted media attention.
AMUL'S STRATEGIES
I) Forward integration

Forward integration is a business strategy that involves a form of downstream vertical integration
where by the company owns and controls business activities that are ahead in the value chain of its
industry such as direct distribution or supply of company’s product. This strategy is used by Amul.

Amul produces good quality milk and chocolate. Earlier Amul used to supply its milk and chocolate
to other chocolate milk producers. Now Amul produces its own chocolate milk and sells its brand
called Amul Kool Koko. Instead of supplying to other companies milk and chocolate to produce
chocolate milk, Amul started producing and selling its own chocolate milk brand.

Similarly, Amul instead of supplying its milk to other companies to make Paneer, Amul have started
producing and selling their own Paneer brand called Amul paneer.

Intensive strategy

Market development- Amul is now shifting its focus from urban to rural markets and smaller towns.
Amul is capturing the market of diabetes and health-conscious people through sugar free ice cream
which is a variation of existing product. Amul he is also increasing its market base through new
version which is the Amul Tazaa. Which has longer shelf life compared to normal fresh milk .

Product Development- Launching new products such the Amul cool and Amul Khool café which are
targeted the younger segment of the market . Launching new flavours of ice cream . The company
has also introduced various chocolates, buttermilk , lassi and various other products which helps to
increase the market share and sales of Amul.

Market Penetration- Amul Motivates more consumers to purchase products in the market its
already serving. The strategy that company adopts is increase in the number of retail stores it has
that sell its Products .it also ensures that all the stores have complete products so that all products
can be sold . The company is also forming strategic alliances with large retailers to dedicate shelves
for the product of Amul .

Pricing Strategy: India is a price sensitive market, hence,

Amul tries to cater to the needs of all the Indian market
segments keeping in mind the wallet size of its target
customers without compromising with the product quality.
Amul deals in daily need dairy products like milk,butter,
cheese, ghee, cream, ice-cream at comparatively lower prices
offered by its competitors which in return helps Amul to
capture huge market share. 
Segmentation, Targeting, and Positioning Market
strategy : Amul's target segment is the mass population,
people of all age groups and demographics enjoying Amul's
dairy products, as Amul's dairy products are a common
product for all. As it has a very vast product portfolio, the
company doesn't differentiate in its customers but uses Mass
Marketing principle,and this strategy has proven itself to be
the most suitable one. Amul's target audience are the regular
users and middle class people. However, for products like
Butter and Cheese, both upper middle class and lower middle
class people are the target audience. Positioning Strategy
used by Amul is at the top of the mind, as it got some
leverage for being the first brand which comes in mind when
talking of milk, cheese, butter, ice-cream or any other dairy
product from Amul's product portfolio.
Innovation: Amul has always been known for coming up with
new innovative products for different customer segments.
For its continuous innovation, the brand won the “CNN-IBN
Innovating for Better Tomorrow Award” and “World Dairy
Innovation Award” in the year 2014. The three-tiered Amul
Model helped the cooperative to change from its traditional
methods to more efficiently functioning one.

Product portfolio: Amul  has a really wide product line due

 

to which it can run Amul shoppes's and also maintain its

products presence in market, especially at retail level. Amul
has a diversified product portfolio and has been able to cater
to the needs of all the segments from kids to old alike. Amul's
 product portfolio analysis indicates that its Butter and Ice
cream are cash cows for it.
Brand equity strategy: Due to the quality products, the top of the mind positioning , Reliable and
strong distribution and supply channels, and finally the point of purchase branding and advertising of
the Amul girl, Amul is at very strong position when its brand equity is concerned. Amul's brand worth
is more than 3.8 billion which is ecpected to cross 4 billion mark in near future, but the dropping
value of rupee and economy slowdown may cause the difference.

Amul Strategy evaluation

Assessment Matrix

Strategies Have major changes Have major changes Has the frim
occurred in the occurred in the firms progressed
firm’s internal external strategic satisfactorily toward
strategic position? position? achieving its stated
objectives?

1. Yes yes yes

2. No yes yes

3. Yes yes yes

4. Yes yes yes

5. Yes yes yes

AMUL‟S SECRET OF SUCCESS:

The system succeeded mainly because it provides an assured market at

remunerative prices for producers' milk besides acting as a channel to market
the production enhancement package. What's more, it does not disturb the
Argo system of the farmers. It also enables the consumer an access to high
quality milk and milk products. Contrary to the traditional system, when the
profit of the business was cornered by the middlemen, the system ensured
that the profit goes to the participants for their socio-economic upliftment and
common good. Looking back on the path traversed by Amul, the following
features make it a pattern and model for emulation elsewhere. Amul has been
able to:

Provide a support system to the milk producers without disturbing their

agroeconomic systems

Even though, growing with time and on scale, it has remained with the
smallest producer members. In that sense, Amul is an example par excellence,
of an intervention for rural change.

Bring at the command of the rural milk producers the best of the technology
and harness its fruit for betterment

Produce an appropriate blend of the policy makers farmers board of

management and the professionals: each group appreciating its roles and
limitations

Plough back the profits, by prudent use of men, material and machines, in the
rural sector for the common good and betterment of the member producers
and the Union looks after policy formulation, processing and marketing of milk,
provision of technical inputs to enhance milk yield of animals, the artificial
insemination service, veterinary care, better feeds and the like - all through the
village societies. The village society also facilitates the implementation of
various production enhancement and member education programs
undertaken by the Union. The staff of the village societies has been trained to
undertake the veterinary first-aid and the artificial insemination activities on
their own.

BCG Matrix of Amul

Description on BCG Matrix: BCG growth-share matrix is based on the

observation that the company’s business units can be classified into 4
categories (Dogs, Stars, Cash Cows and Question Mark) based on combinations
of growth rate and market share which is relative to the largest competitor,
hence the name came in as a growth-share matrix.

Dogs: These are the products with low growth or market share 
Dogs are those products that have low growth or market share and have a very
limited chance of growing into a profitable business unit for the company.
Limited chances of growth mean that the management needs to be very
cautious with the investment decisions in this business unit or product as it will
not yield any greater benefit to the organization. would need. These business
units or products are cash traps and will not yield any profit for the
organization and therefore are not seen as a useful source of earning.
Cash cows: These are the products which are in low growth markets with high
market share.
When the market share of a product is high and is being sold in an industry
that is not expected to see any significant growth in the future, then the
product can be considered as a Cash Cow.
Cash Cow business units or products are the best revenue generators for the
organization and require very low investment to sustain their profitability.
Since the market share of these business units or products is not expected to
experience massive gains but their current market position makes them a high
revenue generator.
Stars: These are the products which are in high growth markets with a high
market share.
There are some products which have high market share and have the potential
to grow more in the future. The industry dynamics are also supportive of the
growth as the industry is in the phase of development as well. These products
have the potential of being positioned as cash cows owing to the growth
prospects.
Question marks: Products in high growth markets with a low market share.
These are the business units or products which are the problem child for an
organization because of the uncertainty that they hold. Either these products
or business units can become a revenue generator for the company by taking
the position of a star or can become a source of loss for the company.
The industry has high potential to grow hence giving the room to the products
to grow as well, if the pertinent issues are managed effectively.
Stars: Amul ice-cream and Amul ghee.
Cash cows: Amul Milk, Amul Butter, Amul Cheese.
Question marks: Amul Lassi.
Dogs: Amul cookies and Amul pizza.
Justification
Stars: Amul Ice cream and Amul Ghee are two products that can be considered
as Stars of the company. These are the products which have a high market
share and holds a good potential to grow in the future as well.
Companies often invest a lot of cash that comes in from the ‘Cash Cow’
category into the ‘Star’ products’ promotions, and development. Amul Ice
Creams have very targeted advertisements, and are constantly being worked
on to become more appealing to the public by the use of words like ‘creamy’,
‘medium-fat’, etc.
 The health-conscious consumers have been targeted by the ice cream
providing them with the option of ice creams that do not contain sugar. The ice
cream with probiotics is another indication of the way the sweet milk-based
dessert has helped the company to achieve a high market share (Kumar and
Meenakshi, 2010). The brand of Amul ghee has also been a star for the
company as the brand has been able to obtain a 30% increase in its sales, while
the market share held by the product is around 18%, along with an annual
turnover of more than 1,700 crore (Singh, 2016).
Cash cow: There are three products of Amul that fall under cash cow category,
the first being Amul Milk and the second being Amul Butter and third is Amul
Cheese.
The products hold high market share in these not so fast-growing industries.
Owing to the limited chances of industry growth, Amul is introducing a number
of new product variations for different customer segments so as to maintain its
market leadership.
 These three products generate a steady, high revenue to fuel the other
products of the brand. They hold high shares in markets that have relatively
low growth. That is saying something, considering the amount of brands and
popups in the dairy industry due to the changing trends.
For Example: Apart from its basic version of Butter and Milk, Amul also
launched, Amul Butter Lite, Amul Tazza Milk and Amul Gold Milk to target
customers who are more health conscious.

Question marks: Amul lassi has been marketed with the aim to increase the
market share and compete with the other beverages available to the market.
Considering the increasing interest and demand for healthy products and
beverages, the healthy milk from Amul poses a great potential to grow in the
near future with a condition that it is marketed well.
 Often companies employ funds for researching into the scope of the ‘Question
Mark’ products. These products are in high growth markets with a low market
share. They essentially can also become the rising ‘Star’ products with the
correct attention, and investments.
Amul Lassi falls under this category as it already is in a highly populated
market. However, it is steadily making a name for itself against its close
competitors like Aarey and Govardhan. The advertisements for Amul Lassi are
also targeted to make it a faster growing product.
the packaged milk (Lassi) that is depicted as the UHT treated and processed
milk has experienced some increase in sales of up to 53 percent, but there
continues to be the need for further growth of these products to be classified
as stars. The increasing population and demand for healthy milk poses a
growth opportunity for the business in the long run.
Dogs: Dogs are those products that have low growth or market share and have
a very limited chance of growing into a profitable business unit for the
company.
 Amul has few products which have not been able to generate the expected
sales and revenues. One of the notable examples in this regard is Amul
chocolate, which has experienced a demand of 3500 tons of chocolate in 2016
(Franchise India Bureau, 2016). This situation indicates some development in
the business position of the chocolate brand, but the competitors make it
difficult to increase the market share to a significant degree that could make
this product become a source of sustainable revenues.
Another product that is underperforming for the company is Amul pizza, which
has achieved a sale of 5,000 pieces per day. The company has invested in
expanding the business unit with the aim to increase the daily sales. However,
if the sales figures do not increase, a probable course of action would be
divestment of the pizza brand.
Amul Cookies, and Amul Pizza are few products which can be considered as
Dogs for Amul.
Due to the heavy competition and limited innovation that these product
categories face, it’s becoming difficult for Amul to gain market share for these
products and make them a viable revenue generator.
 Matching Structure with Strategy
The Functional Structure

 Amul dairy has five main departments like production, personnel,

marketing, financial, sales and purchase department.  So therefore it is a
functional structure.
 The functional structure groups tasks and activities such as
production and operations, marketing, finance and accounting,
research and development, management information systems. 
 It can often lead to short term and thinking that is best for the firm. 
 They work best within large companies, especially those that
produce products or services on a continuous basis, such as in
manufacturing. 

Amul Main Departments:

I.PRODUCTION DEPARTMENT:

 The production management involves aspects like product planning

the product line, the co-ordination and controlling production process
etc. Plant to the final preparation of products to be distributed by the
marketing department.
 There is given much important to the successful company. Successful
company means does not in the Large Scale or in high capital
investment but the industry which is running successfully with the
help of the staff.

II.PERSONNEL DEPARTMENT:
 Each and every successful company or the failure company or the
failure company does not depends on any materials and machines
but they are depends on the skill of the personnel employed in
organization. AMUL INDUSTRIES PVT. LTD. give important to the
personnel department. They also give importance to the human
resources. 

III.MARKETING DEPARTMENT: In each and every business there is

one of the main department is Marketing Department. It is important for
each and every successful or unsuccessful business.
 Because without Marketing Department any business cannot run
properly, and cannot achieve their desire goal and objective. If they
want to achieve the objective.
 They have to keep the good Marketing Department. If marketing
department is good then the company‘s product will be go ahead and
if the marketing department is bad. Then the product not go ahead,
and there may be possibility that it may go under to the loss. 

IV. FINANCE DEPARTMENT:

 Finance is rooting of all Industrial a Trading activity. The business
cannot survive or expand in this competitive market without finance.
Here are the importance of finance management that is promoting the
business, decision making, measuring the performance, helpful for
shareholders & investors. 

V. SALES AND PURCHSE DEPARTMENT:

 Sales department is a department made within the organization which
is concerned with sales of products. Selling is necessary, as it is
directly related with profit.
 Similarly, the company has a purchases department too, which takes
care of purchases of raw materials from outside. Raw material is
required to make finished products by use of some processes.

The Advantages of Functional Structure:

 Specialization - Departments focus on one area of work. 
 Productivity - specialism means that staff are skilled in the tasks they do. 
 Accountability - there are clear lines of management. 
 Clarity - employees understand their own and others' roles. 
 It allows for rapid decision making. 

The Disadvantages of Functional Structure:

 Aligning priorities across the business. 

 The flow of information and communication.. 
 Co-Ordination of decision-making.
 Embedding and managing change across departments. 

Production and Operations Concerns when implementing

strategies
 The Amul is started with 250 litres of milk per day. But during the
current period amul collect average 9 lakhs of litres of milk per day.
At the winter season they have to sell excess milk at the low price or
amul has to face the loss.
 To solve the problem, amul took the decision to set up a plant to
process the surplus milk, butter and milk powder. The Amul has three
plants known as Amul 1, 2 and 3. All three plants woke 24 hours a
day.
 The production is done in the special machines. These machines and
technology are import-ID from the TRFTA Peak Company.

 The three plant of milk perform different functions:

 Amul 1- presently it is use as a go down for storing raw

materials. 
 Amul 2- the production process of Ghee and packaging are
running.
 Amul 3- this unit is producing amul butter, amul spray powder,
and flavored milk.

 The Strategy implementation process takes place at the production

site. Production related decisions on Plant size, plant location,
product design, choice of equipment, kind of tooling, size of
inventory, inventory control, quality control, cost control, use of
standards, job specification, employee training, equipment and
resource utilization, shipping and technological innovation can
have dynamic impact on the success or failure. 

Employee Stock Ownership Plans

 An Employee Stock Ownership Plan (ESOP) is a type of

retirement plan, similar to a plant that invests primarily in company
stock and holds its assets in a trust for employees.
  An ESOP may own 100% of a company’s stock, or it may own only
a small percentage. ESOP participants (employees) accrue shares
in the plan over time, and are paid out by having their shares
bought back, typically after they leave the company.

 While Amul corporate tax has been slashed to 22% from 30%, the
farmer-led dairy cooperatives continue to be taxed at the earlier
30% rate.

 Banks lend money to ESOPS at interest rates below. This money

can be repaid in pretax, lowering the debt service as much as
10%.

 The Dairy industry in India is growing at a fair clip and India was
the leading milk producing country in the world last year. 

 The Human resource manager in firms conduct research to

determine the desirability of employee stock ownership plan and
then facilitate, its establishment.

Importance of a Diverse Workforce

 Companies are striving to lower the costs of employee’s health

care insurance. 
 Companies with a diverse workforce make better decisions faster,
which gives them a serious advantage over their competitors.
 As a result, companies with diversity in the workplace achieve
better business results and reap more profit.
 When employees feel accepted and valued, they are also happier
in their workplace and stay longer with a company.
 Companies with greater diversity in the workplace have lower
turnover rates.

Benefits of Diverse Workforce 

 Employee’s in a company with higher workplace diversity will have

access to a variety of different perspectives, which is highly
 beneficial when it comes to planning and executing a business
strategy.
 Employee’s are exposed to tell their multiple perspectives and
worldviews. So their perspectives combine, they would often come
with new innovation for the new products.
 Wellness programs provide counseling to employees and seek
lifestyle changes.