Amul BCG Matrix Analysis

Amul brand is a renowned name in the dairy industry in India, supplying milk, butter and other
dairy related products to the Indian population. The application of BCG Matrix on the brand can
provide information about the products that are a source of revenue for the organization.
Moreover it can also help in pointing out the products that hold no prominent growth chances in
the future due to industry trends and market share. The BCG matrix for Amul is given below:

Cash Cows

When the market share of a product is high and it is being sold in an industry that had developed
to such an extent that no significant growth is expected in future, then the product can be
deemed as a Cash cow. Organizations use the cash cows to bring in revenues, while taking the
benefit of the low investment needed to sustain the profitability of those products. The market
share of these products is not likely to experience massive gains either, but the current position
makes them a high revenue generator. There are two main products of Amul which can be
placed in the category of cash cow, fresh milk and butter. The reason behind the selection of
these products is that the industry for fresh milk and butter is not growing at a fast pace but gives
the company with adequate chances of maintaining high profitability if the market share is high
(Shashidhar, 2016). The brand offers three distinctive milk forms including cow milk, Amul gold
and Amul Taaza. The business unit of butter aims to cater to the needs of people seeking
healthier eating options by producing Amul lite. In addition, Amul butter and margarine targets
the Indian consumers effectively (Shashidhar, 2016).

Stars
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. As far as star is concerned, ice creams manufactured by
the company and ghee are the two key products which have the potential to grow taking benefit
from the growth opportunities presented by the industry. 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).

Question Marks
The products that have some likelihood of overcoming the challenges and grow the market share
in future have been termed as question marks in the BCG matrix. One of the reasons why this
category is labelled as question mark is that these products can either become a success in the
form of taking the position of a star, or become a source of continued loss for the company. The
industry has growth potential, thus making it possible for the products to have room for growth if
the pertinent issues are effectively managed. However, ineffective management of these issues
can make it difficult to expand the market share of the product. There are some products being
managed by Amul that can be identified as a question mark as their potential as a source of
profitability remains uncertain. Amul lassi has been marketed with the aim to increase the market
share and compete with the other beverages available to the market. There has been some
success as observed from the increase in sales; however the company needs to make further
investment to strengthen the product. Likewise, the packaged milk that is depicted as the UHT
treated and processed milk has experienced some increase in sales of up to 53 percent (Rupera,
2013), 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 market share and at the same time have limited likelihood
of growing into a profitable business unit for an organization. The low chances of success
suggests that the management needs to be careful with the decision of investing resources in
such a product since it offers no significant benefit to the organization. These products can be
regarded as cash traps due to the low chances of becoming a significant source of profitability for
the company. Investment in these businesses is not likely to yield much profit; therefore they are
not seen as a useful source of earning. 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. The modified
strategy of managing the chocolate brand is expected to bring an increase in the market share of
the product in the coming years, which suggests that the chocolate brand can become a star if
profitability targets are achieved. Another product that is underperforming for the company is
Amul pizza, which has achieved sales 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.

References
Franchise India Bureau, 2016. Amul to augment its chocolate business by increasing its
production capacity. Franchise India, [online] July 28. Available at:
<http://news.franchiseindia.com/restaurant/Amul-to-augment-its-chocolate-business-by-
increasing-its-production-capacity.n13429> [Accessed 16 September 2016].
Kumar, A. and Meenakshi, N., 2010. Marketing Management. India: Vikas Publishing House.
Rupera, P., 2013. Amul sees 53% growth in Ultra-High Temperature milk in Tetra Pak. Times of
India, [online] September 10. Available at: <http://timesofindia.indiatimes.com/business/india-
business/Amul-sees-53-growth-in-Ultra-High-Temperature-milk-in-Tetra-
Pak/articleshow/22460569.cms> [Accessed 15 September 2016].
Shashidhar, A. 2016. The Rs 80,000 crore milk business. Business today, [online] June 5.
Available at: <http://www.businesstoday.in/magazine/cover-story/indian-dairy-market-is-on-a-
tear-due-to-new-players/story/232545.html> [Accessed 15 September 2016]
Singh, N. 2016. FMCGs taste ghee success as Patanjali spreads awareness. Times of India,
[online] April 19. Available at: <http://timesofindia.indiatimes.com/business/india-
business/FMCGs-taste-ghee-success-as-Patanjali-spreads-
awareness/articleshow/51886560.cms> [Accessed 15 September 2016]