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Gujarat Co-operative Milk Marketing Federation Limited M5CST01: Business

Strategy

Presentation · January 2010

DOI: 10.13140/RG.2.2.12820.73607

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Gujarat Co-operative Milk Marketing
Federation Limited

M5CST01: Business Strategy

Submitted To:

Mr. M. A. Sanjeev/Mr. Gopi Mennon

Submitted By:
Shivani Pandey 09609007
Pankaj kumar Singh 09609036
Karan Verma 09609086
Ankush Bhatnagar 09609185
Amal Abraham 09609186

2010-2011
1.0 Introduction

1.1 Background of the Industry

The dairy industry plays an important role in the socio-economic development of India. The
dairy industry in India is instrumental in providing cheap nutritional food to the vast
population of India and also generates huge employment opportunities for people in rural
places.

The Department of Animal Husbandry, Dairying, and Fisheries, which falls under the central
Ministry of Agriculture, is responsible for all the matters relating to dairy development in the
country. This department provides advice to the state governments and Union Territories in
formulating programs and policies for dairy development

To keep focus on the dairy industry a premier institution known as the National Dairy
Development Board was established. This institution is a statutory body that was established
in 1987. The main aim to set up the board was to accelerate the pace of dairy development in
the country and attract new investments.

India is a wonderland for investors looking for investment opportunities in the dairy industry.
The dairy industry holds great potential for investment in India and promises high returns to
the investors.

The reasons why the industry has huge potential for attracting new foreign investment are:

1. There is a basic raw material need for the dairy industry; that is, milk is available in
abundance.
2. India has a plentiful supply of technically skilled laborers.
3. There is an easy availability of technological infrastructure.
4. India has all the key elements required for a free market system.

2
1.2 Company History

AMUL was set up in 1946 and its full form is Anand Milk-producers Union Ltd. The Brand
Amul is a movement in dairy cooperative in India. The management of the brand name is
done by the Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) which is a
cooperative organization based in Gujarat.

1.3 Analysis of Vision and Mission

VISION: ‘liberate our farmers from economic oppression and leave them to
prosperity’.

MISSION: ‘Dairy cooperatives of Gujarat turnover to be Rs. 27,000 crores by

2020’.

Objective: To ensure that the maximum share of the consumer‟s rupee goes back to the
milk producers.

After analyzing the vision and mission of the company it is pretty sure that the company
would strive to expand its distribution network, would involve its manpower in creative
marketing, plan for consumer education and product innovation, would leverage effectively
on rising levels, grow affluence among Indian consumers and would tap the rising demand
for new value added products.

3
1.4 About AMUL

1.4.1 Location

Amul is located in the Anand district which is in the state of Gujarat and it has set up itself as
a model for development in the rural areas. For Amul brand has started the White Revolution
of India which has helped to make the country the biggest manufacturer of milk and it‟s by
products in the whole world. Amul has around 2.6 million producer members and the total
capacity for handling milk is around 10.16 million liters every day. The brand's capacity for
milk drying is around 594 Mts. each day and its capacity for cattle feed manufacturing is
about 2640 Mts. each day.

1.4.2 Product Portfolio

Amul is the biggest brand in the pouched milk sector in the world and in India it is the
biggest food brand. Amul's range of products includes milk, ghee, milk powders, curd, ice
cream, paneer, cream, chocolate, cheese, butter, and shrikhand.

1.4.3 Brand Umbrella

[

The various brands of Amul's bread spreads are Amul Lite, Amul Butter, and Delicious Table
Margarine.

 The Brand Amul's milk drinks are sold under various names such as Amul Kool, Amul
Kool Cafe, Kool Koko, Amul Kool Chocolate Milk, and Amul Masti Spiced
Buttermilk.
 Amul's powder milk is sold under many names like Amulya Dairy Whitener, Sugar
Tea Coffee Whitener, Sugar Skimmed Milk Powder, and Amul Instant Full Cream
Milk Powder.
 The brand's cheeses are also sold under various names such as Gouda Cheese, Amul
Cheese Spreads, and Amul Emmental Cheese.
 Amul Brand's desserts are sold under many names like Amul Basundi, Amul Lassee,
Gulab Jamun Mix, Amul Shrikhand, and Amul Ice Creams.

4
1.4.4 Business Markets

Amul exports its products to various countries such as USA, Australia, Mauritius, China,
Hong Kong, Singapore, UAE, and Bangladesh.

Amul has often had a special connection with the film industry. A collation of some of the
brilliant Amul adverts over the years is as follows:-

5
2.0 Environmental Analysis

2.1 STEEP Analysis

This STEEP analysis provides concentrated information about Social, Technological,
Economical, Ecological and Political aspects that effect Amul directly or indirectly.

2.1.1 Social

Amul has effected social change at the village level i.e. people stand in line to deliver their
milk without trying to take short cuts. They do not complain if they have to stand behind an
untouchable in the line. Hence, the cooperative has thus given a deathblow to the caste
system in its own way. Also Amul provided women an opportunity to have a voice in the
“home economy” as they are the major participants in the program.

2.1.2 Technological

GCMMF's technology strategy is characterized by four distinct components:

New products,
Process technology,
Complementary assets to enhance milk production,
E-commerce

GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ
Internet technologies to implement B2C commerce. Customers can order a variety of
products through the Internet and be assured of timely delivery with cash payment upon
receipt. Another e-initiative underway is to provide farmers access to information relating to
markets, technology and best practices in the dairy industry through net enabled kiosks in the
villages. GCMMF has also implemented a Geographical Information System (GIS) at both
ends of the supply chain, i.e. milk collection as well as the marketing process.

2.1.3 Economical

GCMMF proved that efficiency of co-operatives can successfully counter the

recessionary trends of the economy thereby ensuring consistent livelihood to the farmer

6
 producer and offering value for money products to its consumers. For the third
consecutive year, it has posted a double digit growth turnover reaching Rs. 6700 crores.
Pandemic economic turmoil has taken its toll, as international prices of all major dairy
products have declined drastically in recent months. However, with its sharp focus on
domestic Indian market, Amul has successfully insulated Indian farmers from all the
turbulence in global dairy trade.
It is already providing the best employment option for displaced workers from urban
manufacturing sector, who after losing their jobs due to recession, have started reverse
migration from cities back to villages

2.1.4 Ecological

GCMMF could foresee the impact of below normal monsoon in August 2009 itself
and started planning to maintain milk production, procurement and inventory levels.
Also, at a time when due to lower production of cereals, fodder prices had jumped
almost two-fold, GCMMF enhanced the supplies of cattle-feed to milk producers and
maintained its prices below cost and were able to provide better returns to the milk
producers to overcome the stress of draught

2.1.5 Political

Tussle for the chairmanship of Gujarat Cooperative Milk Marketing Federation

Limited (GCMMF), the apex marketing body, emerged as the core issue among
political parties. These parties planned gain entry into the cooperative giant‟s affairs.
Mr. Bhatol, who was enjoying his second three-year term, was a consensus candidate
last year, even as the main political parties failed to choose a new head. Now, barely a
year after his taking over for the second term, Mr. Bhatol is under pressure to
relinquish the office.

7
2.2 Issue Priority Matrix

Fig 1: Issue Priority Matrix for Amul

8
2.3 Porter’s Five Forces Model

Fig 2: Porter’s Five Forces Model

1. Bargaining Power of Suppliers

GCMMF is a cooperative, which means it conducts business by collecting from large
number of individual farmers who rely upon the cooperative to give them better price
for their produce. Therefore the bargaining power of such suppliers is low. Twenty
nine lakhs milk producers gain higher profits only through the co-operative which in
turn drives down their bargaining power.

9
2. Bargaining Power of Buyers
There are already other co-operatives existing in India, having their own established
brands, which reduce the loyalty of current customers, thereby increasing their
bargaining power.

3. Rivalry Among Competitors

The market is highly competitive, existence of several players which have already
established channels and partners constantly push the envelope. The competition
exists locally, nationally and internationally.

4. Threat From Substitute

Although no real substitute exist for milk, however competition offers low priced
products as well as variety, from skimmed milk to full cream as well as milk powder.

5. Barriers To Entry
The competition among existing players is very intense and grown over the years
from collection of more and more producers. The producers only supply to such
established brands due to their reach and ability to maximize profits. Also the industry
is capital intensive along with several legal barriers. Although an innovative and cost
effective collection and processing system might change the situation.

10
 2.4 Industry Matrix

Key Success Factors Weight Amul Amul Mother Mother Nestle Nestle
Rating Weighted Dairy Dairy Rating Weighted
Score Rating Weighted Score
Score

1. Strong supply 0.05 4.0 0.20 5.0 0.25 5.0 0.25

chain
partnerships
2. Efficient control 0.05 4.0 0.20 5.0 0.25 5.0 0.25

and coordination
of the network
3. High returns for
0.05 3.5 0.175 4.0 0.20 3.5 0.17
the suppliers
4. Use of technology
0.03 2.5 0.075 3.0 0.90 5.0 0.15
to solve problems
5. Infrastructure 0.04 3.0 0.12 4.0 0.16 4.0 0.16
6. Marketing 0.20 5.0 1 4.0 0.80 5.0 1
7. Product quality 0.25 5.0 1.25 2.5 0.625 5.0 1.25
8. Wide product 0.18 5.0 0.90 3.5 0.63 4.0 0.72

portfolio
9. Investment and 0.05 4.0 0.20 4.0 0.20 3.5 0.17

resources
10. Product 0.10 4.0 0.40 3.0 0.30 4.0 0.40
availability

Total 1.00 4.50 4.31 4.52

11
The key success factors of Amul in the industry affect industry rival‟s ability to expand in the
competition, raw material availability, packaging, cost, marketing, product design, reputation
& credibility, quality and others. These factors are very critical and all players like have to
control over them. They change from time to time and affect the finances and the
competition.

The current industry matrix puts Nestle at the top among others. Although the matrix is not
exhaustive and does not include all market leading companies, it still shows where the gaps
are and the critical success factors. Nestle takes the lead because of high quality products and
aggressive marketing, also the standards and technology used by Nestle is superior than Amul
or Mother Dairy, which are domestic brands. Products availability is important factor, since
even one miss pushes the customer to seek a different competitor. Amul however is not far
behind and can catch up in areas of technology and marketing.

2.4 Key Success Factors

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The key success factors of the Amul industry are those things that affect industry members
ability to prosper in the market place-accessibility to raw materials, packaging cost focus,
Advertisement, product design, reputation & credibility, quality control, strategic alliances,
are ultimately so important that all firms in the industry must pay close attention to them.
These key factors of success are critical in the dairy industry in particular, as they are the
factors that shape whether a company will be financially and competitively successful. These
critical factors may vary from time to time within the industry as driving forces and
competitive conditions change.

After calculating the weighted score for all three companies, it seems that Nestle has got the
highest weighted score compared to the other two companies. This is because Nestle is able
to achieve a high score in product availability success factor and Advertisement success
factor. Nestle plays a lead role in advertisement. Their marketing strategy is to reach each and
every one through advertisements. They spend a lot in terms of Advertisements. While
goodwill plays an important role for Amul, as it‟s been in the market from past three
generations, so the advertisement is the least role for their strategy. Still Amul does come up
with taglines of movies and current affairs.

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 3.0 Factor Analysis

3.1 Internal Factor Analysis Summary (IFAS)

Internal factors Weight Rating Weighted Comments

Score
Strengths
1. Wide diversity of 0.15 5.0 0.75 Expansion
available products opportunities
2. Economies of scale 0.15 5.0 0.75 low overall costs
3. Largest co-operative 0.10 4.5 0.45 market leader
for milk products
4. Strong supply chain 0.05 4.0 0.20 Strong network
5. Leading national 0.05 3.5 0.17 wide consumer
player support

Weaknesses

1. Lack of scalability 0.10 3.0 0.30 Saturation

2. Low control over milk 0.05 2.5 0.12 Bovine Population
yield Road Infrastructure
3. Transportation delay 0.15 3.5 0.52 Old technology
4. Inferior technology 0.10 3.5 0.35 No newer
5. Low investment 0.10 2.5 0.25 investments
Total 1.00 3.86

In the last few years, the cooperative has successfully launched several new product lines,
which have been popular among different age groups. In order to leverage from their
distribution network, to optimize market supervision expenditures, to achieve increasing
efficiency while keeping the distribution infrastructure lean, focused and productive, the
amalgamation of its different distribution networks was done. Control over supply chain with
industry best practices makes Amul the market leader in dairy products in India. Amul has

14
created social cohesion, employment opportunities, societal infrastructure, milch animal
rearing practices, hygiene and sanitation awareness through safe milk concepts etc.

Milk products create an inherent weakness, which is perishability. The product can lose
quality in a small time scope, therefore several other strengths relating to storage, movement
and related logistics have to be improved. Another weakness is that some of the products are
very unpopular and cannot compete with other players; this weakness is in terms of frozen
products, which are considered low in quality. The marketing for these products is missing
and does not appropriately position it. Technology and transportation remain basic
weaknesses which mar the efficiency of the entire supply chain.

3.2 External Factor Analysis Summary (EFAS)

15
As a Global enterprise, Amul will be meeting global demands and ensure greater productivity
and the opportunity to enhance integration in order to increase efficiency and effectiveness in
the business. It already has wide geographic positions and hence this will give it an advantage
to get access to gain presence in mature markets. Efforts to exploit export potential are
already on, as Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. By
following the new GATT treaty, opportunities have increased tremendously for the export of
agri-products in general and dairy products in particular.
Local competitors are the major problem facing by Amul. They sell their products at a lower
price, since being a low capital company; they have fewer expenses to take care of. Secondly
as the environmental costs are rising day by day, it‟s getting tough to carry the same pricing
throughout. Thus cutting down the extra cost will surely help. Adulteration is also a major
threat to quality that takes place due to illiterate farmers from remote villages.

3.3 Strategic Factor Analysis Summary (SFAS)

There are certain strategic factors, which are with a long-term mission, and some need to be
addressed in the short term. There are other factors, which do not fall into either of the terms
mentioned above; they are classified as intermediate term.

16
3.3.1 Short Term
The strategic factors that the company needs to satisfy in the short run are Economies of scale
as it can change by building few more storage capacity at their new projects. This will also
benefit in global expansion of the company. As short term defines a period of a year or so, the
solution should be found within a year for a proper success.

3.3.2 Intermediate Term

The strategic factors that the company needs to consider during this term are lower yield
management, supply chain demand and rising environmental costs. These are classified into
intermediate duration because the company must be able to overcome its weaknesses,
make use of the opportunities and defeat the threats. All this must be done at the right time to
ensure efficient results. In this case the factors are such that the earliest (short term) might not
be the best decision to make, as the duration might not be sufficient to overcome all the issues
with a clear outlay.

3.3.3 Long Term

The strategic factors that the company needs to satisfy during this period are the strength of
having a wide range of products. They must be able to continue to maintain many products
varieties and build on them efficiently. Using R & D (Research and Development) to
overcome the problem of pasteurization as well as satisfying growing global demand is not an
easy task and hence requires time and efficiency to meet the needs globally. Last but not least
is overcoming the threat of competitors in the long run.

17
4.0 SWOT Analysis
4.1 Strengths

 Demand profile: Absolutely optimistic. Milk being a necessity product, the

demand will stay and the sales at GCMMF are bound to increase over a period of
time.
 Margins: Quite reasonable, even on packed liquid milk. The margins are enough
to limit the entry of potential entrants.
 Flexibility of product mix: Tremendous. With balancing equipment, GCMMF
has kept adding a wide array of products to its product line.
 Availability of raw material: Abundant. Presently, more than 80 per cent of
milk produced is flowing into the unorganized sector, which requires proper
channelization. Amul & GCMMF have leveraged this and has got itself a strong base
of suppliers who provide them milk throughout the year. Large number of dairy plants
in public and cooperative sectors besides several others coming up in the private
sector would result in competition. Because of this the end consumer would benefit
and a good product mix would emerge.
 Technical manpower: Professionally trained, technical human resource pool,
built over last 30 years is the strength that GCMMF has. The employees of GCCMF
are highly recognized in the industry and have earned name for themselves as well as
the federation.
 Enhanced milk production: Increase in the milk production with consequently
increased availability of milk processing has led to increase in consumption and faster
access to the consumers through effective distribution. The technology is brought
from Denmark and the production of milk has benefited from that.
 Transportation: The transportation facilities and the easy availability of the
special trucks have provided a boost. Cold refrigerated trucks are there in place and
the warehouses also have the cold storage facilities that facilitate the transportation.
 Vast resources: Country has vast natural resources which offer immense
potential growth and development for dairying. Moreover the financial resources
available with the federation are immense and the reputation is such that in case of
any further requirements, it can approach any institution and raise any form of capital.

18
  Increasing purchase power and changing tastes of the consumers: The
purchasing power of the residents is increasing. As a result a lot of products are being
consumed. Moreover, the consuming habits are changing. As a result, the demand for
products such as butter and cheese is increasing at a very rapid rate.

4.2 Weaknesses

 Perishability: Pasteurization has overcome this weakness partially. UHT gives

milk long life. Still perishability is there at the milk vendor‟s end. This does result in
loss of some production. But Amul Dairy is taking steps to store milk at the vendors
end. Surely, many new processes will follow to improve milk quality and extend its
shelf life.

 Lack of control over yield: Theoretically, there is little control over milk yield.
A lot depends upon the monsoon in the country. This is because of the quality of
cattle feed that would be available will not have the required nutritional content. Steps
are taken to provide awareness regarding these and the penetration of quality feed is
being increased. Moreover, increased awareness of developments like embryo
transplant, artificial insemination and properly managed animal husbandry practices,
coupled with higher income to rural milk producers should automatically lead to
improvement in milk yields.
 Logistics of procurement: Woes of bad roads and inadequate transportation
facility make milk procurement problematic. All these factors lead to perishability of
the procured milk. But with the overall economic improvement in India, these
problems would also get solved.
 Erratic power supply: The erratic power supply would cause harm in the
processing of milk.
 Underdeveloped systems: There still exist underdeveloped raw milk collection
systems in some parts of the country. However steps are being taken such as setting
up of cold storage points at key collection centers to combat the situation.
 Lack of proper implementation: Dairy development programmes have not
been fully implemented as per the needs of the region in different agro-climatic zones.

19
  Infrastructure: The infrastructure that is available is not up to the current world
standards. Also lack of infrastructure for offering dairy business management
programmes to the trained personnel is creating a hindrance.

4.3 Opportunities
"Failure is never final, and success never ending”. Dr Kurien bears out this statement
perfectly. He entered the industry when there were only threats. He met failure head-
on, and now he clearly is an example of „never ending success‟. If dairy entrepreneurs
are looking for opportunities in India, the following areas must be tapped:

 Competition: With so many newcomers entering this industry, competition is

becoming tougher day by day. But then competition has to be faced as a ground
reality. The market is large enough for many to carve out their niche. Moreover due to
competition, there is a chance to better serve the market with innovative products.

 Value addition: There is a phenomenal scope for innovations in product

development, packaging and presentation. Given below are potential areas of value
addition:
o Steps should be taken to introduce value-added products like shrikhand, ice
creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a
greater presence and flexibility in the market place along with opportunities in
the field of brand building.
o Addition of cultured products like yoghurt and cheese lend further strength -
both in terms of utilization of resources and presence in the market place.
o Yet another aspect can be the addition of infant foods, geriatric foods and
nutritional.
 Export potential: Efforts to exploit export potential are already on. Amul is
exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new
GATT treaty, opportunities will increase tremendously for the export of agri-products
in general and dairy products in particular. There is a strong basis of cost efficiency,
which GCMMF can leverage in the world market.
 Markets: The market for the traditional as wells as processed dairy products is
expanding both at the domestic and international front.

20
  IT support: Software is now available for project formulation for dairy
enterprise. It has also computerized its production processes. Mother Dairy was the
first fully computerized dairy in India. In its Anand plant all products are processed
computerized, which does not have any hand touch during any stage of process.

4.4 Threats
 Milk vendors, the un-organized sector: Today milk vendors are occupying
the pride of place in the industry. Organized dissemination of information about the
harm that they are doing to producers and consumers should see a steady decline in
their importance.
 Infestation: There are increasing incidents of chemical contaminants as well as
residual antibiotics in milk.
 Quality: The quality of the milk is found to be poor as compared to the
international standards. One of the reasons for these according to the EU and America
is the method of milching the milk. In these nations the milk is hands by the farmers
owning the cattle do milched with the help of machines, while in India.
 Exploitation: The liberalization of the Dairy Industry is likely to be exploited by
the multinationals. They will be interested manufacturing the milk products, which
yield high profits. It will create milk shortage in the country adversely affecting the
consumers.
 Subsidy by Western Nations: There have been incidences wherein the
Western nations subsidizing the dairy products by a few means like transportation.
Because of such reasons the final price of the product goes below the prices prevailing
in the Indian Market. Hence it proves a threat to GCMMF‟s and other Indian dairy
products.
 Creation of Non Tariff Barriers by Developed Nations: The Developed
Nations have created Non Tariff Barriers related to Quality of the milk specifically.
They want that the milk be processed with potable Air and Water. They also want that
the milching of cattle be done with the help of machines. However this type if system
is yet to evolve in India. Because of these reasons they are reducing the market
potential of Indian made products, where GCMMF holds a lion‟s share.

21
The study of this SWOT analysis shows that the „strengths‟ and „opportunities‟ far
outweigh „weaknesses‟ and „threats‟. Strengths and opportunities are fundamental and
weaknesses and threats are transitory. Any investment idea can do well only when
you have three essential ingredients: Entrepreneurship (the ability to take risks),
Innovative approach (in product lines and marketing) and Values (of quality/ethics).

22
5.0 TOWS Analysis

5.1 SO Strategies (Maxi-Maxi)

Amul can use the strategies that have been formed after in-depth strategic analysis of the
company and its industry. Some suggestions in this case would be to increase productivity by
using cost effective manufacturing techniques. Also, increase demand for their products
world over by first gaining more exposure to the global market. With the use of expansion
strategy, it can overcome the location issue, as Amul can expand more areas and it will make
the distribution of channel areas easier and convenient.

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5.2 ST Strategies (Maxi-Mini)

Amul must put into action some of these strategic options to meet the threats‟ using its
strengths. Product differentiation is very important to differentiate Amul from the
competitors, as it can tackle down the competitor‟s product if Amul products are more
outstanding and different from its competitors. Options available can be classified as product
elimination and diversification strategy, value marketing strategy and also developing
hygienic processing facilities. These are some of the main areas of focus under this section.

5.3 WO Strategies (Mini-Maxi)

The strategies formulated to overcome the weakness through opportunities are increase of
opportunity through new GATT treaty, develop new process to improve the quality and shelf
life of milk and milk products, this can be achieved through pasteurization, homogenization
and many other processes like producing UHT milk etc. finally to also increase awareness of
scientific developments.

5.4 WT Strategies (Mini-Maxi)

The strategies that have been formed to overcome the weakness and threats in Amul company
and the dairy industry as a whole are to apply efficient and economical procurement of
products. Secondly, to have control over the logistics and to maintain them efficiently. Lastly,
create the right type of product positioning for the various product categories that Amul deals
with.

24
6.0 Corporate and Operational Strategies

6.1 Corporate Strategy

The strategic factor that the company satisfies is the strength of having a wide range of
products. They must be able to continue to maintain many products varieties and build on
them efficiently. Using R & D to overcome the problem of pasteurization as well as
satisfying growing global demand is not an easy task and hence requires time and efficiency
to meet the needs globally. Last but not least is overcoming the threat of competitors in the
long run.
Recent Strategic choice of Amul consist of moving consumers from lose milk to packaged
milk and gradually move them up the value chain, strong supply chain design and improving
the socio-economic condition of the consumer anchors the desire to enhance lifestyle.

Placing a product in that part of the market where it will receive a favorable reception
compared to competing products is the most recent strategy implemented by Amul. In case of
Amul it has a positioning strategy and it is “The taste of India”. This had created value for
everyone in value chain, be it customers or the suppliers/farmers. The USP for Amul is
Quality with affordability, which appeals to most of the targeted markets. Amul positioned
itself with India‟s first pro-biotic wellness ice cream and sugar free delights for diabetics.

25
This was based on good strategies of positioning which helps increase awareness and also
improve brand image. They expanded their products in terms of those that can be used even
by those who are restricted from consumption due to medical reasons. Amul also priced their
products such that it made competitor “Kwality Walls” rethink their marketing/pricing
strategy. This type of product positioning has proved beneficial to Amul and so they must
come up with many more of such ideas and products that can help them move forward.

6.2 Operational Strategy

6.2.1 Marketing Strategies
GCMMF has become very popular because of its excellent marketing strategy. GCMMF
marketing strategy is to understand the consumer needs, develop products that provide
superior value at fewer prices. GCMMF has shown a tremendous commitment to the
floodwater situations. GCMMF has never stopped the supply of milk and other milk
products. And unlike other competitors, it has never taken wrong benefits in these kinds of
situations. It has developed an excellent distribution channel to provide its products to the
consumers. It has made its products available in each part of Gujarat & India.

GCMMF has an excellent distribution. It is its distribution channel, which has made it so
popular. GCMMF‟s products like milk and milk products are perishable. It becomes that
much important for them to have a good distribution.

Products

Agent

Wholesaler
r

Retailer

Consumer

Fig 3: Distribution Chart

26
The products change hands for three times before it reaches to the final consumer. First of all
the products are stored at the Agents end who are mere facilitators in the network. Then the
products are sold to wholesale dealers who then sell to retailers and then the product finally
reaches the consumers.

6.2.2 Finance Strategies

Financial management is that managerial activity which is concerned with the planning and
controlling of the firm‟s financial resources. Finance is nothing to other but the money.
Money is necessary input for economic activities. In the other wards “Finance is the common
denominator for carrying out vast range of corporate objectives.” This is a co-operative unit,
so the finance is raised from members by a way of share capital. In this share capital is
limited. This unit has invested so many rupees in the structure of organization. Amul has a
long-term finance project.

6.2.2.1 Financial Details

Name of Bankers

1. The Kaira District Central Co-operative Bank Ltd.

2. State Bank of India
3. State Bank of Saurashtra
4. UTI Bank Ltd
5. Corporate Bank

6.2.3 Human Resource Strategy

The success to any industrial unit depends upon their effective personnel department.
Personnel department is basically commercial with human resource of an enterprise and it
also continues procurement, development, non-monetary comparison, integration and
maintenance of the personnel purpose of contribution towards the accomplishment of the
organization‟s major goal and objectives. Amul‟s recruitment and selection process is very
systematic and comprehensive. All division head in inform about their manpower
requirements. According to the requirement of the personnel division they get require
employees by resources like postal services employment exchange education institution and
advertisement. Amul Dairy receives lots of applications in response to their advertisement.
These forms contain general information about the candidates. Then forms are to be checked

27
by authorized person and after scrutinizing eliminate the unqualified applications. Short listed
Applicants are called for personal interview. Interview committee conducts this interview.
When applicants are too many, then they conduct a written test. Those who pass this test are
called for interview and are selected on the basis of smart selection process.

6.2.3.1 Sources of Recruitment

 By giving advertisement in news papers

 Labour Union
 Voluntary Organization
 Leasing Contract
 Private Employment Agency
 Government Employment Exchange
 School, Colleges, Universities and Professional Institutes
 Recommendation of present Employee
 Recruitment as Temporary Workers

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7.0 Future Strategies

 Expanding the processing and packaging capacity to meet growing demands. In

a bid to pump up volumes,
 Amul is also extending its distribution network to reach new markets. The core
strategy is to further consolidate the operations in existing markets which
includes Kolkata.
 Also, it is beefing up the marketing and advertising strategy to sustain its
leadership. The company‟s long term strategy also includes foray into South
India.

 To achieve and maintain competitive advantage, innovation in product design

and delivery are increasingly essential.
 To innovate at each stage in value chain – production, procurement, processing,
marketing and branding.
 Launching „Dairy Demonstration Project‟ which is a collective effort of the
Union and Bank. The project envisages encouraging the farmers to use high
yielding animals and modern aids to increase production.

29
8.0 References

1. Bowonder, B.; Prasad, Raghu; Kotla, Anup, International Journal of Services

Technology & Management, 2005, ICT application in a dairy industry: the e-
experience of Amul.
2. Dairy Industries International, Aug2007, Amul becomes top Indian co-operative.

3. Dr. Kurien., “Amul, The Kaira District Cooperative Milk Producers‟ Union Ltd.
Anand, 50 Years of Milk & Health.”
4. Goldberg, Ray A., Knoop, Carin-Isabel, Sunder, Srinivas Ramdas, Harvard Business
School Cases, Nov 1998, Amul and India's National Dairy Development Board.
5. Bellur, Venkatakrishna V.; Singh, Saraswathi P.; Chaganti, Radharao; Chaganti,
Rajeswararao. Long Range Planning, December b1990, The White Revolution -- How
Amul Brought Milk to India.
6. Manikutty, S., Asian Case Research Journal, Dec2002, Gujarat Co-operative Milk
Marketing Federation Ltd. (GCMMF).

7. Wheelen, Thomas L. and Hunger, David J, Concepts in strategic management and

business policy, 12th edition.
8. Scholes and Whittington, Exploring Corporate Strategy, 7th edition.

8.1 Web References

1. www.amul.com/
2. www.business.mapsofindia.com/sectors/manufacturing/amul.html
3. www.gcmmf.coop/
4. www.nddb.org

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9.0 Appendix

9.1 List of Products Marketed

Bread Spreads

 Amul Butter
 Amul Lite Low Fat Breadspread
 Amul Cooking Butter

Cheese Range

 Amul Pasteurized Processed Cheddar Cheese

 Amul Processed Cheese Spread
 Amul Pizza (Mozarella) Cheese
 Amul Shredded Pizza Cheese
 Amul Emmental Cheese
 Amul Gouda Cheese
 Amul Malai Paneer (cottage cheese), Frozen, Refrigerated and Tinned
 Utterly Delicious Pizza

Mithaee Range (Ethnic Sweets)

 Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)

 Amul Amrakhand
 Amul Mithaee Gulabjamuns
 Amul Mithaee Gulabjamun Mix
 Amul Mithaee Kulfi Mix
 Avsar Ladoos

UHT Milk Range

 Amul Shakti 3% fat Milk

 Amul Taaza 1.5% fat Milk
 Amul Gold 4.5% fat Milk
 Amul Lite Slim-n-Trim Milk 0% fat milk
 Amul Shakti Toned Milk
 Amul Fresh Cream

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  Amul Snowcap Softy Mix

Pure Ghee

 Amul Pure Ghee

 Sagar Pure Ghee
 Amul Cow Ghee

Infant Milk Range

 Amul Infant Milk Formula 1 (0-6 months)

 Amul Infant Milk Formula 2 (6 months above)
 Amulspray Infant Milk Food

Milk Powders

 Amul Full Cream Milk Powder

 Amulya Dairy Whitener
 Sagar Skimmed Milk Powder
 Sagar Tea and Coffee Whitener

Sweetened Condensed Milk

 Amul Mithaimate Sweetened Condensed Milk

Fresh Milk

 Amul Taaza Toned Milk 3% fat

 Amul Gold Full Cream Milk 6% fat
 Amul Shakti Standardized Milk 4.5% fat
 Amul Slim & Trim Double Toned Milk 1.5% fat
 Amul Saathi Skimmed Milk 0% fat
 Amul Cow Milk

Curd Products

 Yogi Sweetened Flavored Dahi (Dessert)

 Amul Masti Dahi (fresh curd)
 Amul Butter Milk

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  Amul Lassee

Amul Ice creams

 Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti

Frutti)
 Nut-o-Mania Range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar
Carnival, Badshahi Badam Kulfi, Shista Pista Kulfi)
 Utsav Range (Anjir, Roasted Almond)
 Simply Delicious Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate)
 Nature's Treat (Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry,
Black Currant)
 Sundae Range (Mango, Black Currant, Chocolate, Strawberry)
 Millennium Ice cream (Cheese with Almonds, Dates with Honey)
 Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam Kulfi,
Shahi Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi)
 Cool Candies (Orange, Mango)
 Cassatta
 Tricone Cones (Butterscotch, Chocolate)
 Megabite Almond Cone
 Frostik - 3 layer chocolate Bar
 Fundoo Range - exclusively for kids
 SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango, Pineapple)
 Health Isabcool

Chocolate & Confectionery

 Amul Milk Chocolate

 Amul Fruit & Nut Chocolate

Brown Beverage

 Nutramul Malted Milk Food

Milk Drink

 Amul Kool Flavoured Milk

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 Health Beverage

 Amul Shakti White Milk Food

Ready to Serve Soups

 Masti Tomato Soup

 Masti Hot & Sour Soup

Recently launched

 Amul Ganthiya

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