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1

Project Report
On
Amul Company

Submitted in Partial Fulfillment of the Requirements of


Bachelor of Business Administration
of
Guru Gobind Singh Indraprastha University

Submitted to : Mr. P.K Pandey Submitted by : Rajeshwar Singh Anand


04121401709
Semester - 3

Jagannath International Management School


Vasant Kunj, New Delhi – 110070
2

S.N S pag
o ubject e
1. Certificate 4

2. Preface 5

3. Acknowledgement 6

4. Synopsis 7

5. Introduction 9

6. Theoretical perspective
a. History 9
b. Condition Of Dairy Farmers 9
c. Role Of Sardar Vallabbhai Patel 10
d. Formation of District Co-operative 11
Kaira
e. Formation Of GCMMF 11
f. The First Advertising Strategy 12
g. Digital Advertising 12
h. Business Model 13
i. Developing Demand 16
j. Distribution Network 16
k. Umbrella Brand 16
l. Third Party Service Providers 17
m. Co-ordination 17
n. Best Practices 18

7. Methodology
a. Amul Revolution- impact study 19
b. The Turnaround 19
c. Socio-Economic Impact 20
d. Institution Building 22

8. Analysis
a. Marketing And Advertising Strategy 23
b. Product Scope Strategy 24
c. Different Products Of Amul And its 25
variant
d. Product Elimination 28
e. Current Market Share 29

9. Findings
a. Product Positioning 30
b. Product Repositioning 32
c. Product Overlap 33
3

d. Defense Strategy 34
e. Amul Defending Its Turf 35
f. Segmentation 35
g. Targeting 36
h. Promotion 36
i. Amul Competitors 38

10. S.W.O.T Analysis


a. Strength 41
b. Weakness 41
c. Opportunities 42
d. Threat 42

11. Conclusions 43

12. Bibliography 44

Certificate
4

This project titled “Amul Company” is based on an


original study conducted by Rajeshwar Singh Anand of
BBA III Semester programme and is based on the
results carried out by him under my guidance and
supervision.

Mr. P.K
Pandey
(Project
Guide)

Preface
5

The report is on Amul Company. I have tried to cover each and every topic
which I found is relevant for the general understanding. I haven’t included
any technical term so as to make it easy to understand by the user.

The report gives an overview of what is all about the Amul company, their
overall products and branches that they have already launched and their
future launching of the products. It gives you a brief idea about their
production and collection techniques

Also at the end, recommendations and policies that are as well as can be
implemented are mentioned. The steps they have taken to improve the
quality and quantity of their product in accordance with customer
satisfaction. Necessary charts and graphs are also included.

Acknowledgement
6

ANY ATTEMPT AT ANY LEVEL CANNOT BE SATISFACTORILY


COMPLETED WITHOUT THE SUPPORT AND GUIDANCE OF LEARNED
PEOPLE.I WOULD LIKE TO EXPRESS OUR IMMENSE GRATITUDE TO
Mr. P.K Pandey FOR HER CONSTANT SUPPORT AND MOTIVATION
THAT HAS ENCOURAGED ME TO COME UP WITH THIS PROJECT.

Rajeshwar Singh Anand

Synopsis
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 With the liberalization of the Indian economy in the early 1990s, and the
subsequent entry of new players, there was a change in lifestyles and the food
tastes of people. The new team that took over the management of the GCMMF in
the mid-1990s hoped to take advantage of the change.

 According to some analysts, this diversification was probably not entirely


demand-driven. Being a cooperative, GCMMF was compelled to buy all the milk
that was produced in Gujarat. And with milk production having increased since
the mid 1990s, GCMMF had to make use of additional milk, and hence the
pressure to make and market more and more processed-milk products.

 Amul had to expand the consumption base of milk-based


products in India. It planned to make its products (butter
and cheese) a part of the regular diet in most households. Amul launched its
new products with the intention of increasing the offtake of its basic milk
products, including cheese.

 This flurry of launches helped Amul broaden its appeal across all segments.
Price was an advantage that Amul enjoyed over its competitors. Amul's products
were priced 20-40 % less than those of its competitors. Analysts felt that Amul
could price its products low because of the economies of scale it enjoyed.

 Amul's obsession with keeping down manpower cost and dealer commissions
added to the strength . In ice-creams for example, Amul's retail commission in
Ahmedabad city was 17.5% which was 10% lower than what competitors
offered.

 However, all said and done, Amul seemed to be all set to make steady progress in
the coming years with its products having become quite popular in both rural and
urban households. Said Vyas, "We've handled liberalization and globalization far
better than our transnational rivals. It has made us fitter than ever."

Period of diversification

 In 1996, B M Vyas, Managing Director, GCMMF,


commissioned the Indian Market Research Bure (IMRB) to conduct a consumer
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survey to identify the products consumers wanted from Amul .Based on the
findings, Amul entered into the following areas: ice cream, curd, paneer, cheese,
and condensed milk.

 In 1997, Amul launched ice creams after Hindustan Lever acquired Kwality,
Milkfood and Dollops. Positioned as the 'Real Ice-cream,' Amul Ice cream was
one of the few milk-based ice creams in the market.

 In 1999, Amul launched branded yoghurt in India for the first time, when it test
marketed "Masti Dahi" in Ahmedabad first and then introduced it all over the
country

 In January 2000, Amul re-entered the carton milk market with the launch of
"Amul Taaza" in Mumbai. Amul Taaza was non-sweetened, plain, low fat milk.
The product was positioned as a lifestyle as well as functional product.

 In November 2000, Amul decided to promote mozzarella cheese, which was used
in pizza. The growing demand for mozzarella cheese from pizza making
companies like Pizza Hut and Domino's Pizza was expected to give Amul's
cheese sale an additional push.

 In August 2001, Amul decided to enter the ready-to-eat stuffed paratha,


cheeseburger, cheese and paneer pakoda, and cheese sandwich segments. The
products were marketed under the SnowCap brand. The SnowCap brand also
included tomato sauce and ketchup.

Introduction
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 The largest food brand in India and


world's Largest Pouched Milk Brand
‘Amul’ is a brand name managed by
Gujarat Co-operative Milk Marketing
Federation Ltd. (GCMMF).

 This name has its origin in the Sanskrit


word "Amoolya," (meaning Priceless)
and was actually suggested by an
employee of Gujarat Co-operative Milk
Marketing Federation Ltd. (GCMMF)

 The Gujarat Cooperative Milk Marketing


Federation Ltd, Anand (GCMMF) is the
largest food products marketing
organisation of India and is the apex
organization of the Dairy Cooperatives
of Gujarat.

 With a turnover of INR 67.11 billion


GCMMF has created an economic
network that links :

 millions of consumers in India and


abroad,

 2.8 million village milk producers,


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 a cooperative system that includes


13,141 Village Dairy Cooperative
Societies (VDCS) at the village level,

Theoritical perspective

History

• Condition of dairy farmers

• Plea of dairy farmers and role of Sardar


Vallabh Bhai Patel

• Formation of first District Co-operative


‘Kaira’
Formation of ‘GCMMF’

Condition of Dairy farmers

 There was exploitation of marginal milk


producers by traders or agents of
existing dairies in the small town
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named Anand (in Kaira District of


Gujarat) and Polson Dairy .

 Other problems faced by dairy farmers


in Gujrat.

Role of Sardar Vallabhai patel

• Unfair trade practices and minimal


returns angered dairy farmers.
• So under the leadership of
Tribhuvandas Patel dairy farmers
approached Sardar Vallabh Bhai Patel
for a solution.
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Formation Of District Co-operative Kaira

• Thus the first District Cooperative was


established to collect and process milk
in the District of Kaira in 1946.

• Milk collection was also decentralized


and village level cooperatives were
established to organize the marginal
milk producers in each of these villages.

• The brand Amul was formally registered


on December 14th, 1946

Formation Of ‘GCMMF’

• Later on with the help of Dr. Verghese


Kurien and Shri H M Dalaya this
revolution spread to most of the
districts in Gujrat.

• Thus GCMMF came into being in the


year 1973.
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• Initially, the brand name Amul was with


Kaira
district dairy cooperative, but later they
decided to give it to GCMMF

The First Advertising Strategy

1966 sees the creation of the Amul girl


by Sylvester daCunha of the ASP
Advertising agency as a rival to the
Polson .

In 1967 the first hoarding was put up in


Mumbai with the Amul girl.
The tag line of “Utterly Butterly
Delicious” came out in October of 1967.

The first Topical ad came out in 1969 at


the beginning of the Hare Rama Hare
Krishna movement.
One of the most conservative FMCG
entities — GCMMF — spends a mere 1%
of its turnover on promotions.

Amul butter girl is one of the longest


run ad campaigns in the country for 43
years.
Entered in the Guinness Book Of World
Records for being the longest running
campaign ever.
14

Digital Advertising

Amul Cyber Store


Amul in Social Networking
Amul Indulges in Second Life marketing
– Advergaming
Business Model

 The father of the White Revolution, Dr. Verghese Kurien and the World Food
Prize & the Magsaysay Award winner, is responsible for the grand success of
brand ‘Amul’.
15

In a recent survey,

 GCMMF ranked amongst the top ten FMCG firms in the country

 AMUL rated the second most recognized brand in India amongst all Indian and
MNC offerings
16

 Objective :

 Deliver profitable and equitable returns to a large number of farmers for a


long period of time

 Additional objective

 Develop the supplier over the long term through social change.

 Amul’s Supply chain is one of the most complicated in the world

Success depends on
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Developing Demand

 Consumers- Limited Purchasing power

 Modest consumption levels of milk

 Low –cost price strategy

 Products affordable & attractive

Distribution Network
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 Dry and cold warehouses to buffer inventory

 Transactions on an advance demand draft basic

 Just-in-time inventory strategy improves dealers' return on


investment (ROI)

 All branches -dedicated vehicle operations.

Umbrella brand

 Common brand for most product categories produced by


various unions: liquid milk, milk powders, butter, ghee,
cheese, cocoa products, sweets, ice-cream and condensed
milk

 Avoided inter-union conflicts

 Opportunity for the union members to cooperate in


developing products.
Third Party Service Providers

 Unions' core activity -milk processing and the production of


dairy products.

 Marketing efforts , brand development - By GCMMF

 Logistics of milk collection, distribution of dairy products,


sale of products through dealers and retail stores, provision
of animal feed, and veterinary services –By Third Parties

Co-ordination
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 Large number of organisations and entities in the supply


chain

 GCMMF and the unions play a major role in achieving


control

 Interlocking control - The board is drawn from the heads of


all the unions, and the boards of the unions comprise of
farmers elected through village societies

 The federation handles the distribution of end products and


coordination with retailers and the dealers.
The unions coordinate the supply side activities.

Best practices

 Small group activities or quality circles at the federation

 TQM program at the unions

 Improvement programs across to a large number of


members and the implementation rate is consistently high

 For example, every Friday, Meeting without fail, between


10.00 a.m. and 11.00 a.m – to discuss quality concerns
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 Village societies becoming individual improvement centres

Methodology

Amul Revolution – Impact Study

Pre-Amul Era
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 Over five decades ago, the life of a farmer in


Kaira District was very much like that of his counterpart
anywhere
else in India.

 His income was derived almost entirely from seasonal


crops.

 Milk distribution was by private traders. . As milk is perishable,


farmers were compelled to sell it for whatever they were offered.
Often, they had to sell cream and ghee at throwaway prices. In this
situation, the one who gained was the private trader.

 Only one company , a British company(Polson) existed and it


exploited the farmers

The Turnaround

• Farmer’s realization that they had to market milk


themselves to earn better is what led to the establishment of
the Kaira District Cooperative Milk Producers' Union
Limited (popularly known as Amul)

• An assured market proved a great incentive to the milk


producers of the district. By the end of 1948, more than 400
farmers joined in more
village societies, and the quantity of milk handled by one
Unionincreased from 250 to 5,000 liters a day.

Socio-Economic Impact

• The yearly elections of the management committee and its


chairman, by the members, are making the participants
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aware of their rights and educating them about the


democratic process.

• Voluntary mix of the various ethnic and social groups for


common causes and mutual betterment has resulted in
eroding many social inequilibria. The rich and the poor, the
elite and the ordinary come together to cooperate for a
common cause.

• Live exposure to various modern technologies and their


application in day-to-day life has not only made them
aware of these developments but also made it easier for
them to adopt these very processes for their own
betterment.

• More than 900 village cooperatives have created jobs for


nearly 5000 people in their own villages -- without
disturbing the socio-agro-system -- and thereby the exodus
from the rural areas has been
arrested to a great extent.

• Besides, women, who are the major participants, now have


a say in the home economy. Initiated “Mahila Pashupalan
Talim Karyakram” for women resource persons of the
member unions.
• 48 per cent of the income of the rural household in Kaira
District is being derived from dairying. Since dairying is a
subsidairy occupation for the majority of the rural
population, this income is helping these people not only to
liberate themselves from the stronghold of poverty but also
to elevate their social status.
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• CSR sensitive organizational structure – the 3 tier model


from village societies to state cooperatives ensures
accumulation of human capital which in itself leads to
development of society and the economy.

• Amul Relief Trust – formed in 2001 by GCMMF under the


Chairmanship of Dr. V. Kurien.

• The Trust reconstructed 6 schools damaged by the 2001


earthquake at a cost of Rs. 41.1 millions in Kutch area.

• Ripple Effects

• Anand Pattern extended to other districts in Gujarat -


Mehsana, Sabarkantha, Banaskantha, Baroda and Surat
where farmers easily adopted Amul’s gameplan.

• The Himalayan Cooperative Milk Producers’ Union


Limited (HIMUL) was formed at the foot of the Himalayas
in West Bengal in 1973 on the same lines as Amul.It
includes both dairy and non-dairy.

• At a later stage oilseeds, fruit and vegetables, salt, and tree


sectors also benefited from it's success.

Institution Building

• The National Dairy Development Board (NDDB) was


created in 1965, fulfilling the desire of the late Lal Bahadur
Shastri - to extend the success of the Kaira Cooperative
Milk Producers' Union (Amul) to other parts of India.
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• Founded by Dr. Verghese Kurien and Dr. Amrita Patel is


the current Chairman of the National Dairy Development
Board, Anand.

• 96000 cooperatives have been integrated by this to date.

• To promote the development of cooperatives NDDB has set


up separate units and works in close association with a
number of national level institutions Sabarmati Ashram
Gaushala (SAG), Bidaj, Animal Breeding Centre (ABC),
Salon, Institute of Rural Management, Anand (IRMA),
National Cooperative Dairy Federation of India (NCDFI),
Anand and Foundation for Ecological Security (FES),
Anand, Mother Diary, Delhi.

• Institute Of Rural Management formed in 1979 with Swiss


Agency for Development Coordination and Govt of
Gujarat to develop people through management education.

Analysis

Marketing and Advertising Strategies

1)Quality
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• No brand can survive long if it’s quality


is not equal or exceed customer
expectations.

• Incase of food product hygienic, taste,


bacteriological & organoleptic standard
–main essence.

2)Value for money

• Customers get more than what they


pay.

• Keep price fair & do best to ensure that


retailers don’t gain at the expense of
customer.

3)Availability

 Brand available when and where


customers want.

 Amul has nation’s finest distribution


network.

4)Service
26

 Committed to total quality.

Product Scope Strategy

“Perspective of the product mix of a


company”

Different products of Amul and its variants

Bread spreads
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 Amul Butter
 Amul Lite Low Fat Bread spread
 Amul Cooking Butter
 Delicious Margarine Pure Ghee

Sweets

 Amul Shrikhand & Amrakhand


 Amul Mithaee Khoya Gulabjamaun
 Amul Basundi

Milk Powders

 Amul Full Cream Milk Powder


 Amulya Dairy Whitener
 Sagar Skimmed Milk Powder
 Sagar Tea and Coffee Whitener
Sweetened Condensed Milk
 Amul Mithaimate

Fresh Milk

 Amul Taaza Toned Milk 3% fat


 Amul Gold Full Cream Milk 6% fat
 Amul Shakti Standardised Milk 4.5% fat
 Amul Slim & Trim Double Toned Milk
1.5% fat
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 Amul Saathi Skimmed Milk 0% fat


 Amul Cow Milk

Curd Products

 Yogi Sweetened Flavoured Dahi


(Dessert)
 Amul Masti Dahi (fresh curd)
 Amul Lite Dahi
 Amul Prolife probiotic Dahi
 Amul Masti Spiced Butter Milk
 Amul Lassee

Chocolate & Confectionery

 Amul Fruit & Nut Chocolate


 Amul Bindazz
 Amul Rejoice
 Amul kesar

Brown Beverage

 Nutramul Malted Milk Food

Amul Ice creams

 Vanilla Royale
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 Royal Treat Range (Butterscotch,


Rajbhog, Malai Kulfi)

 Nut-o-Mania Range (Kaju Draksh, Kesar


Pista Royale, Fruit Bonanza, Roasted
Almond)

 Nature's Treat (Alphanso Mango, Fresh


Litchi, Shahi Anjir, Fresh Strawberry,
Black Currant, Santra Mantra, Fresh
Pineapple)

 Sundae Range (Mango, Black Currant,


Sundae Magic, Double Sundae)

 Assorted Treat (Chocobar, Dollies,


Frostik, Ice Candies, Tricone,
Chococrunch, Megabite, Cassatta)

 Utterly Delicious (Vanila, Strawberry,


Chocolate, Chocochips, Cake Magic)

Milk Drink
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 Amul Kool Flavoured Milk (Mango,


Strawberry, Saffron, Cardamom, Rose,
Chocolate, Butterscotch)
 Amul Kool Cafe
 Amul Kool Koko

Health Beverage

 Amul Shakti White Milk Food

Product Elimination

Product reaches the stage where continued


support is no longer justified where
performance is falling short of
expectations, it is desirable to pull the
product out of the market place.

“ It eliminated “JALDHARA” a decade ago


as Bottled water product do not have
potential customers”.

Current Market Share


31

100
90
80
70
60
50 OTHERS
40 M ARKET SHARE

30
20
10
0
AM ULYA AM UL CHEESE M OZARELLA
BUTTER SPREAD

Findings

Product Positioning
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Placing a product in that part of the


market where it will receive a favorable
reception compared to competing
products.

 A mass market player, no premium


offerings

 USP – Quality with affordability

 Up against niche players – value


addition to customers

 Sheer size and scale of operation

 New offerings for health conscious and


vibrant India –

 India’s First Pro-Biotic Wellness Ice


cream & Sugar
Free Delights For Diabetics.

 Low Priced Amul Ice Creams made


Kwality Walls life hell.
33

Flank Attack.. Age Wise..


Aug 25 2007

 Amul launches Chocolate milk under


brand name of
‘Amul Kool Koko’.

 This is targeted at teenagers and


youths.

Nov 11, 2007

 Amul in Multinational Arena With Snack


Launch: “Munch Time”.
Flavors: Masala , Mint and Tomato
34

New Product Activity.


Nov 26, 2007

 Amul Launches “Fresh Paneer” (Free


From Any Harmful Chemicals)
Flank Attack—Expanding its Cheese
Segment.
Current market share 65%.

Product Repositioning

 New Competition

 Change in consumer preference

 Wrong original positioning


 Amul marketed bottled water product
named “JALDHARA” but due to less
35

potential in the market it turned out to


be blunder.
 Now Amul is all set to launch bottled
water “NARMADA NEER”.

Product Overlap

Situation where company decides to


compete against its own brands.

 Powdered Milk
 Health and price Conscious

 Cheese Spreads
 Specific Vs General

“Amul Processed Cheese Vs Cheese


Spread”
USP:
Cheese spread is highly accepted
spread for regular use.
36

 Milk Drinks
“Nutramul Energy Drink Vs Amul Kool”

Defense Strategy

 Moving consumers from loose milk to


packaged milk and gradually move
them up the value chain (tetra pack to
beverages, all available under the Amul
brand)

 A sound strategy likely to work.


37

 Being exposed to a brand, it is natural


for a customer to try more products
 Improving socio-economic condition of
the customer anchors the desire to
enhance lifestyle

Amul defending its turf

 Largest milk brand in Asia marketing


more than 30 different brands of dairy
products like cheese, ice-cream,
condensed milk, ready-to-eat pizza,
beverages etc.

 Amul is the market leader in ghee and


butter

 Amul Kool and Kool Café doing well

 Defending against names like


Mahananda, Vijay, Milma and other co-
operative milk brands

 Aggressive moves against FMCG and


F&B brands like Britannia, Nestle and
Mother Dairy among others.

Segmentation
38

 Wide range of product categories caters


to consumers across all market
segments. For example, Amul Kool is
targeted at children, while teenagers
prefer Kool Café, as it has a cool
imagery associated with it.
 Segmentation is not as easy in curd and
low fat products, due to mixed
audiences, various culinary applications
, eg. ghee, butter and cheese.

“In India, the most used spread is ghee,


then butter, cheese, low fat butter,
margarine, cheese spread and
mozzarella cheese.

Targeting

 Changing retail environment


 Striking out on its own, with Amul
Outlets or parlors to deliver consumers
total brand experience
 Launched in 2002, there are now 400
Amul parlors across the country, which
contributed 3% to the brand’s total
turnover last year.

High profile locations: Amul parlors are


today present on campuses of Infosys,
39

Wipro, IIM-A, IIT-B, Temples, Metro rail


and railway stations in Gujarat.

Promotion

 Given this wide product portfolio,


Amul’s approach is to promote its
brands in a rotational cycle of two to
three years.
 After ice-creams were launched in 1996,
the category was re-visited in 1999, in
order to improve availability of the
product and make it affordable.

The focus shifted to cheese in 2001,


Amul Masti Chaas in 2004-05 (sales of
Masti dahi grew by 25%), Nutramul and
Kool Kafe in 2006 and Amul Koko — cold
chocolate drink in 2007

 Uses a variety of media to communicate

 Most famous is billboard campaign

 The endearing polka dressed girl and


pun at various issues increased brand’s
fan following.
40

 Below-the-line activity has grown too —


such as the Amul food festival, which
has been held for the last four year
between October and December in
about 50,000 retail outlets.

 The Chef Of India promo invites hotel


chefs to come up with recipes using as
many Amul products as possible, and is
conducted at city, state and national
level.

Amul Competitors

Butter

 Britannia
 Nestle

Cheese

 Britannia

Baby Food

 Nestle
 Heinz
41

Dairy Whitener Segment

 Nestle
 Britannia

Ice creams

 HLL

Chocolates & Confectionaries

 Cadbury
 Nestle

Pizza

 Pizza Hut
 Dominos
 Nirulas Frozen pizza

Curd

 Nestle
 Mother Dairy

Ultra High Treated Milk


42

 Nestle
 Britannia

Sweet Condensed milk

 Nestle

Cottage Cheese(Paneer)

 Britannia

Milk Additives

 Cadbury
 Smithkline Beecham

Flavored Milk

 Britannia
43

SWOT Analysis

In this part we are going to analyses the strength, weakness, threats and opportunity of the PepsiCo

Strength

• Demand profile
• Flexibility of product mix
• Technical manpower
• Trust enjoyed by its products
• Strong cooperative organization
• Introduced TQM

Weakness

• Logistics of procurement
• Competition
44

• Short self life of its products


• Completely dependent on villages for
its raw material
• Salaries offered is less compared to
competitors

Opportunities

• Value addition
• Export potential
• Used internet to sell its products
• Introduced hybrid products in the
market
• Exploring foreign markets

Threat

• Milk vendors, the un-organized sector


• Strong competition from MNCs
45

• Competition from private dairies and


local milk suppliers
• The yield of Indian cattle still much
lower than other dairy countries

Conclusion

 Amul envisages that the dairy cooperatives of Gujarat will


have a group turnover of Rs. 27000 crores by the year 2020.
This will be a three-fold increase over its current group
turnover of approx. Rs. 9600 crores. Milk production in
milk shed area will increase to 231 lakh kg per day (23.1
million kg per day), at an annual growth rate of 4%.

 Amul will create fresh avenues for growth by tapping the


rising demand for new value-added products. Special
emphasis will be given to strengthening their presence in
the large market for liquid milk, in metropolitan cities.

 Plan to double to processing capacity of dairy plants to 20.7


million kg per day, by 2020. This would include multi-fold
capacity expansion for major product categories including
milk powders, Ice-cream, paneer, cheese, ethnic sweets,
curd, ghee and other dairy products.
46

BiblioGraphy

List of published sources consulted during the course of the


project :-

1.) www.google.com
2.) www.youtube.com
3.) www.msn.com
4.) www.yahoo.com
5.) The Economic Times
47