Mission and Vision statement of AMUL India:

The vision of the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) while
establishing AMUL was to supply milk to the Indian consumers so that the country
can turn from a milk-deficient country to one of the largest producer of milk. This
was what was called as the white revolution or Operation Flood and was completed
under the able guidance of late Mr Verghese Kurien. AMUL thus follows the tag line:
The taste of India. With time AMUL extended from just supplying milk to
manufacture other dairy products.
The model that AMUL follows is the evidence of how even today it follows its
unmentioned mission and objective. This model is a beautiful mix of rural and
corporate India.
The AMUL Model of dairy development is working on a three-tiered structure with
the dairy cooperative society of ANAND which is 1 st- village level federated under a
milk union 2nd- district level and a federation of member unions and 3 rd- at the state
level. The three tier structure includes:
Establish a direct link between milk producers and consumers by
eliminating intermediaries: This is done by establishing the AMUL outlets and by
selecting few retail outlets to distribute the milk to final consumers.
Strengthening Milk Producers (farmers) control on milk procurement,

processing and marketing: this was the first objective of Amul to provide number
of opportunities to the farmers at village level so that they can become leading milk
producers. It was done by introducing new technologies and method for effective
milk procurement.
Professional management: The financial decisions, procurement decisions,

distribution decisions and other top management decisions are taken so as to

maintain the brand image of AMUL.
Amul has established them in Indian Dairy market in a way which has given India
the status of leading milk producer in the world. In India about 15 million of milk
farmer procure milk and pour it at 1,44,246 dairy co-operative society around the
country. In India milk process takes place in 177 district co-operatives and its
marketing take place from 22 state marketing federation which ensure better life of
millions of the people.
Thus in this way AMUL is being driven in accordance to its mission and objective.

PESTLE ANALYSIS
POLITICAL In India Government is giving special attention to Dairy sector. Department of
Animal Husbandry Dairying & Fisheries (DADF) is one of the Departments in the Ministry of
Agriculture which efficiently control Dairy Industry in INDIA. In todays condition there is political
stability which is in not only favouring Dairy but also favouring every other sector at the same time.
1. To encourage growth and development in Dairy sector government has allowed 100% Foreign
Direct Investment (FDI).
2. Implementation takes place at three different level; Implementation of State Schemes, Central
Government Schemes, and by both Centre and State shared Schemes.

3. In each state, State has their own federation or dairy department but in large, Indian market is
Tightly controlled by many large number of private companies like. AMUL, MOTHER DAIRY etc.
4. For good health of Cattles government provide monetary as well as technical support to the cattle
owners which include free Insurance also.
5. Government provide assistance to strengthening and expanding village level infrastructure so that
milk procurement can be done in more efficient way which indirectly provides producers golden
opportunities to access to markets.
6. For the betterment of the processes government has introduced Degree/Diploma course in Food
Processing and Technology.
7. Latest focus of Indian Government is on the establishment as well as modernisation of FPI (Food
Processing Industry) district level and in some cases on the village level too.

ECONOMICAL - India comes under the growing economy. India was less affected by the
recession in compare to the other developed country so there are bright chances for continuous
economic growth in India in near future.
1. GDP growth rate is approx. 5.3 to 5.5% currently.
2. In India large proportion of the population comes under the middle class and at the same time it
has been also observed that there has been a rapid growth in the disposable income. At an average
household savings rises from 15-16 % of GDP in 1980s to 31 percent in 2011-12 (1), in recent years
and most important thing is that the working population of India is nearly 56 to 57% of total
population.
3. In India department of Agriculture and food processing both together contributes around 20.5%
GDP and within this 31 % of the agriculture contribution in the GDP comes only from Dairy
Industry. (2)
4. To start Dairy business at small/large level government provide a very easy loaning facility
through its dedicated department of GRAMODHYOG VIBHAG.

SOCIAL
1. Because of the changes in the consumer lifestyle and orientation toward health government has
fixed many norms within that every dairy industry will have maintain a certain standard of the milk
product.
2. Dairy business helps in overall improvement of rural economy of India.
3. By having Dairy business with few number of Milch animal a person can easily make business of
around Rs. 20000 to 25000 Rs/year (3) (milk productivity depending largely upon the cow/buffalo
breed and region). Prior conducted Studies shows that dairy business alone capable to provide at least
180 days business to a family (cattles gives milk for at least 180 days, in large it depends upon the
breed and ragion).
BREED wise Milk Productivity

TECHNOOGICAL
1. Milk is a perishable item and Advancement of newer technologies is highly needed for dairy
industry for measurement of purity (concentration), procurement and processing.

2. Government providing thrust on research and development to create value for customer as well
as for farmer also.
3. Usually cost of machinery in dairy industry is very high and government has taken several
initiatives for up-gradation of equipment.
4. Recently every industry has started using RFID (Radio frequency identification) technology to
track movement of milk van.
5. As the point mention earlier every dairy product based company are also focusing on the
implementation of SAP and ERP across their organisation to achieve the best supply chain
advantages, which not only improve supply chain but also help organisation for forecasting &
planning of raw material, monitoring performance.

LEGAL ENVIRONMENT Dairy industries in India are controlled by The Department of

Animal Husbandry and Dairying (AH&D) - now renamed as Department of Animal Husbandry
Dairying & Fisheries (DADF) is one of the Departments in the Ministry of Agriculture. Generally
legal framework in dairy industry is divided into two parts.
1. Legal framework and Regulations of State government

2. Legal framework and Regulations of central government

Government has announced 100% FDI in dairy industry to attract foreign investor to start business in
India, and indirectly it help in modernization of the industry.

ENVIRONMENTAL ISSUES
1. Generally Milk sold in plastic pack in very high quantity and because of non-disposability it
increase pollution level.
2. Generally cow emits a large amount of methane gas through belching; a methane gas is 23 times
more powerful than carbon dioxide.
3. Sometime dairy business causes some health issues like. Asthma and skin problem to the people
who took care of the animals it also attract flies.
4. Improper management of waste causes air pollution in nearby areas and some time it also causes to
unnatural growth of fungi and bacterias.

5. Using waste material properly help environment as well as former too, Cattle waste material is
highly needed in farming as a fertilizer and for growth of plants.

Porters five forces for AMUL India:

Threat of new entrant:

There is very stiff competition in the dairy market and it requires time and money to
get established in the market. There has to be a magnificent distribution strategy so
as to provide the packaged milk in time and also there has to be a brand image so
as to enter into other dairy market such as chocolates, curd et cetera. Packaged
milk faces huge competition even at state level and it requires a lot of efforts to
overcome these problems for a new entrant. But it is a lucrative industry and there
is opportunity to get established like Mother Dairy did when it entered in Uttar
Pradesh recently. Thus it is difficult yet not impossible to enter the market and
hence this force is medium in strength. Hence we can say threat of new entrant is
MODERATE.

Bargaining power of suppliers:

We have to consider that AMUL is being managed by a cooperative body which is
known as Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which lets
the suppliers (generally from rural area) to bargain for higher prices for their supply
to be made. But, there are some reasons as to the regulations which restrict their
bargaining power and there is lack of awareness among rural suppliers that makes
this factors force medium. Hence we can say that the bargaining power supplier is
Medium.

Bargaining power of customers:

The dairy industry includes not only milk, but milk products such as curd, ice cream,
butter, chocolates and milk powders et cetera. There are various options available
for the customers to choose from. They can choose from various brands and even
there is availability of substitutes as many homes still consume buffalo and cow
milk instead of packaged milk. There is availability of substitutes for other dairy
products which consumers generally prefer. . This makes their bargaining power
high. Hence on the basis of the above we can say the bargaining power of customer
is HIGH.

Threat from existing competitors:

A lot of players are present in the dairy market. There are various companies such
as Nestle, Mother Dairy, Parag and even there is Britannia which provides tetra
pack milk variants. Then there are other state level local dairy milk providers such
as Shudh, Gayatri et cetera that further adds to the list of existing competitors. For
ice creams, there is Mother Dairy and Kwality Walls. Mother Dairy and Parag offer
stiff competition in almost every dairy milk sector. Paras offers competition in
bottled milk variants. Products such as cheese and cheese spread also have huge
competition such as there is Britannia, Nestle which adds to huge competition in
this sector. So on the basis of the above we can say threat of existing competitor is
HIGH.

Threat of substitutes:
The packaged milk can be substituted by open milk, i.e. milk obtained directly from
cows and buffaloes. In India, the rural area and even some parts of tier one and two
cities consume open milk. But as the mass is realizing the effect of open milk on
health and are becoming more health conscious, they are moving towards packaged
milk. For other products such as curd, the packaged curd is consumed mostly by
college students or single and busy people. Housewives still prefer to make curd at
home and even lassi at home. These act as substitutes. But products such as ice
creams, butters, cheese and cheese spread cannot be easily substituted. Hence on
the basis of above argument we can say the threat of substitute is MODERATE.

Product wise Competitor Analysis

Indian dairy industry is one of the most successful development program
initiated by the government of India after independence period. Indias Total
dairy industry consists many organise and unorganised sector e.g. milk
processing in India is around 35% of total milk production and of which
organised sector consist account of around 13% of milk processed and rest of
them is covered by unorganised sector (it sold as non-posturised milk, Or fresh
milk).
Cooperative firm claim a major part of the processed milk industry in India,
cooperative federate in 15 state as state milk cooperative federation but as the
time passes many new player enters in this attractive sector like Amul (GCMMF),
SARAS (RAJASTHAN), Verka (PUNJAB), Vijaya (ANDHRA PRADESH), and also it has
been observed that Indian market

showed their interest in some specific milk products like packaged milk, butter,
cheese, ghee and ready-to-drink-milk products.
As Amul have presence in market with large number of products and within
certain type of product it has many varieties, below is the analysis of some of
Amul product which has high market share and huge sources of Revenue in
India.

BUTTER
Amul is the market leader in butter segment, it account around 90 % of the
market. Butter market value is around Rs.1200-1400 Cr. And it is one of the
major revenue sources for Amul. Other players are Nutrilite, Nestle and
Britannia.
For being a market leader in butter segment Amuls strategy was to position
himself as health conscious low fat and low cholesterol Bread spread provider
because currently every customer is highly health conscious.

CHEESE

Cheese market is worth of Rs. 400-500 cr. in India, and again Amul is market
leader in cheese segment it account around 80% of the market share and this is
one of the main revenue source for Amul.
In cheese segment Amul is competing with its own product example Amul
Processed cheese and Cheese Spread but the strategy was to keep competitor
out of the market. Initially Britannia launched cheese cubes with slice and within
few months Amul too come up with sliced cheese with pack of 5 and 10 slice per
pack. Major players in cheese market are Britannia and Nestle.

ICE CREAM
Current Indian ICE-CREAM market is worth of Rs. 1500Cr. and Amul account 40
% of the total market. Amul is number 1 ice-cream brand in India and its market
share is about 4 times to the closest competitor HLL. In year 2007 Amul
launched sugar free and prolife probiotic wellness ice-cream basically the aim
was to provide low fat, sugar free diabetic delight & wellness ice-cream is to
target health conscious customer.
The strategy followed by Amul was to provide low price ice-cream to the
customer and this work in two way for Amul,
1. Amul has its own dairy and they know that they can provide product at
minimum margin level but it was not possible to any other players. E.g. Kwality,
vedilal etc.
2. Before 2007 no any other player launched low price and low fat ice cream,
and this created another customer segment for Amul apart from targeted Child
and young segment.

POUCHED MILK
Indian pouched milk market value is around Rs. 50000 cr. and Amul is leading
player not everywhere but only in some of specific states its Overall market
share in India is around 25%. Amul faces direct competition with state dairy
federation they have their wide network in that particular state only. E.g. SARAS
in Rajasthan, Verka (PUNJAB), Vijaya (ANDHRA PRADESH), Mother Dairy had its
monopoly in NCR region and is one of close competitor in pouched milk market.
Pouched milk is a low margin product but demanded volume is very high.
But recently Mother dairy has started following the pattern followed by Amul to
capture market and very slowly Mother dairy is expanding its business from NCR
to other part of India.

MILK POWDER

Milk whitener is widely known as milk powder and it market value in India is
around Rs. 3000 mn. Amul constitute 45 % of the milk powder market share
followed by Nestles 23 %. Again Amul is dominant in this market. Amul initiated
in this market with small pouches of whitener which were affordable and anyone
can be used any time and within a short span of time Amul become market
leader in this segment. Major competitors for milk whitener are Nestle,
Britannia, Dynamix Diary, Sterling Agro, Mohan Food.
To trap large portion of market Amul decided to introduce low price and very
easily they eliminated the competition from its competitor.
FLAVORED MILK
Total flavoured milk market in India is around Rs. 300 cr. Amul has a long variety
of flavoured milk in the market like Amul KOOL, Nutramul energy drink, Amul
Masti Spiced Buttermilk, Amul Kool Chocolate Milk etc. this concept of flavoured milk
come into picture after the research made by the company and they founded that
there is a good scope to introduce such product which do not require to be process
after purchase and people can consume it anywhere and anytime. In this segment it
has direct competition with Britannia and Mother dairy, Coca-Cola and Radbull.
Recently Amul launched energy drink (Nutramul Energy Drink) and sports drink
(Stamina Sports Drink) to compete with existing players.
Apart from all mentioned above Amul is also planning to take initiatives for
capturing tourist who board train from railway station, so to capture this market
they have plan to allot stall on some big railway stations. This initiative will help
Amul to capture a new market segment.