Contents

1. AMUL – COMPANY INTRODUCTION ............................................................................................... 2

1.1 Introduction ............................................................................................................................................ 2
1.2 Competitors and Market size................................................................................................................ 2
2. ADVANTAGE & DISADVANTAGE OF COOPERATIVE SOCIETY – .......................................... 4
 1. AMUL – COMPANY INTRODUCTION

1.1 Introduction

The Taste of India, a brand so distinctively Indian has been a part of our lives for nearly five decades. Amul

inspired ‘Operation Flood’ and heralded the ‘White Revolution’ in India. It began with two village cooperatives

and 250 liters of milk per day but today it distributes over a million liters of milk per day, it also produces

various processed milk products like Butter, Ice Creams, Chocolates, Cheese, Milk Chocolate drinks, Curd

and others.

1.2 Competitors and Market size

Amul has seen exceptional growth in the past seven years. The company continues its adaptive and

evolutionary mechanism as it has done for decades. Amul’s revenue for 2018-19 has been reported at more than

INR 38000 crores. Currently, the company is setting its sight to achieve record growth with its INR 50,000

crores target in 2020. Amul has positioned itself as the market leader in India because of the organized ice

cream sector which has a 1/3rd market share in the country. The ice cream sector is expected to grow by 30% in

the coming years, whereas its flavoured milk and cheese products have been forecasted to grow above 20%.

The Indian Dairy Industry consists of local and regional players, there are an estimated of 150 players in the

organised market and more then 1000 local players. Below is the market share of Amul in different product

lines.

Category Market Share Market Position Major Competitors

Butter 87% 1 Britannia, Nestle

Pouched Milk 25% 1 Verka, Mother Dairy and regional players

Cheese 50% 1 Britannia

Ice Cream 38% 1 Kwality, Mother Dairy

Chocolate 10% 3 Cadbury , Nestle

Curd 61% 1 Mother Dairy

 2. COOPERATIVE vs. CORPORATE SOCIETY:

When you start a business, one of the first things to do is decide how the company will be legally structured. A

business’ structure determines who is liable for the company’s debt and its actions. One of the simplest business

structures is a sole proprietorship, Other business structures, from limited liability partnerships to corporations

and from general partnerships to cooperatives, offer owners some protection if the company has difficulty. Aside

from liability protection, there are a few other reasons to choose one business structure over another.

WHAT IS A CORPORATION?

A corporation is a legal entity owned by a group of shareholders. How much control a shareholder has in a

corporation depends on how many shares of the company they own. Corporations are completely separate from

their owners. In fact, corporations are so distinct from their owners that they are legally defined as their own

“person.” When a business is a corporation, it can enter into its own contracts, take on its own debts and pay its

own taxes.

WHAT IS A COOPERATIVE?

A cooperative, is another type of business entity. What sets a cooperative apart from other types of corporations

is who the owners of the company are. While other types of corporations are owned by shareholders or

stockholders, co-ops are owned by its members or the people who use the services of the cooperative. Some

cooperatives are employee-owned. To become a member of a cooperative, a person makes a financial

contribution. Since the focus of cooperative structure is on building and maintaining community, most exist to

meet the specific needs of their members. The opinions and votes of each member in a cooperative are treated

equally. Any profits the cooperative earns are either re-invested in the company, or distributed among its member-

owners, as with a for profit corporation.

SIMILARITIES BETWEEN COOPERATIVES AND CORPORATIONS:

 1. One of the most notable similarities between a cooperative corporation and other types of corporations is

the fact that owners of both cooperative and other corporations have limited liability.

2. It’s important to note that those who invest in either a corporation or a cooperative aren’t wholly separate

from the company. They are still responsible for the amount they have contributed to the entity.

3. Both can continue to exist even after the original shareholders have retired, stopped being members, sold

their shares or died. The shares of either a cooperative or corporation are transferable, meaning they can

change hands throughout the life of the company.

DIFFERENCES BETWEEN COOPERATIVES AND CORPORATIONS:

In fact, there are more differences between co-ops and other corporation types than similarities. Some of the

notable differences include:

1. Purpose: Cooperatives usually exist to serve their members or meet a particular need of their members.

The purpose of for-profit corporations is usually to increase the wealth of the shareholders.

2. Identity of board members: The people who serve on the boards of cooperatives come from the co-op’s

membership ranks, for the most part. In the case of other types of corporations, outsiders that is, non-

shareholders are often appointed or elected to the board.

3. Voting rights: At cooperatives, each member gets one vote. With other corporations, how many votes a

shareholder gets is based on the number of shares they own or the size of their stake in the company.

4. Accountability: Cooperatives must be accountable and serve the needs of all members. Other

corporations are most accountable to the shareholders who hold the largest stake in the company.

3. ADVANTAGE & DISADVANTAGE OF COOPERATIVE SOCIETY –

Advantage Disadvantage
The membership of a cooperative society is open to Cooperative societies are based on the principles of

all. Any person with common interest can become a co-operation and therefore harmony among members

member. The membership fee is kept low so that is important. But in practice, there might be internal

everyone would be able to join and benefit from politics, differences of opinions, quarrels etc. among

cooperative societies. members which may lead to disputes.

The government with a view to promote the growth Co-operative societies are not able to raise their own

of cooperative societies extends all support to them. resources. Their sources of financing are limited and

It provides loans at cheap interest rates, provides they depend on government funds. The funding and

subsidies etc. the amount of funds that would be released by the

government are uncertain.

Cooperatives can be formed much easily when Since the management is taken care of by the

compared to a company. Any 10 members who have managing committee, no individual can be made

attained majority can join together for forming a accountable for in efficient performance. There is a

cooperative society by observing simple legal tendency to shift responsibility among the members

formalities. of the managing committee.

The surplus generated by the cooperative societies is Co-operative societies are managed by the managing

distributed in an equitable manner among members. committee elected by its members. The members of

the managing committee may not have the required

qualification, skill or experience. Since it has limited

financial resources, its ability to compensate its

employees is also limited.

4. KEY ROADBLOCKS FOR COOPERATIVE SOCIETY & AMUL`s ABILITY TO CONFRONT

Key Roadblocks AMUL
Lack of spontaneity Organisation structure added up by monetary policies of AMUL attracts

public to join firm & contribute for growth

Lack of funds With a revenue of 38000 crs, AMUL is able to manage funds within

company and able to serve substantial profit with farmers

Neglecting the demand aspect Organisation culture of AMUL has high business ethics and they are

meeting demand on daily basis with 3 tier model

Regional disparities Via three tier model village, district and state levels are interconnected

Lack of co-operation on the Against the general cooperative movements where the willing

part of the people cooperation from people`s part hinders the growth of cooperative

movement, AMUL has high level of integrity and work involvement of

peoples with defined process

Horizontal and vertical linkage In general cooperative societies linkages, though, structurally established,

have not yet operationally become effective. But AMUL has efficiently

delivered the effectiveness of organisation concepts

Exploitation In general, agricultural cooperative societies, middlemen exploits the

situation. In case of AMUL, they exploits market by enhancing growth in

their domain via latest technology and new products

Management issues The cooperatives suffer from nepotism, favouritism and partiality in

general, but AMUL organisation shares revenue as well as other benefits

from top to down level staffs. Moreover the presence of multiple villages

representatives in board solve this issue

Political interference The selection of beneficiaries is mostly done on political considerations

commonly. AMUL from 73 yrs able to manage to avoid political

interference
 Portfolio diversification General issue faced by cooperatives is their restrictions to

villages/specific network area. Beating the odds AMUL is now exporting

their product and has pan India presence

5. COOPERATIVE vs. CORPORATE ORGANISATION STRUCTURE (AMUL vs NESTLE)

A cooperative is a legal entity owned by a group of people who come together voluntarily for their mutual

benefit. These people usually join hands to fulfil their common economic, social, or cultural needs, a task

that would be hard to accomplish if one was left to handle it alone. A corporation is a legal entity formed by a

group of people who contribute capital, but it exists as a separate legal entity having its own privileges and

liabilities distinct from those of its members. These members of a corporation are often termed the

shareholders.

Amul is a dairy cooperative in Anand, Gujarat. It is managed by the Gujarat Co-operative Milk Marketing

Federation Ltd. which is jointly owned by 3.6 million milk producers in Gujarat.

The Amul Model or Anand Pattern has a three-tier cooperative structure. First, at the village level there is a

cooperative society. Next at the district level there is a milk union. Finally, at the state level there is a milk

federation. They are all affiliated to each other. Milk is collected at the village dairy society. Milk procurement

and processing is done at the District Milk Union. The marketing of the milk products is done at the State Milk

Federation. So, the farmers own the complete value-chain from the farm to the table of the consumer.
Organizational Structure of Nestlé is Hierarchical. Nestlé is a function-based organization. The tasks are

divided into separate jobs and then these jobs are grouped together under different departments i.e. functional

departmentalization is found in organization. Each major area is kept under the manager who is specialist in

that concerned field and is responsible for all activities, which that department perform