AMUL CASE STUDY

Presented By Group No.3Anirudha Singh Tomar (1302)

Shailly Choudhary (1317)Shishir Kumar (1318)

Sudarshan Kumar Patel (1320)

Introduction

• Formed in 1946, is a dairy cooperative movement in India.

• A brand name managed by Gujarat Co-operative Milk Marketing Federation(GCMMF)

• Spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world.

• Overseas markets - Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries

• Fresh plans of flooding the markets of Japan & Sri Lanka.

• Dr Verghese Kurien, former chairman of the GCMMF -the man behind the success of Amul.

• Has a 15% market share in the Rs 15,000 crore milk category, and a 37% share in the Rs 900 crore organized ice-cream segment.

Company Overview

The NDDB

• Operation flood(1970-96) –The signature program of NDDB was based on Amul model.

• Aim –to scale up dairy production• Received donation of milk powder and butter oil from

World food program and European Economic Community(EEC).

• Both led to increased sales and spurred capital growth and investment.

• By 2011 ,India became largest producer of milk(121.8mt)• Availabilty of milk -280ml/person• Mission milk-the next revolution

Business Model• The Amul Model of dairy development is a three-tiered structure with the dairy

cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level

VILLAGE LEVEL200 membersCommittee of 8-9 members

District LevelBoard of Directors – 12900 Members (approx)

State FederationMembers are chairpersons of district level Co-operative & Ex-official members.Representative from NDDBRegistrar of Co-operative of the state concerned

Distribution channel

Reasons for Success

success

Robust Supply ChainLow Cost Strategy

Strong Distribution

Network Diverse Product Mix

Technology & e-initiatives

Moving Forward

• Commitment to make available to every corner of the country.

Challenges

• Addressing future demand- with increasing population and income, demand of milk will increase more in future.

• Adressing animal husbandry–to address the lower milk productivity(from the same animals).

• Three-pronged approach –targeting breeding,feeding and disease management.

• Animal infertility(20-30%)-major problem.• Infertility due to deficient feed and fodder.• 20-60% lower milk productivity than global

average.• Amul provides customised feed.• Educate the farmers about efficient ways of

feeding cow.

• Doubling of fodder price due to changing crop pattern, exports.

• Diseased cows-major problem• Amul dispatched veterinarians to train farmers

about animal diseases.Addressing the milk quality issue• For ensuring good quality milk, mobile testing

vans are dispatched.• Installation of bulk chillers in each village .• Addressing the workforce issue

Export Status

• In FY 2013 Amul’s export increased by 47% to Rs. 1.4 billion to Rs. 950 million in 2013

• Dairy product represent 0.8% of total sales• Government banned the export of milk powder to ensure domestic

supply• It also include skimmed milk powder, whole milk powder, dairy whitener,

infant milk product & casein products• Amul regularly export to US, Gulf countries, the Philippines, Japan, China

& Australia• Amul insisted the Government to restrict the export of agri-crop residue,

which is used as a feed for livestock• Cattle feed cost constitute 60% of price of milk• In June 2013, Amul opened the manufacturing operations in the US• It is expectd by Amul MD, that it will quadruple Amul’s US sales

Successful Product Strategy

1. Product Positioning Strategy- Low price Amul Ice - Creams made Kwality walls

life hell. Chocolate milk was launched ‘Amul Kool koko’

2. Product Re-Positioning Strategy- Jaldhara – Narmada Neer

Successful Product Strategy

3. Product Overlap Strategy – Amul Processed Cheese Vs Cheese Spread Nutramul Energy Drink Vs Amul Kool

4. Product Design Strategy – Use of Utterly – Butterly Girl since 1967

5. Product Elimination – Eliminated Jaldhara – bottled water

Successful Product Strategy

6. Diversification Strategy – Dairy ProductsEg: Fresh Milk, Milk Drinks & Desserts, Bread

Spreads, Cheese Products

Non Dairy ProductsEgg: Veg Oils , Snacks, Instant Food

Competitors

Mother Dairy

• Mother Dairy was set up in 1974 under the Operation Flood Programme

• A wholly owned company of the National Dairy Development Board (NDDB)

• Various Mother Dairy Products:

Supply Chain Management

Nestle• Nestlé India’s first production facility, set up in 1961 at Moga (Punjab)

• After by its second plant, set up at Choladi (Tamil Nadu), in 1967.

• Consequently, Nestlé India set up factories in Nanjangud (Karnataka), in 1989.• • Samalkha (Haryana), in 1993. This was succeeded by the commissioning of two

more factories - at Ponda and Bicholim.

• Goa, in 1995 and 1997 respectively.

• The seventh factory was set up at Pantnagar, Uttarakhand, in 2006. The 8th Factory was set up at Tahliwal, Himachal Pradesh, in 2012.

Other MNCs

Conclusion

Currently-Organized sector-60% Increasing of private playersWill gain higher profit & not serve both. (Producers & consumers).

Infusion of FDIAmul not comfortable with supermarketDon’t hurt to customer

People don’t go supermarket for a packet of milkAmul plan on setting up around 100000 small shops (Amul Preferred outlets)

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