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CASE ANALYSIS OF AMUL
A Report submitted in partial fulfillment of the requirements for the degree of
Master of Business Administration
Under the Guidance of
By
GROUP- 7
Institute of Management
Christ University, Bangalore
SEPTEMBER 2017
Introduction:
India is the worlds largest producer and consumer of Milk and Milk products. It accounts for
18% -20% of the average households food bill.
Amul is an Indian brand and a major producer of Diary based food products. It was founded in
1946, 8 months before Indian Independence. The brand is closely intertwined with the History of
India. Amul was the result of a revolt against the then monopolistic Polson diary, by Indian
farmers who were coerced into selling their produce at a very low price. The government gave
the farmers freedom to form their own cooperative, and thus the Kaira Union began pasteurizing
milk, in June 1948. However, it was only after the introduction of Dr Verghese Kurien, in 1949
that the project gained immense momentum, as he started to believe in the cause and empowered
the farmers. By 1953 the Union was collecting over 20,000 litres of milk per day. Between 1955
and 1960 they began diversifying their product range under the brand name Amul, which was
derived from the Sanskrit word for priceless and symbolized the pride of Indian culture and
could be utilized as an acronym for (Anand Milk Union Limited). Along with this brand name
and the Amul Girl as their mascot they achieved a lot of success from the 1960s that propelled
the organization to great heights. As of 2013 Amuls 3.2 million farmers were producing an
average of 12.8 million litres of milk per day, processed at 49 dairy plants by 16 district member
unions and established 7000 parlors.
Problem Identification:
Marketing Problem:
Increasing Cost of Milk Procurements from Farmers (68% Increase over past 4 years)
Consistency in Quantity of Yield Procured Seasonal Fluctuations
Quality of Milk Yield - Fodder/Feed Quality Issues
Geographical Problems:
Work-Force Problems:
Monetary Problems:
STRENGTHS WEAKNESSES
High Quality of Products Non-Profit Motive
Consumer Trust Value for Money Lack of Capital for Investment
Products Inability to increase production capacity
Heritage linked with History of India Fluctuating Seasonal Yield
Cow to Consumer Distribution Chain Low Advertising Budget
Distinct Distribution Channel - FROZEN, Not as appealing to the modern youths of
FRESH, CHILLED, AMBIENT India
Exclusive Transportation network and
Distribution Partners
Diversified Products and Product Mix
Technology aided Advanced
Manufacturing Technology, Artificial
Insemination etc.,
Competitive Edge over Pricing
Marketing Expertise from IRMA
Differential Pricing for Rural and Urban
areas
OPPORTUNITIES TREATS
Foreign Exports FDI has given way to Large Retail Outlets
Product Portfolio diversification Growing Competition from Multinational
Premium or Niche Product Creation Companies
Regional Competition in other States
Brain Drain of Talented youths from rural
area
Increasing procurement costs of Milk yield
Dwindling rates of Rural farmers who
continue Dairy Farming
Non-availability of proper feed and Disease
control measures for Cows
Potential for conflict if Milk procure
Alternatives Available:
Purchasing or leasing out fragmented lands and providing common space for cattle
rearing
Creating SHGs for women to tend to the cattle on shift basis
Establishing independent milk unions for different regions
Investing in Advanced technology such as artificial insemination to improve yield of
Indian cow variety
Breed cows that are more resilient to Diseases, Temperature etc.,
Acting as a liaison between banks and rural youths, to facilitate loan processing and
encourage entrepreneurship
Increase the product range and compete with niche market product
Focus on Digital Marketing and create an advertising sensation more appealing to the
millennial youths of India
Creating awareness in rural areas regarding government offerings towards better quality
of feed
Persuade farm owners to integrate farm land, explaining the mutual benefits for all parties
Construct new Dairy Farms and manufacturing plants in other states to compete with
regional Competitors like AAVIN and NANDINI
Recommendations:
1. Research into artificial insemination and cross-breeding to create cattle variety that are
less susceptible to diseases with more yield.
2. Revamp the advertising front by shifting from traditional approaches and focusing more
on contemporary trends such as digital marketing which would engage the youth.
Conclusion:
This case study captures the essence of the legacy of Amul of how local farmers came together
to take a stand against a monopoly and succeeded with the help of Verghese Kurien. It also
showcases the challenges and the dillemmas that Mr. R.S Sodhi needs to overcome in order to
maintain the prestige of Amul. There has to be a change in trajectory in order for Amul to
continue to sustain growth and capture new customers while retaining their existing client base.
The interests of farmers must be protected as they survival depends on them. Thus a two-fold
approach to appeal to both the internal as well as external stakeholders must be adopted.