Vaibhav Verma

Roll No.: F062

SAP ID: 80101180720
vaibhav.verma20@nmims.edu.in

1. For farmers Amul has various programs helping them to increase productivity. It has
established plants to manufacture cattle feed and trained farmers on animal husbandry. It
encourages creation of larger farms with 20-30 cattle.it helps in identification of local banks
willing to offer loans around of 30K. It has proven western dairy wrong by manufacturing
products like milk powder and cheese using buffalo milk.it has helped in increasing farmers
income by passing on approximately 80-85% of revenues to the farmers. Well-being of
farmers and development of rural India was their main motive and not profit earning.

For Consumers it has brought quality at affordable prices. It has brought a sense of
attachment with the brand due to its indigenous value.It was a national brand for customers.

For Society it was a source of new employment opportunities and education. It established
IRMA for leaders and innovators. It is a brand which could be blindly trusted.

2. Cost leadership
• Had a not for profit motive
• Amul retained part of its earnings to meet expenses and shared profit with their farmer
members according to the milk quantity supplied by them
• Extensive distribution networks- Exclusive arrangements with its distribution partners,
such as transporters, warehousing agents, paid them relatively low margin per unit,
keeping distribution costs and prices low.
 • Low advertising costs- Less than 1% of revenue compared to competition (unilever-
14%, Nesle-8 to 12%). Also, it used an ‘Umbrella Brand’ strategy, showcasing all its
products in a single ad
• Efficiency in cash handling- anywhere around $700000 to &900000 is transacted
in cash daily with no leakage whatsoever
Differentiation
• Use of technology, training farmers in Animal Husbandry, artificial Insemination,
Mobile veterinary services, cattle feed production
• 3 tier Cooperative structure- At district level was a union owner by its contributing
cooperative dairy society. Unions purchaased milk from each society, transported it via
tanker one or twice daily to their dairy plants where they processed and packaged value-
added products. Finished goods sold within the district.
• Stringent quality checks- first quality check at each cooperative where the farmer brings
in the milk. Milk is chilled immediately and goes to the nearest plant, entire batch
rechecked for spoilage, final checks when the milk goes to the retailers
• Procurement advantage- Amul passed approx. 80-85% of revenues to the farmers
• Brand Value- Amul’s price served as a benchmark for its competition and new entrants.
The price acted as an entry barrier.
• Amul’s advertisements and sponsorships reflected Indian Roots and values

Focus
• Leadership of Dr Verghese Kurien- He focused on portraying the brand properly.
Bought the prime spots for advertising. Was against running promotions and giving
goods for free.
• No interference from the Governments - apolitical atmosphere inside Amul. “Politics
has to be left at the door when you enter Amul.”

3. Threats
• Local Butter Manufacturers
• Low Fat, Low Cholesterol butters like Nutalite.
• Reduction in consumption by health conscious people.
• Growing prices.

Opportunities
• Tie ups with corporates, hotels, resort chains etc.
• Enter international markets.
• Increase market penetration.
• Concentrate more on chocolate market

4. Depending upon the growth of the dairy industry and growth in GDP ,it’s all sunshine for
the market growth with proper strategizing of entering in the market still unchartered and
Indian middle class growing at unprecedented state , it can surely help it to retain its number
one spot for long. Amul could foray into making more value-added products like Whey
Protein. Whey protein in made from cheese by isolating a particular type of protein from
the mix of proteins it has. Amul can use its existing infrastructure with some modifications
to be ready to produce whey protein. The price point can also act as a stimulant to attract
more semi-urban or rural population as there are not many economical options available.