Amul strategy presentation ppt
- 1. STRATEGY MANAGEMENT Rahul Balyan – 06 Shashwat Bhair – 09 Manpreet Singh – 30 Saksham Saxena - 49
- 2. About Amul • Formed in1946,is dairy co-operative movement in India. • A brand name managed by Gujarat Co-operative Milk Marketing Federation(GCMMF) • Jointly owned by 2.6 million milk producer in Gujarat. • Spurred the white revolution of India, which has made India the largest producer of milk and milk product in the world. • Overseas market Mauritius, UAE, USA, Bangladesh, Australia. • Dr. Varghese Kurien former chairman of GCMMF is the man behind the success of Amul • The brand name Amul, sourced from the Sanskrit word Amoolya, means priceless.
- 4. SWOT Analysis • Strong Competitors- Hindustan lever, Nestle, Britannia and Local players • Stiff competitions from MNC’s in butter • Growing price of milk and milk products • The yield of India cattle still much lower than other dairy countries. • Risks of highly complex supply chain system • Strong dependency on weak infrastructure • Short self life of its Products • Potential to expand to smaller towns and other geographies • Expand product portfolio to enter new product categories. • Use internet to sell its products • Largest food brand in India • High Quality, Low Price • World's Largest Pouched Milk Brand • Highly Diverse Product Mix • Robust Distribution Network Strength Opportunities ThreatsWeakness
- 5. PEST Analysis POLITICAL: 1. Delicencing of dairy sector(1991) 2. Section 44 of NDDB gives exemption from income tax act 3. 100% FDI allowed 4. Export restrictions ( Milk powder was banned for exports in 2012) 5. Cut in import duties of milk and milk products ECONOMICAL 1. NDDB gives loan at 0% interest rate and also development grants at lower interest rates 2. India high GDP growth rate implies increase in per capita income of people and thus more consumption of food items SOCIAL 1. Lifestyle– Fast food culture carters more demand for icecream, cheese etc 2. Culture– Custom of morning tea, more accustomed to milk and milk products 3. Demographics– growing youth population, more health consciousness and huge children population TECHNOLOGICAL 1. Automation process, technology HACCP & ISO TQM 2. Net enabled kiosks 3. E commerce GIS 4. Innovation in cold chain technology 5. National Dairy research institutes
- 6. Porter’s five forces Model • Mainly the Suppliers are rural milk producers and thus there bargaining power is very low • Although many substitutes in drinking arena when compared with milk are available, the dairy industry enjoys high profitability in case of other dairy products • Presence of multiple competitors as well as local Dudhwallas • Home delivery and freshness of local dairy products from local Dudhwallas make this more complex •Requires high capital investment and difficult to achieve economies of scale. •Access to very complex and well established distribution channel •Customer Loyalty Threat of new Entrants (Low) Bargaining Power of Buyers (High) Bargaining power of Supplier (Low) Threat Of Substitutes (Medium) Rivalry Among Competitors (High) • Large no. of competitors •Local Dudhwallas
- 7. 4 P’s of Amul Product • Tracks consumer needs & their changing lifestyles, & accordingly develops products to suit their needs • Product quality plays a paramount role & so does packaging Pricing • The main USP of Amul brand is its low pricing • The competitive advantage is its “backward integration” strategy, which helps substantially in cost reduction Place • Amul boasts of the largest cold chain network (18000 refrigerators) in India, as compared to any other company • It sells pizzas in rural markets too Promotion • Amul spends very less on its advertising budget, but spends it very effectively • . It has the power of an umbrella brand Amul, which is highly respected brand name & enjoys public trust
- 8. GCMMF Supply Chain Farmers Village Cooperative Societies (with Chilling Units) Village Cooperative Societies (without Chilling Units) Local Restaurants/Other Milk related businesses Milk Sold to Village & Local Residents Milk Processing Union & Warehouses Warehouses Wholesalers/C&S Retailers Home Delivery Contractors CONSUMERS Network Services * Veterinary Services * Animal Husbandry * Animal Feed Factory * Milk Can Producers * Agriculture University * Rural Mgmt Institute * Trucking Chilling Plants CONSUMERS
- 9. Business Model Raw Milk Pasteurization Condensed 1. Ghee 2. Butter 3. Cream Packaged Milk Ice cream Beverages Dried Skimmed Milk Powder
- 10. Adding value to its logistic chain Problems in Procurement— Management of a complex logistics of collection from members spread across wider geographical areas and limitations in delivering the milk within eight hours to the dairy for processing to avoid decay Manual work of weighing the milk at collection points, determining the fat content and calculation of purchase price Developed a Structured system— Job of milk collection outsourced to third-party logistics service suppliers (3PLs) supply chain operations carried out with military-like precision using Information Technology Over 3000 Automatic Milk Collection System Units (AMCUS) installed at village societies. AMCUS helps in collecting 2.8 billion liters of milk from 2.6 million members. Value proposition: “Easy Monitoring and management of collection cycle, reduction in pilferages, reduced human errors, on-the-spot payments to farmers, wastage reduction, transparency of operation and operational integration”. 10
- 11. Value addition to other business areas Distribution Network •47 company owned depots using a network of 3000 dealers to serve 500,000 retailers •A new layer in the distribution channel called a 'super distributor', who operates at district level • e-commerce and e-logistics by GCMMF capable of servicing consumers in more than 125 cities Zero working capital requirement •GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system •Maintaining cash transactions throughout the supply chain and thus minimizes dumping Just in time strategy •Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises •This just-in-time inventory strategy improves dealers' return on investment (ROI) •All GCMMF branches engage in route scheduling and have dedicated vehicle operations.
- 12. Business Strategy Developing demand Limited purchasing power, modest consumption levels A low-cost price strategy products The distribution network Dry and cold warehouse Cash transaction throughout the supply chain JI T improves dealers returns on investments (ROI) Umbrella brand common brand for most product categories Alum's sub-brands , edible oil products - Dhara, mineral water - Jal Dhara brand while fruit drinks - Safal Third party service providers core is milk processing , production of dairy products logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores
- 13. SUCCESS !! Robust Supply Chain Low Cost Strategy Diverse product mix Amul Butter, Ghee, Milk Powder, Cheese, Chocolate, Shrikhand, Ice Cream, Amulspray, Milk, Nutramul And Amulya Strong Distribution network Technologhy And E-Initiatives Key Success Factors
- 14. New Products Existing products Marketing •venture out on new products like Toned milk,Condensed milk that can be used for sweets, Baby food products •There are certain product like Amul basundi, gulab jamoon, chocolates etc which are not as popular as Amul ice cream. Amul must try to understand the cause of this thorough market research and work on improving these products •Though Amul’s hoardings are a huge success, it can penetrate even better in the rural areas by advertising through the media via cable channels and newspapers What Next!!