Competitive profile matrix

Critical success factors Weight Amul Nestle Britannia

Rating Score Rating Score Rating Score

Product quality 0.15 4 0.60 4 0.60 3 0.45

Price competitiveness
product range
Market share
Global expansion
Advertising
Financial position
Value chain and logistics
0.15 4 0.60 2 0.30 2 0.30
0 2 0.10 4 0.20 3 0.15
0.05 4 0.40 3 0.30 4 0.40
0.10 3 0.30 4 0.40 3 0.30
0.10 4 0.40 3 0.30 3 0.30
0.05 3 0.15 4 0.20 3 0.15
0.10 4 0.40 2 0.20 2 0.20

Production capacity and 0.10 4 0.40 2 0.20 2 0.20

sustainable production
practices
Organisation structure 0.05 4 0.20 3 0.15 3 0.15
Research and 0.05 3 0.15 4 0.20 3 0.15
development
Total 1.00 3.70 3.05 2.75

A brief explanation of the different key success factors is given below:

1. Product quality
Amul’s major strength is it’s ability to deliver high quality products at low rates. A case in point is
the packaged milk product. Unlike other domestic and international players, Amul provides fresh
packaged milk all year round instead of adding milk powder for recombination during the lean
season.

2. Price Competiveness
Amul has adopted a low cost price strategy to make it’s products affordable and attractive to
consumers by guaranteeing them value for money. A comparison of prices for a 400 gram dahi
product:
Amul Rs 32
Nestle Rs 40
Britannia Rs 40
*prices as on 09-dec-2012

3. Product Range
Amul has a product range of 85 items. The products width is 17. Some lines are: bread spreads ,
cheese, dessert, health drink, milk drinks, powder milk and fresh milk. Nestle on the other hand has
over 8000 brands of which some are not dairy products. Britannia’s product lines include biscuits ,
cakes , cheese, and other dairy products.

4. Market Share
Amul is no1 in certain product sales such as butter (85% market share), milk powder (40% market
share) and cheese (50% market share) where as nestle leads in categories like chocolates and
britannia in biscuits.

5. Global expansion
Unlike Nestle, Amul is yet to establish itself as a truly global dairy and dairy products firm. It sells
its products in the UAE, USA , UK , Singapore and so on. It is the largest exporter of dairy products
from India and it’s exports include full cream milk powder, ghee, cheese, butter, paneer etc.

6. Advertising
Amul spends less than 1% of its revenues on advertising as against 20 or more percent by it’s
competitors.

7. Financial Position
Nestle is the world’s largest food company in terms of revenues with the latest figures showing
8.9% increase in profits over last year. Amul has revenues of around Rs 11670 crore. Britannia’s
latest figures indicate that it has got a net profit of 18.8% to Rs 134 crore and revenues to tune of
Rs 4670 crores.

8. Value chain and logistics

Amul scores a very big advantage over it’s rivals in the fact that it is a co operative. Amul passes on
as much as 85% of it’s total revenues to farmers attracting its suppliers. Regarding distribution,
Amul has 4000 distributors and is in the process of creating 30 super distributors to cover 8 states.

9. Production capacity and sustainable production practices

Amul is proposing to add to it’s areas of procurement to maintain its leadership position. It has a
proposed budget outlay of Rs. 3000 crores for this purpose. It indulges in sustainable practices like
providing nutritionally balanced animal feed and fertility improvement programmes.

10. Organisation structure

Amul has a very few employees - only 750 to manage a US $ 2.15 billion business. The main focus
is always on benefiting the farmers who supply the milk earning them very high supplier loyalty.
The top executives are always technically qualified persons.

11. Research and Development

While Amul has been investing in R&D and developing new product lines , it does not have the
financial muscle that nestle enjoys.

Overall, the matrix suggests that Amul has many strengths in relation to it’s competitors. Amul does
not have an Indian competitor who is equal in terms of product specialisation or expansion
potential. Most of it’s competition comes from the unorganised sector that covers around 80% of
the Indian dairy industry.