CORPORATE STRATEGY

Submitted in partial fulfillment of the degree of

MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY:
1.Akilandeshwri S (122071004)
2.Dharshana M (122071026)
3.Gayathri P (122071030)
4.Uthara C M (122071112)
5.Monisha P (122071123)

Under the guidance of

Dr.S.ANJALI DAISY
Assistant Professor,
School of Management,
SASTRA DEEMED TO BE UNIVERSITY,
THANJAVUR,
MAY 2021

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 TABLE OF CONTENTS

S.NO TOPIC P.NO

1 Company Description 3

2 Vission,Mission and Values 4

3 Strategies Followed 5
4 Competitive Profile Matrix 7
5 EFE Matrix 8

6 IFE Matrix 9
7 BCG Matrix 10

8 Space Matrix 11
9 Value Chain Analysis 13
10 Porter’s Five Force Models 13
11 Recommendations 17
12 Conclusion 18

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 COMPANY DISCRIPTION

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is India's

largest food product marketing organization. Its daily milk procurement is
approximately 13 million litres per day from 16,117 village milk cooperative
societies, 17 member unions covering 24 districts, and 3.18 million milk
producer members. It is the apex marketing federation of 13 districts
cooperative milk unions in Gujarat. The products of its member unions are
marketed and distributed under the brand,Amul, which aims to provide
remunerative returns to the farmers and also to serve the interest of consumers
by providing quality products which are good value for money.
AMUL is ranked as the number one brand in India and the top
Dairy brand in the whole of Pacific Asia. It is a brand name managed by an
apex cooperative organization, Gujarat Co-operative Milk Marketing Federation
Ltd. (GCMMF), which today is jointly owned by some 2.6 million milk
producers in Gujarat, India. It is based in Anand town of Gujarat and has been a
sterling example of a co-operative organization’s success in the long term. The
Amul Pattern has established itself as a uniquely appropriate model for rural
development. It holds 25% of the organized sector; that is 30% of the total
milk business in India. Patel was the founder of the cooperative brand, and he
laid the foundation of amul in 1946.The Headquarter of the company is in
Anand, Gujarat, India. AMUL is based in Anand, Gujarat and has been an
example of a co-operative organization's success in the long term. It is one of
the best examples of co-operative achievement in the developing economy.
Amul has spurred the White Revolution of India, which has made India
the largest producer of milk and milk products in the world. It is also the world's
biggest vegetarian cheese brand. Amul is the largest food brand in India and
world's Largest Pouched Milk Brand.Amul Butter, Amul Milk Powder, Amul
Ghee, Amulspray, Amul cheese, Amul chocolates, AmulShrikhand, AmulIce-

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cream, Nutramul, Amul milk, Amulya have made Amul a leading Milk
Products brand in India.

VISION, MISSION &VALUES

VISION:
Amul's Vision is to provide more and more satisfaction to the farmers,
employees and distributors.

MISSION:
Amul's empowered and dedicated workforce is committed to producing
nutritious and safe food of excellence quality to remain the market leader
through the implementation of a quality control system, state-of-the-art
technology, innovation and environmentally friendly operations to delight
customers and dairy producers.

VALUES:
Amul believes in values based upon performance, quality, respect,
integrity and responsibility, honesty, openness and courtesy.
It promotes social, economic and political empowerment through
bringing an end to exploitation of farmers and the benefit have been increased
to the rural producers. It is not a merely profit making organization. It ploughs
back its profits and distributes back to farmers through village societies.
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 STRATEGIES FOLLOWED

a) MARKET DEVELOPMENT OF AMUL

Amul have always stood ahead in the game in terms of market
development. Amul’s market development was successful mainly
because of its excellent marketing strategies. One of the best strategy was
the use of “the Amul girl” mascot. The packets contained a picture of a
girl standing in prayer with one eye closed received an overwhelming
response from the customers. It became a huge success attracting a wide
range of customers.
The brand name ”Amul” gained massive popularity through
advertising, publicity, wide range of products and low price strategy. The
wide range of products attracted all level of customers, from children to
adults. Amul’s advertisements are typically stories that is based around
traditional families. Some of their most popular advertising campaigns
are “HarGharAmulGhar”, a dramatic comedy about childcare,
“HarDostiAmulDosti”, a story about the friendship of 3 adults.
The tagline of Amul was also a very prominent factor contributing
to its success. The tagline says “The Taste of India”. Amul’s
networking, pricing and their commitment to reach every part of India
aptly proved that Amul is the taste of India. Amul is doing this expansion
by increasing their number of stores in rural areas as equally as in urban
areas. They are geographically expanding themselves all around India
from big areas to small towns. They are also expanding globally into the
Middle East and Southeast Asian markets.
Amul has a market share of 90% in terms of butter and 72% in
terms of cheese and 42% in terms of ice creams as of 2020. Amul
continues to grow in the pandemic situation too through their effective
marketing. They have diverted their advertising from entertainment to
news channels, doubling their spending. Such excellent marketing
strategies have helped them grow massively over the years.

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b) PRODUCT DEVELOPMENT OF AMUL
The GCMMF that markets its products under the brand Amulis a
very well renowned for their product development strategies. Amul has
launched many new products as well as improved their existing products
in terms of quality, variety etc. The company has launched many new
flavours and varieties of ice creams such as sugar free ice creams. It
launched Amul cool which largely attracted children thus extending their
target customer group. Amul had already tasted success in many of its
product segments such as butter, cheese, ice cream etc. They further
launched paneer, ghee, bread spreads, beverages etc.
Recently, Amul launched 33 new products in the first four months
of FY 2021. It was a very huge achievement that it’s the highest ever
number of product launches by any firm in a single quarter. Amul
ensured that its products reached a larger parts of population during the
lockdown period through their wide distribution network. Amul took
advantage of the prevalent situation and created market for not only its
core dairy products, but also pushed up a wide variety of FMCG
products.It shows that Amul has a very effective research and
development system that assists the company in the product development.
Thus, Amul continues to flourish with its wide range of products in the
market.
c) RELATED DIVERSIFICATION
Related diversification occurs when a firm moves into a new
industry that has important similarities with the firm's existing industry or
business lines. It does related diversification by expanding into new dairy
products such as healthy ice cream, cooking chocolate, and lassi.
They also diversified the Amul portfolio, offering a range of food
stuffs such as ketchup, jam, ice-cream, confectionaries, cheese, and
shrikhand. Amul had to expand the consumption base of milk-based
products in India. It planned to make its products (butter and cheese) a
part of the regular diet in most households.
d) UNRELATED DIVERSIFICATION
Unrelated diversification is the one where an organisation moves
beyond the confines of its current industry.Amul did their unrelated
diversification through launching products such as energy drink and
pizza parlour chain.They also started producing various confectionary
products for their international market chains.
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 OTHER STRATEGIES

1. COMPETITIVE PROFILE MATRIX (CPM)

The competitive profile matrix (CPM)is a strategic analysis that allows you
to compare your company to your competitors, in such a way as to reveal your
relative strengths and weaknesses. If the company scores a total weighted score
of 2.5 or higher, it means the company is meeting the average standard for
industry performance. Amul has got a score of 3.72, which is higher than 2.5
indicating the above higher standard of performance in the industry.

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 2.EXTERNAL FACTOR EVALUATION (EFE)

External factor evaluation (EFE) matrix is an analytical technique

related to the SWOT analysis. EFE evaluates the external position of the
organisation or its strategic intents. A score of 2.5 or above indicates that the
company’s strategies are well designed to meet the opportunities and threats.
Amul has a score of 3.71 indicating that the company is well equipped and
designed to meet the external opportunities and threats that comes in their way.

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 3.INTERNAL FACTOR EVALUATION(IFE)

Internal factor evaluation (IFE) matrix is a strategic management tool

for auditing or evaluating major strengths and weaknesses in functional areas of
a business. The average score above 2.5 means the company is strong against its
competitors. Amul has a score of 3.8 which indicates that the company is strong
against its competitors.

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 4.BOUSTON CONSULTING GROUP’S
MATRIX(BCG)

The Boston consulting group’s product portfolio matrix (BCG MATRIX)

is designed to help the long term strategic planning, to help a business consider
growth opportunities by reviewing its portfolio of products to decide where to
invest, to discontinue or develop products. It is also known as growth/share
matrix.
• The stars indicate that they are the leaders in business and also require a
heavy investment to maintain its market share. Amul’s ghee, ice creams,
Amulkooland cheese spread can be categorised under stars.
• The question marks indicate that the products will absorb great amount
of cash if the market share remains unchanged or low. Thus investments
should be high. It can either become cash cow or dog. Amul’smithai
mate, mastiandlassi comes under this category.
• The cash cows indicate the products that are the foundations of the
company. They generate more cash than required with low investments.
Amul’s butter, milkandmozzarella cheese come under this category.

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 • The dogs are the cash traps. The potential of these products are low. The
number of dogs should be minimised to prevent losses. Amul’s
chocolates and pizzas come under this category.

5.SPACE MATRIX
Financial Strength (FS):
The Gujarat Cooperative Milk Marketing Federation Ltd, which markets Amul
milk and dairy products, reported a 17% increase in turnover to Rs.38,550crore
S. Parameter Rating
No.
1. Return on Investment 6

2. Working Capital 6

3. Liquidity 3

4. Cash Flow 5

5. Inventory Turnover 5

Average 5
in the year ended March 31. The Amul group’s turnover exceeded Rs.50, 000
crore, which is also 17% higher than last year.
Amul Federation has achieved a Compound Annual Growth Rate (CAGR) of
more than 17% since last 10 years because of higher milk procurement,
continuous expansion in terms of adding new markets, launching of new
products and adding new milk processing capacities.
Environmental Stability (ES):
S. No. Parameter Rating
1. Technological changes -3
2. Demand -2
3. Price range of competing products -1
4. Barriers to entry into market -3
5. Competitive pressure -2
6. Ease of exit from market -5
7. Risk involved in the business -3
Average -2.71

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Competitive Advantage (CA):
S. No. Parameter Rating
1. Market share -1

2. Product Quality -2

3. Customer Loyalty -1

4. Product Life Cycle -1

5. Competition’s Capacity Utilisation -3

6. Technological Knowhow -3

7. Control over suppliers and distributors -1

8. Sustainable practices -1

Average -1.62

Industry Strength (IS):

S. Parameter Rating
No.
1. Profit Potential 6
2. Financial Stability 5
3. Technological Knowhow 4
4. Resource Utilisation 3
5. Ease of entry into the market 3
6. Productivity, Capacity utilisation 2
Average 3.83

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 VALUE CHAIN ANALYSIS

A Value chain is a set of activities that a firm operating in a specific industry

performs in order to deliver a valuable product for the market. Amul also has
a few operating activities that greatly contribute to produce its valuable
products in the market.

Porter's Five Force Model

Porter's Five Forces is a model that identifies and analyses five
competitive forces that shape every industry and helps determine an industry's
weaknesses and strengths. Five Forces analysis is frequently used to identify an
industry's structure to determine corporate strategy. Porter's model can be
applied to any segment of the economy to understand the level of competition
within the industry and enhance a company's long-term profitability. The Five
Forces model is named after Harvard Business School professor, Michael E.
Porter.The five forces are frequently used to measure competition intensity,
attractiveness, and profitability of an industry or market.

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COMPETITIVENESS

Competitive rivalry Amul Butter enjoys a significant market share. It

has share of 79.1% in the domestic market of size $459 million. So as
such, the competition current is not threatening the position of Amul in
the butter industry. But when it comes to low fat butter, Amul is in a battle.
Zydus Wellness’ Nutralite is gaining market share in the low fat, low
cholesterol butter category, a category where Amul has not been able to
establish itself as yet. It has two products in this category, Amul Delicious
and Amullite.

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THREAT OF NEW ENTRANTS

Threat of new entrants is medium. The barriers to entry are low and as
such, there is a probability that some big player might want to enter the
market. That being said, the significant market share that Amul holds means
its position is quite secure. The established distribution network is an
advantage for Amul. The biggest plus for Amulis the supplier base it enjoys. It
has a strong connection with rural milk producers.

SUPPLIER POWER

In the food and beverage industry, Amul Dairy owes the largest share of
market needing greater number of supply chains. In reaction, Amul Dairy has
also been concerned for its suppliers as it believes in long-term relations. As it
is a part of co-operative society this thing runs for the people who are in
agricultural industry especially those who have milk and milk based products as
their source of income and this thing runs mainly on this one. But suppliers here
have limited rights as it is a co-operative society because it is made and run for
the sake of mass and not for individual benefits. But they make sure everyone is
evenly paid.

BUYER POWER

Amul Dairy makes sure to keep its consumers satisfied. This has actually
led Amul Dairy to be one of the devoted company in eyes of its purchasers.
Bargaining power of the suppliers is low. Amul is a co-operative society. It
runs for the benefit of producers of milk and milk products, who serve as the
suppliers. The switching of brands is seen very much in products such as ice
cream, curd, milk powders, and milk additives etc. But it can be viewed less in
liquid milk category.

Milk is a necessary one and hence is a mass product. It has a

considerable share of the rupee spent by an Indian. A study shows that in urban
areas about 36% of monthly per capita expenditure was on food items. Out of
that, around 10% was spent on milk and milk products. Moreover
consumer/buyers are spread around the country and do not have any bargaining
power.

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THREAT OF SUBSTITUTES

Threat of substitutes is high. There is increasing awareness

about the potential health concerns around consumption of certain dairy
products, especially butter. The fact that Amul’s own low fat, low
cholesterol butter variants have not been able to gain significant market
share leaves the door open for other companies to take advantage of
this potential weakness. Also, margarine, cheese spreads, and jams are
being used instead of butter as table spreads and the options in the market
are plenty.

Competitor Analysis

Amul Dairy’s covers a number of the popular customer brands like

Package Kat and Nescafe etc. Its major part of sale remains in North America
making up about 42% of its all sales. In Europe and U.S. the leading major
brand names sold by Amul Dairy in these states have a great respectable share
of market. Amul Dairy had made its annual revenue by 26% boost since of its
increased food and beverages sale specifically in cooking things, ice-cream, and
drinks based upon tea, and frozen food..Amul Dairy attracts regional customers
by its low expense of the item with the regional taste of the items keeping its
first place in the international market. Amul Dairy business has about 280,000
employees and functions in more than 197 nations edging the competitors for
numerous regions. Amul Dairy has actually also lowered its expense of supply
by introducing E-marketing in contrast to its competitors.

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 RECOMMENDATIONS

❖ Create more awareness about the product.

❖ Adopt new marketing strategy to harness rural segment.
❖ Amul can also penetrate even better in the rural areas by advertising
actively through the media viz. Cable channels and newspaper.
Sponsoring more shows on TV, Sports events can be great help.
❖ Amul should increase the commission to agents who are selling products.
Other competitors give good commission and it will help the company to
increase its sales.
❖ For the products like Amulkool,Amul should reuse the bottles to reduce
the expenses.This will help to reduce the price and increase the sales.
❖ Bring out new products for health conscious people (Low Calorie, Sugar
free, etc).
❖ AmulBasundi, GulabJamun and chocolates etc not being very popular.
Amul need to take up thorough market research and work on improving
these products.
❖ Provide reasonable margin to retailers as compared to competitors.
❖ Company should improve the supply chain management.

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 CONCLUSION

AMUL is the one of the fastest growing industries of India. The industry has
revolutionized the Indian diary Sector. It was one of the first successful
cooperative association in India and the market leader in the dairy sector
.Majority of the customers are satisfied with the Amul products because of its
good quality, reputation, and easy availabilities. From the above report it is
observed that Amul has good market share. Amul has shown in all the ways that
Why it is one of the Leading company in the market for dairy products.Amul is
using very good strategy of selling their products. They do have product
diversification i.e. dairy and non-dairy which have advantage of expansion of
network and advantage of each underline objectives. Thus, we conclude that
Amul has good strategy for selling the products .Products are available for all
most all the segment.

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