NAME- Prangya Parmita

CLASS- T.Y B.com

DIV- “A”

SEM- 5

SUBJECT- International Economics

TITLE- Case study of Amul

ACADEMIC YEAR- 2021-22

 OBJECTIVES OF THE
ASSIGNMENT
• To study the significance of Amul co-operative
in India.
• To identify the relationship between
organizational design and operational efficiency
of Amul co-operative in India.
• To suggest an action plan for smooth functioning
of Amul co-operative in India.

INTRODUCTION: Meaning and

stages of Globalization

• MEANING

Globalization is the process by which the world,

previously isolated through physical and technological
distance, becomes increasingly interconnected. It is
manifested by the increase in interaction between
peoples around the world that involves the sharing of
ideas, cultures, goods, services and investment.
➢ Four phases of Globalization:
The Great Convergence, there have been four phases of
globalisation in human history; here is a brief summary
(the follow-on blog posts flesh these out). Climate
change launched Phase 1.
• Phase 1: Humanising the globe (300,000 BCE–
10,000 BCE)
Climate change allowed or forced people out of Africa,
and these people followed their food, fanning out across
the globe. Consumption and production were bundled,
but not in fixed locales.
• Phase 2: Localising the global economy (10,000
BCE–1820 CE)
For the first time, agriculture brought the food to the
people who wanted to eat it. If you will, production was
coming to consumption instead of the other way
around. This phase saw the rise of seven ancient
civilisations in what are known today as Iraq, Iran,
Turkey, Egypt, China, India/Pakistan, and Greece/Italy.
For the first time production and consumption were
bundled in particular locations, so it could be called the
'first bundling'.

• Phase 3: Globalising local economies (1820–1990)

The steam revolution and Industrial Revolution meant
goods could be sent efficiently over long distances by
land and sea. Steam thus unleashed spectacular
transportation capabilities that made it economical to
consume things that were made in far-away places.
This was the 'first unbundling' of production and
consumption. It was caused by a steep drop in the cost
of moving goods. But, even as production dispersed
globally, it concentrated locally at the level of factories
and industrial districts.
• Phase 4: Globalising factories (1990–present)

In the fourth stage, the ICT Revolution radically

lowered the cost of moving ideas as well as goods over
long distances. Therefore, it lowered the cost of
coordinating complex activities at distance, which
changed – and continues to change – the nature of
globalisation.

MEANING OF INTERNATIONAL
BUSINESS
International Business refers to the exchange of goods
and services between two parties of different countries.
International Business may be understood as those
business transactions involve crossing of national
boundaries.
 A CASE STUDY OF AMUL

Kiara district milk union limited which was

later named to “Amul” (Anand Milk Union
Limited) is an Indian dairy cooperative
society, formed in 1946 at “Anand” district in
the state of Gujarat, India. Amul has spurred
the White Revolution of India which has made
India the largest producer of milk and milk
productions in the world. It is also the world’s
biggest Vegetarian Cheese brand. It belongs to
Food processing (FMCG). Amul India Ltd. is
not listed on NSE. Amul belongs to both
primary and tertiary industry.
 HISTORICAL BACKGROUND OF
AMUL

• Amul’s birth is indelibly linked to the

freedom movement in India.
• The first Amul cooperative was the result
of a farmers.
• Sardar Vallabhbhai Patel vision to
organize farmers.
• The cooperative was further developed
and managed by Dr. Verghese Kurien
(known as the "Father of the White
Revolution" in India) with H. M.
Dalaya. Dalaya's innovation of
making skim milk powder from buffalo
milk was a technological breakthrough
that revolutionized India's organized
dairy industry.
 PRESENCE: NATIONAL
It is a cooperative brand managed by a
cooperative body, the Gujarat Co-operative
Milk Marketing Federation Ltd.
(GCMMF), which today is jointly owned
by 36 lakh (3.6 million) milk producers in
Gujarat, and the apex body of 13 District
Milk Unions, spread across 13,000 villages
of Gujarat.
Kurien, founder-chairman of the GCMMF
for more than 30 years (1973–2006), is
credited with the success of Amul's
marketing. Amul has ventured into
markets overseas.
 PRESENCE: INTERNATIONAL

• Amul has entered overseas markets such

as Mauritius, UAE, USA, Bangladesh,
Australia, China, Singapore, Hongkong
& a few South African Countries.
• It’s bid to enter Japanese market in 1994
but had not succeeded, but now it has
fresh plans of flooding the Japanese
market.
• Amul has demonstrated that if a level
playing field is granted, Indian dairy
products are successful in the global
market. Growth in consumer pack
exports has been creditable and we have
consolidated our exports.
 PRODUCT MIX
Product mix of Amul includes Milk,
Chocolates, Bread Spreads, Cheese,
Cream, Curd, Ghee, Mithai, Ice-Cream,
Paneer, frozen products and Beverages.
NET SALES:
In the financial year 2020, Amul reported a
sales turnover of above 385 billion Indian
rupees compared to about 329 billion
Indian rupees in the previous year in India.
Amul India is one of the largest dairy
companies in the world with an increasing
growth rate since 2011.

PROFIT AFTER TAX:

 CSR INITIATIVES OF AMUL
• Rural Sanitation Campaign
Amul Dairy has launched a novel scheme for total rural
sanitation and set a target for itself whereby not a single
milk producer will attend to nature’s call in the open.
The Dairy with the support of District Rural
Development Agency (DRDA) will provide interest
free loans to its milk producers in Anand and Kheda
districts to set up ‘pucca’ toilet blocks, which will not
only help women milk producers avoid embarrassment
but will also ensure hygiene.
• Amul Scholarships
To encourage outstanding children of farmers in
pursuing higher studies Amul introduced scholarship
schemes in 1992. The children are given scholarships
for pursing Diploma, Graduation, Post-Graduation and
Doctorate. Every year the outstanding children are
identified from the villages and scholarships are
provided to fulfil their dream of achieving academic
excellence.
• Blood Donation
Amul in association with the Indian Red Cross Society
aim to inspire, encourage and initiate humanitarian
services to minimize, alleviate and prevent human
suffering at all times to contribute for “Humanity to
Peace”. Towards this objective Amul initiated blood
donation campaign since 1987. Blood donation camps
are organized regularly in rural areas through Village
Dairy Co-operative Societies. Similarly, camps are
organized in Amul Dairy Campus wherein employees
and their family members join in donating blood.
• Tree Plantation
In 1946, the unfair trade practises of the middle men
brought the farmers of Kaira to unite and fight against
this system which brought Amul into existence. Their
relentless effort in improving their socio-economic
conditions ultimately brought their working as a model
for dairy development programme in our country –
popularly known as Anand Pattern. Replication of
Anand Pattern through Operation Flood programme
helped India to achieve first position in production of
milk in the world.
• Dairy Demonstration Farm
As part of Amul’s continuous effort to improve the
socio-economic conditions and livelihood of dairy
farmers, Amul has come out with various schemes to
increase cattle holding per farmer thereby their income.
A Dairy Demonstration Farm (DDF) has been set up at
Mogar to demonstrate scientific methods of dairy
farming. The project envisages encouraging the farmers
to use high yielding animals and modern aids to
increase milk production.
 SWOT ANALYSIS

➢ Strengths
• It is the largest food brand in India.
• It provides high quality products at low price.
• It is the world’s largest milk brand.
• Annual turnover of US $1504 million.
• Highly Diverse Product mix.
• Robust Distribution Network.
• Successful advertising and marketing campaigns
has enhanced the brand pressure
• Strong network of retail outlets, stalls and
parlours.

➢ Weaknesses
• It has many risks of highly complex supply chain
system.
• It is strongly dependant on weak infrastructure.
• It is in alliance with third parties who do not
belong to the organisation sector.
• Low market share in chocolates segment
for Amul.
• Strong competition from international & domestic
players in the ice cream segment means limited
market share.
➢ Opportunities
• Penetrate International markets.
• Diversify product portfolio to enter new product
categories and expand existing categories like
processed foods, chocolates etc.
• To tap the untapped market, it can increase its
reach in rural markets.
• Rise in purchasing power of Indian people.
• Amul can tie up with hotels, resorts, restaurants
etc.

➢ Threats
• Still competition from MNCs in butter.
• Growing price of milk and milk products.
• Ban on export of milk products.
• Strong competition from international players can
reduce the market share of Amul.
• Economic slowdown and inflation can affect
business.
 AMUL’S MARKETING
STRATEGY
Amul remains in the headlines due to its creative
advertisements, its advertising team is considered as
one of the most creative and active team.
• Pricing Strategy: India is a price sensitive market,
hence, Amul tries to cater to the needs of all the
Indian market segments keeping in mind the wallet
size of its target customers without compromising
with the product quality. Amul deals in daily need
dairy products like milk, butter, cheese, ghee, cream,
ice-cream at comparatively lower prices offered by its
competitors which in return helps Amul to capture
huge market share.
• Segmentation, Targeting, and Positioning Market
strategy of Amul: Amul's target segment is the mass
population, we generally see people of all age groups
and demographics enjoying Amul's dairy products, as
Amul's dairy products are a common product for all.
COMPETITIVE ADVANTAGE IN
THE MARKETING STRATEGY
OF AMUL
Amul carries two major competitive advantages listed
below:
1. Its supply chain: Amul has large number of dairy
suppliers which provides it tremendous strength and
facilitates Amul to produce high volumes by relying
on its supply chain.
2. Its Wide Product portfolio: Amul has a really
wide product line due to which it can run Amul shops
and also maintain its products presence in market,
especially at retail level. Amul's product portfolio
analysis indicates that its Butter and Ice cream are
cash cows for it.
The type of market in which Amul operate is co-
operative society.

➢ National Competitors
• Hindustan Unilever
• Britannia
• Arun ice-creams
• Dinshaw
• Mother dairy
• Kwality walls
• Havmore
➢ International Competitors
• Nestle
• Lactalis
• Hershey’s
• Danone
• Fonterra
• Arla foods
• Saputo
 IMPACT OF COVID-19 ON
INTERNATIONAL BUSINESS
OPERATIONS OF AMUL
Even as the country goes into a lockdown to contain
the coronavirus spread, Gujarat Co-operative Milk
Marketing Federation (GCMMF), popularly known as
Amul, is facing glitches in areas like inter-state
transport and supply of packaging material.
While so far it has not seen any major impact on milk
supplies, the leading dairy co-operative is working with
respective state and central government authorities to
sort out the issues before it begins to impact supply.
Currently, Amul procures 26 million litres of liquid
milk a day of which 21 million litres is from Gujarat
and rest from other states such as Maharashtra,
Rajasthan, Uttar Pradesh and Madhya Pradesh. While
the dairy co-operative has been able to keep up with its
average daily liquid milk sales of 15 million litres of
which 6.5 million litres are sold in Gujarat and rest in
other states, Amul might face issues in supplementary
services.
In terms of transport, Amul is also facing issues in
supply of ingredients for cattle feed. While some of the
ingredients are available within Gujarat, Amul's cattle
feed plants source raw materials like rice bran, corn,
millet, and molasses from other states like Punjab,
Haryana and Rajasthan.
Another issue that could hamper Amul's supplies is
packaging material. "No factory gives more than a
fortnight of packaging material. They should also be
allowed to operate and their workers should be provided
free movement so that milk and food items' packaging
supplies do not take a hit."
 CONCLUSION

• Amul has risen from Indian soil and will

remains Indian in every sense.
• There is high scope in the low-priced
segment as also in the other categories.
• There are a significant number of retailers
who are currently stocking more than two
brands.
• Amul has the opportunity to capture the
more evolved young adults and children who
are open to new products provided they meet
their expectations.
• Even though growing in time and on scale, it
has remained with the smallest producer
members.
• Amul is an example par excellence, of
intervention for rural change.
 BIBLIOGRAPHY

https://voxeu.org/content/long-view-globalisation-short-
part-1-5
https://www.piie.com/microsites/globalization/what-is-
globalization
https://en.wikipedia.org/wiki/Amu
https://giantmarketingstrategies.blogspot.com/2019/09/
marketing-strategy-and-competitor.html
https://www.marketing91.com/top-11-amul-
competitors/
https://www.business-
standard.com/article/companies/covid-19-amul-faces-
glitches-in-inter-state-transport-with-21-day-lockdown-
120032500390_1.html
A-CASE-STUDY-OF-AMUL-COOPERATIVE-IN-
INDIA-IN-RELATION-TO-ORGANIZATIONAL-
DESIGN-AND-OPERATIONAL-EFFICIENCY.pdf
(ijser.org)