SWOT ANALYSIS OF AMUL

MARKETING MANAGEMENT CASE STUDY

BY
M.GAYATHRI 5.2.2000(MBA 1YEAR)

INTRODUCTION

Amul is a milk co-operative founded by Mr. Verghese Kurian in 1946. The company has its

headquarters in Anand, Gujarat. Amul is an acronym for “Anand Milk Union Limited”, and Mr

Verghese Kurian, the founder of Amul, is also referred to as the father of the white revolution in

India.

Amul is the largest Indian milk and dairy products manufacturer and is considered as one of the

most well recognized and iconic brands in the country. The company was incorporated to

protect the interest of the consumers and the milk producers in India.

Presently, Amul produces and gathers milk and milk products and distributes more than one

million liters of milk every day.

SWOT ANALYSIS

SWOT Analysis is a strategic analysis framework used to evaluate the competitive position of

the company for developing strategic plans.

SWOT stands for Strengths, Weaknesses, Opportunity and Threats of the company to assess

the internal and external factors, along with present and future potential.
parent Company Amul (Anand Milk Union Limited)

Category Food Products

Sector Food & Beverages

Tagline/ Slogan The taste of India; Utterly butterly delicious Amul

USP India’s most trusted and popular dairy products’

brand

AMUL PRODUCTS PORTFOLIO

1.Amul Butter

2.Amul Cheese

3.Amul Chocolates

4.Amul Ice Cream

5.Amul Kool
 STRENGTHS OF AMUL

Strengths are always internal to a company. A strength is something that comes from

within the company, from its people, its process or the resources employed by it. Here

are the strengths from the SWOT Analysis of Amul.

1. Investment in Technology

Amul has experienced exponential growth in the last few decades. The company is

continually investing in adaptive and revolutionary technologies within the dairy industry.

The company is targeting a turnover of Rs. 50,000 crore in the fiscal year 2020.

2. Production Capacity

Amul is one of the largest manufacturers of milk and dairy products in the world. The

company is managed by the Gujarat Cooperative Milk Marketing Federation Limited,

which is a dairy producers cooperative which supplies the company with almost 18

million liters of milk daily.

3. Market Share

Amul has transformed itself into the market leader of milk and dairy products in the

country. For instance, Amul has a market share of 33 per cent in the organised ice

cream industry. The ice cream market is expected to grow by 30 per cent.
Amul has expanded its ice cream product and business portfolio by opening standalone

Amul ice cream stores all over the country.

Furthermore, the flavoured milk industry in India is also expected to grow by 20 per

cent, and once again, Amul is a market leader in flavoured milk in India.

4. Strong Brand Value

Amul is one of the most recognizable and valuable brands in India. The Amul girl, the

company’s mascot which features on its advertisements is one of the oldest and most

iconic brand mascots which Amul uses even today.

None of the milk or dairy products brands in India has come close to the public image or

brand value which Amul enjoys in the Indian market.

5. Quality

One of the primary reasons for Amul being one of the most trusted brands in Indian and

having a strong and loyal consumer base is its quality. Amul has never faced any

significant issues pertaining to its quality within the Indian market. The company has

also maintained transparency concerning its quality control practices.

Amul maintains excellent relationships with the health department and government

agencies. Validation from these authorities further develops trust within the minds of the

consumers about the quality of Amul’s products.

5. Large Consumer Base

The company has a large consumer base which spreads across the urban and rural

regions of the country. This wide-reaching consumer base has allowed the company to

maintain distinct leverage over its competitors

Weaknesses of Amul

Just like the strengths, weaknesses are also internal to the brand or the company. You

could see it as a lack of certain aspects in the business that makes it vulnerable.

Sometimes, certain strengths bring with them certain weaknesses. Examples of that is,

however, the matter of another blog post.

So, here are the weaknesses from the SWOT Analysis of Amul.

1. High Operational Cost

Amul has a high operational cost due to its massive size and complex structure. This

can become problematic for the company if the company experiences a fall in demand.

The company also heavily depends on the dairy unions and communities for its supply

of milk. As the needs of the dairy community are changing with them demanding higher

prices for their produce.

These issues can add up to the operational cost of the company and lower its profit

margins.

2. Lack of Success in Certain Areas of Portfolio Expansion

Amul has expanded its product portfolio to add products such as butter, ghee,

buttermilk, flavored milk, ice cream, chocolates, cheese, creams, sweets and more.

However, not every product of Amul within its portfolio has tasted the same amount of

success.

For instance, Amul’s chocolates have not been able to replicate the success of its ice

cream brands. Amul chocolates have a tiny market share in the chocolates, sweets and

confectionery market in India.

3. Frequent Legal Issues

The company has faced legal issues in the recent past wherein Amul chose to advertise

its products while disparaging the brand and products of its rivals. This led to Hindustan

Unilever filing a lawsuit against Amul in the Bombay High Court.

In 2017, The Bombay High Court passed a verdict in favour of Hindustan Unilever. This

caused the company a lot of embarrassment and has also contributed to tarnishing the

public image of the company.

Opportunities for Amul

In the SWOT Analysis, Opportunities are the points that can be and should be

converted to the strengths of the company. In the case of the SWOT Analysis of Amul, I

have listed below the opportunities that can be worked on by Amul.

1. High per capita Milk consumption

India is a high milk consuming nation with milk and dairy products being an essential

component of the Indian diet. According to research, Indians consume almost 100 liters

of milk per annum.

India has a billion plus population which is only increasing. This growth in population

and high milk consumption opens up opportunities for Amul to expand its production

capacities and acquire new consumers.

2. International Expansion

Amul can serve global markets. The brand can expand into overseas markets such as

the Middle-East and the Asian markets by aggressively targeting Indian expats living in

these countries. Amul can organically broaden its international presence and consumer

base.

3. Expansion of Product Portfolio

Amul can invest in research and development or adopt a mergers and acquisition

strategy to expand its product line. Amul has an extensive distribution network which

can be used to sell its new products into the market, and the substantial brand value

and trust of the consumers will also enable easier acceptance from the consumers.

Threats for Amul

The way a company should take care of the threats is by working on its strengths to

mitigate the effects of threats. Some organisations who are in a niche, niche down
further to mitigate the risks of a competitive environment. I have listed below some of

the Threats for Amul.

1. Increasing Competition

Amul is facing increasing competition in the milk and dairy products sector from brands

such as Mother Dairy, Aavin, Kwality Ltd, Nandini Dairy, HUL and other local players.

Amul is also facing increasing competition within the ice cream sector from Kwality

Walls, Baskin Robbins, Havmor, London Dairy and other domestic brands

2. Growing trend of Veganism in India

Many people in India are turning towards veganism, which implies that these people do

not consume dairy or dairy products. This can impact the demand for Amul’s milk and

dairy products if the popularity of veganism increases and spreads across different parts

of the country.

Conclusion

The SWOT Analysis of Amul enables us to understand how Amul has transformed from

a dairy cooperative to one of the most valuable and trusted brands in the country. The

brand entices a sense of national pride among the consumers, and this brand image

can be further exploited to enter overseas markets.

The company can achieve a dominant global position by maintaining its quality

standards, investing in advertising and promotions and localizing products as per the
taste of the international markets. Amul has the potential to replicate its success all over

the world.