Strength 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.

 Exceptional Growth – Amul has seen exceptional growth in the

past seven years. The company continues its adaptive and
evolutionary mechanism as it has done for decades. India has
placed many investments in its dairy industry, and the company
has justified its position. Currently, the company is setting its sight
to achieve record growth with its INR 50,000 crores target in 2020.

Amul has witnessed outstanding growth in the past few years. Amul has
adaptive and revolutionary tools as it has done for decades. India has
placed many investments in its dairy industry, and the company has
sustained its position.

1. Large Production Capacity – Amul is a brand managed by the

GCMMF (Gujarat Co-operative Milk Marketing Federation Ltd), a
cooperative body that provides about 17.7 million liters of milk per day.
Its production capacity led the GCMMF to join the ranks of the top dairy
organizations in the world. In Sept of 2018, Amul was ranked at
the 9th position according to the survey of the IFCN (International Farm
Comparison Network).

Amul is operated by the GCMMF, a cooperative body that produces

over 20 to 30 million liters of milk each day. Amul’s production
capacity is the largest among all others in the world.

2. Market Leader – Amul has positioned itself as the market leader in

India because of the organized ice cream sector which has a 1/3 rd market
share in the country. The ice cream sector is expected to grow by
30% in the coming years, whereas its flavored milk and cheese products
have been forecasted to grow above 20%.Amul has captured a huge
market share in India because of its well-organized ice cream sector,
 with over 1/3rd of its market share and counting. Similarly, Amul’s
other products are also expected to grow in the near future.
3. Brand Recall and Equity – Amul has become the favorite for many
Indians because of its genius Amul baby campaign that evokes beauty
and emotion on every occasion. It has cemented Amul’s brand
recognition especially when it comes to brand recall and equity. There
are only a handful of milk-based brands available that have the same
public image like Amul in India.

4. Best Quality – Amul has been entrusted with a strong and loyal
customer base owing to its standard persistent quality production. Amul
has maintained its operation with adequate transparency for decades
forming a good relationship with the government and the health
department. The appraisal from such entities over its products has only
added to its credibility and customer retention.
5. Huge Customer Base – Amul has the amazing quality of transcending
the urban demographic and reaching the rural areas. This allows it to
have distinctive leverage over its competition as it expands its consumer
base and maintains a presence in every corner of the country.

6. Cooperative model: Amul’s cooperative model empowers small-scale

farmers by pooling their resources and providing a platform to market
their products collectively. This approach helps ensure a stable
livelihood for millions of farmers and enables Amul to maintain a
consistent supply of raw materials.
7. Strong brand recognition: Amul has established itself as a trusted and
reliable brand. Its brand recognition extends beyond India, reaching
consumers in more than 50 countries worldwide.
8. Diverse product portfolio: Amul offers a wide range of dairy products
catering to various consumer preferences and needs. This diversified
product portfolio allows the company to tap into different market
segments and reduces its dependency on a single product line.
9. Extensive distribution network: Amul’s vast distribution network
ensures its products are easily accessible to consumers across India,
even in remote areas. This network helps the company maintain a
strong presence in the market and provides a competitive advantage
over other dairy players.
10. Focus on quality and innovation: Amul invests heavily in research
and development to maintain high-quality standards and develop new
products. The company’s commitment to innovation has allowed it to
stay ahead of its competitors and continuously expand its product
offerings.
11. Economies of scale: Amul’s large scale of operations enables it to
achieve cost efficiencies, allowing it to offer its products at
competitive prices. This pricing advantage makes Amul’s products
more accessible to a broader consumer base.
12. Proven success in rural development: Amul’s business model has
been instrumental in transforming the socio-economic landscape of
rural India. The company has successfully uplifted millions of
farmers’ lives and contributed to overall rural development.
13. Adoption of digital technologies: Amul has embraced digital
transformation to improve its supply chain management, customer
engagement, and e-commerce operations. The company can further
streamline its processes and expand its reach by leveraging
technology.

Weakness of amul
Just like the strengths, weaknesses are also internal to the brand or
the company. You could see it as 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 pos
 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 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.
 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.
 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.
 Lawsuits – The brand faced an internal crisis after it chose to
advertise its products by disparaging its rival competitors. This
 promotion did not go unnoticed by one of its competitors HUL
(Hindustan Unilever Limited) which filed a lawsuit against the
dairy company and took it to court. HUL won its lawsuit at the
Bombay High Court in 2017 and demanded that Amul should stop
its condescending advertising immediately. It has tarnished Amul’s
image as an elitist, utilizing arrogant and unfair methods to beat its
competition.
 Operational Cost – The operational cost for Amul is enormous
thanks to its massive structure. This becomes a liability for the
company as Amul experiences multiple pricing changes and is
dependent on its farming unions and community whose needs are
growing every day. Amul does not have an effective mechanism in
place to face these challenges which is risky given the
unpredictability of supply.
 Portfolio Expansion – Amul has diversified its dairy products
variety, but it has not experienced similar success in its other
productions. The best example is its chocolate products that have
not reached the same level of success as its ice creams.
Amul’s portfolio expansion is crucial for its brand image.
 Dependence on the cooperative model: Amul’s business success
largely relies on the cooperative model, which requires effective
collaboration and coordination among millions of farmers. Any
disruption in this model, such as internal conflicts or
mismanagement, could affect the company’s supply chain and
overall performance.
 Limited presence in non-dairy segments: Although Amul has a
diverse product portfolio within the dairy industry, its presence in
non-dairy segments is relatively limited. This may restrict the
company’s growth potential, particularly in markets where non-
dairy products are in high demand.
 Intense competition: Amul faces stiff competition from both local
and international dairy brands. The increasing number of players in
the Indian dairy industry could impact Amul’s market share and
growth prospects.
  Perishable nature of products: Dairy products are perishable,
which means they have a limited shelf life. This requires Amul to
maintain an efficient supply chain and distribution network to
ensure that products reach consumers on time, which can be
challenging and resource-intensive.
 Vulnerability to fluctuations in raw material prices : Amul’s
operations rely on the steady supply and pricing of raw materials,
particularly milk. Fluctuations in milk prices due to seasonal
variations or changing production costs can affect the company’s
profitability.
 Regulatory challenges: The dairy industry in India is subject to
stringent regulations, including those related to food safety, animal
health, and environmental sustainability. Changes in regulatory
requirements can impose additional costs and challenges for
Amul’s business operations.
 Reliance on the Indian market: While Amul has expanded its
presence to over 50 countries, its core market remains India. This
reliance on a single market can make the company vulnerable to
local economic and political factors affecting consumer demand
and purchasing power.

Opportunities of 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.
 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.
 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.
 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.
 Per Capital Milk Consumption – Amul can increase its per
capita milk consumption which is generally 97 liters per year,
much lower than that of countries like the USA or the EU. The
demand for milk products continues to grow, and Amul has
enough resources to capitalize on this demand.
 International Markets – Amul has the capacity to explore its
reach in the international markets. It can access more Asian
markets from neighboring countries to other regions and operate
accordingly. Its international exports will increase their margins
and turnovers rapidly.
 Chocolate Production – Amul can invest generously in its
chocolate production and thrive in the chocolate selling business.
With adequate advertising, it can become its greatest
 Expanding into non-dairy segments: Amul can diversify its product
portfolio by exploring non-dairy alternatives, such as plant-based
 milk, vegan cheese, and other products that cater to the growing
demand for healthier and more sustainable food options.
 Targeting health-conscious consumers: With increasing consumer
awareness about health and nutrition, Amul can tap into this
market by offering functional benefits, such as fortified milk,
probiotic yogurt, and low-fat dairy options.
 Growing demand for value-added dairy products: Amul can
capitalize on the rising demand for value-added dairy products,
such as cheese, yogurt, and flavored milk, by expanding its product
range and enhancing its marketing efforts to target new consumer
segments.
 Leveraging e-commerce platforms: Amul can further expand its
reach by strengthening its presence on e-commerce platforms and
offering online-exclusive products and promotions. This will
enable the company to reach a broader customer base and cater to
the growing trend of online shopping.
 Expanding international presence: Amul can expand its presence
in global markets, particularly in regions with a large Indian
diaspora, by establishing local production facilities or forming
strategic partnerships with local distributors and retailers.
 Investing in research and development: By investing in R&D,
Amul can develop innovative products and packaging solutions
that cater to changing consumer preferences and address emerging
market trends, such as sustainability and environmentally-friendly
packaging.
 Strengthening farmer support and training programs: Amul can
further enhance its cooperative model by investing in capacity-
building programs for farmers, providing them with training,
resources, and support to improve their productivity, animal
welfare, and environmental sustainability practices.
 Collaborations and acquisitions: Amul can explore opportunities
to collaborate with or acquire other companies in the food and
beverage industry, enabling it to diversify its product offerings,
 enter new markets, and gain access to additional resources and
expertise.

Threats of 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.

 Increasing Competition
 Amul is facing increasing competition in milk and dairy products
sector from brands such as Mother Dairy, Aavin, Kwality Ltd,
Nadini Dairy, HUL and other local players. Amul is also facing
increasing competition within the ice cream sector from Kwality
Walls, Baskin Robins, Havmor, London Dairy and other domestic
brands
 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.
 Increasing Competition – Amul increasingly faces fierce
competition in the Ice Cream sector. More and more companies
and brands both local and foreign are invading its markets and
overtaking its sales. Competitors like Kwality Walls, Mother
Dairy, Baskin Robbins, London dairy, and Havmor are a few
names that directly threaten its business.
 Negative Media Coverage – Negative media coverage has not
been beneficial for Amul’s operations. It has affected its sales and
 forced them to issue statements garnering unwanted media
attention.
 Intense competition: The dairy industry is highly competitive, with
both local and international players vying for market share.
Increased competition can lead to price wars, reduced margins, and
loss of market share for Amul.
 Changing consumer preferences: With growing health awareness
and increasing demand for non-dairy alternatives, Amul may face
challenges in retaining its market share if it cannot adapt to these
changing consumer preferences and develop new products
accordingly.
 Fluctuations in raw material prices: Amul’s operations rely
heavily on the availability and pricing of raw materials,
particularly milk. Volatility in milk prices due to climate change,
animal diseases, or production costs can negatively impact the
company’s profitability.
 Regulatory challenges: The dairy industry is subject to stringent
regulations, including those related to food safety, animal health,
and environmental sustainability. Any changes in regulatory
requirements can impose additional costs and challenges for
Amul’s business operations.
 Supply chain disruptions: Amul’s supply chain is vulnerable to
disruptions caused by factors such as natural disasters, political
unrest, or transportation issues. Such disturbances can lead to
shortages of raw materials or delays in product delivery, which can
adversely affect the company’s operations and reputation.
 Quality control issues: Maintaining consistent product quality is
crucial for Amul’s brand reputation and customer loyalty. Any
lapses in quality control can result in product recalls or damage to
the company’s brand image, which can have long-term
consequences.
 Climate change and environmental concerns: Climate change and
its associated impacts, such as water scarcity and extreme weather
events, can affect the dairy industry by disrupting milk production
 and supply. Amul must also address growing concerns about the
environmental footprint of the dairy industry, including issues
related to greenhouse gas emissions, water usage, and waste
management.

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.