Business Environment Sample Project Amul PDF

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BUSINESS ENVIRONMENT ASSIGNMENT On GUJARAT CO-OPERATIVE MILK MARKETING FEDARATION LTD. (AMUL, INDIA)

For Internal Evaluation Submitted to Prof. R. Bagla Prepared by Naina Dholay MBA-HR (2014) (A08) AUUP ROLL NO. A0102312159

Company Overview

India’s Dairy sector is increasing rapidly from the beginning of The White Movement in India. The pathfinder of this movement is the foundation of India’s largest dairy co-operative society in the state of Gujarat on 1st December, 1946 just before the independence of India. The operation initiated on the ground that India is a milk-deficient nation but later on in 1988 it suppressed the production capacity of USA. The story of Amul starts from the backdrop of high demand for milk in Bombay. The major source of income of kaira district in early 40’s, was milk farming and selling. The one and only private milk supplier, at that point of time was Polson Dairy Limited in that area. Hence a monopoly was created and the poor farmers were exploited by the private trader. To take a stand against this unethical practice they collectively approached to Sardar Vallabhbhai Patel (Indian barrister and statesman and one of the leaders on INC) under the leadership of Tribhubandas K. Patel. Sardar Vallabhbhai proposed them to stop supplying milk to the traders and start their own co-operative society and refer them to Shri Moraji Desai (Indian Activist and 4th Prime Minister of India). He then held a concourse and came to a conclusion that the co-operative society will collect the milk first then decide the price according to the quality of the milk. As the government was not reacting to their situation they went on strike for a fortnight and affected the Bombay Milk Scheme. Then with the help of Tribhubandas Patel and Dr. Verghese Kurien (Indian Social Entrepreneur) they lay foundation of Kaira District Co-operative Milk Producers' Union Ltd.in Anand. Farmers started selling their milk to the union. With the help of Dr. H. M. Dalaya’s innovation of forming skim milk powder from buffalo milk was the first time anywhere in the world contributed on a commercial scale. Within the short span it grows within the anand districts the neighboring districts. In 1955 the brand name assigned to the union Amul. It came from the Sanskrit word “Amulya” which means invaluable and reffered to as Anand Milk Union Limited. Later on to grow the strength it comes under GCMMF (Gujarat Co-operative Milk Marketing Foundation) in 1973. After this movement, Dr. Kurien hailed as ‘Milkman of India’. Later on Amul produce and supply its products in the USA as well as Canada and Europe.

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Amul operates under GCMMF; it is India’s largest food products marketing organization and also the largest exporter of Dairy Products. 17 district co-operative milk producer’s unions are the members of this organization.

MAJOR MILESTONES 1946 – The first milk union was established 1946 – District Co-operative Milk Producers’ Union 1955 – The brand name selected “Amul” 1973 – Gujarat Co-operative Milk Marketing Federation established 2013 – Kaira District Co-operative Milk Producers Union Limited known as Amul Dairy Signed an agreement to establish a plant in Waterloo village in New York.

PRODUCT RANGE Amul produces a large range of milk products. These products individually cover the largest market share of dairy industry. 

Amul milk – Amul Gold, Amul Taaza

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Bread Spreads – Amul Butter, Amul Lite, Delicius Table Margarine

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Cheese – Amul Processed Cheese, Amul Emmental Cheese, Amul Gouda Cheese, Pizza

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Mozarella Cheese,

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UHT Milk – Amul Gold Milk, Amul Taaza, Amul Calci, Amul Lite

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Beverage Range – Amul Kool Flavoured Milk, Amul KoolCafe, Amul Kool Koko, Amul

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Prolife Butter Milk, Amul Prolife Lassee, Amul Kool Lassi, AmulSpiced Buttermilk,

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Natramul energy drink, Amul Stamina Can, Amul Kool Milk Shake

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AmulPRO – Amul Pro

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Ice Cream – Amul Ice Creams, Amul Flaavyo Frozen Yogurt

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Paneer – Malai Paneer , Fresf Paneer

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Dahi – Masti Dahi, Probiotic Dahi,Flaavyo, 3

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Ghee – Amul Ghee, Sagar Ghee, Amul Yello(Cow) ghee,

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Milk Powder – Amul Spray,Amulya, Sagar Akimmed Milk Powder, Sagar Tea Coffee

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Whitener,

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Nutramul - Nutramul

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Mithai Range – Amul Shrikhand, Gulab Jamoon, Amul Basundi, Avsar Ladoo

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Mithai Mate – Mithai Mate

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Chocolates – Fruit “n” Nut Chocolate Congrats Pack, Amul Chocolates, Amul Chocozoo,

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Amul Cooking Chocolate, Rejoice, Amul Wafer Chocolates, Chocolate Syrup,

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Fresh Cream – Amul Fresh Cream

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Pouch Butter Milk – Amul Pouch Butter Milk.

TOTAL MARKET CAPITALIZATION & TURNOVER The parent organization of Amul, GCMMF write-up 85% market share in butter market, 75% in cheese share market, 63% in infant milk in 2011-12. In the year 2012-13 the group turnover is rupees 19,100 crore ($3.2 bl). In 2011-12 the turnover was 11,668 crore. The UHT Milk product exposed growth by 53%, cream by 57%, milk beverages by 27% and ghee of 31% collectively with Amul and Sagar. In future Amul aimed to grow to 30000 crore which is the jump of three fold. In the previous accounting year Amul recorded 83% market share of butter market, 63% of infantry milk, 45% in dairy whitener. In packaged milk market Amul dote on 26% share i.e. 25000 crore. Amul earns revenue of 450 crore from exports, mainly skimmed milk powder. In the last fiscal Amul exports it’s milk products worth rupees 140 crore.

MEMBERS OF AMUL There are 13district co-operative milk producers’ unions who all are members in Amul. Total 15,322 numbers of village societies are there. There are 750 employees of marketing arm but the real pool consists of 3 million milk producers.

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MANAGEMENT TEAM OF AMUL The Managing Director of Amul Dairy is R S Sodhi. The first Chairman was Dr. Verghese Kurien. For the selection of the Chairman now there is a conflict between 11 board members.

COMPANIES HEADQUARTER The headquarter of GCMMF is located in Amul Dairy Road, Anand, Gujarat, India. Zonal offices are at Ahemdabaad, Kolkata, Mumbai, Delhi, and Chennai. Sales offices are in Asansol, Agartala, Bangalore, Boisar, Cochin, Coimbatore, Cuttack, Dhaarwad, Dimapur almost all over the India. Overseas offices are at Dubai,UAE.

VISION AND MISSION OF AMUL VISION Amul’s vision is to provide more and more satisfaction to the farmers, employees and distributers. MISSION “We at GCMMF (Gujarat Co-operative milk Marketing Federation) endeavor to satisfy the taste and nutritional requirements of the customers of the world, through excellence in marketing by our committed team. Through co-operative networking, we are committed to offering quality products that provide best value for money.” VALUES 

Customer orientation

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Commitment to producers

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Integrity

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Co-operation

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Excellence

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Leadership

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Quality

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Innovation 5

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Growth orientation

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Belongingness

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Pride in the organization

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Employee satisfaction

CRITICAL EVALUATION The vision statement states about the satisfaction of farmers, employees and distributors. From the vision statement it is derived that the most focus of the co-operative is on their three important pillars 1. Farmers: who supplies the raw materials i.e. the milk from. 2. The employees: they are working for the co-operative society to meet the demand of the customers and to fulfill the needs of the stakeholders. 3. The distributors: they creates link between the demand and the supply of the milk and milk products all over the India and outside India. A vision statement should be clear and crisp, aspirations for future, forward thinking. A vision statement need to inspire and unite the people of the organization and create value for organization. The vision statement of Amul is created through the Three Tier Model of Amul. The model talks about these three pillars of the organization. the unity and the aspirational qualities are there in the vision statement. At the very beginning of the mission statement “WE” word is used that indicated that the actor in the organization represents themselves as a group. They are not individuals and they all jointly moving to fulfill the vision and mission of the organization. They also talks about the customers all over the world. They will reach to satisfy all the customers through nitrous food and excellence. The organization also indicates the excellent marketing and networking abilities of the team. At last they hint about the commitment to deliver the best value for money. It is therefore can be conclude that the organizations mission statement covers all the major areas of the organization, the qualities, expertise and the abilities. The mission statement therefore is appropriate for the biggest co-operative society of India.

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ENVIRONMENTAL ANALYSIS

PESTEL

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P – POLITICAL

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E – ECONOMICAL

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S – SOCIAL

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T – TECHNOLOGICAL

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E- ENVIRONMENTAL

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L - LEGAL

Political Factors: The ground of the Amul is on politics. At the beginning Polson (the sole trader) acted unethical practice of purchasing the milk from the farmers in cheaper rate. Then with the help of political strength the co-operative society is being established. During the course, Indian Political leaders of INC encourage and supported the co-operative society. There were no such political conflict took place till the time with the

Economical Factors: The year when Amul Co-operative society was formed, India was on growing stage. From that point of time, Amul foothold the way of economic development for India. Since then it contributes a major portion of the national income and GDP. The market is still increasing which will inject more money to the economy. As GCMMF also earn revenue from foreign countries like USA, UAE it also supports the economy. Due to globalization and liberalization the consumption pattern and demand for product is increased. India’s rank highest in population so there is a massive market for economic growth.

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Social Factors: The social factors influence most for any organization situated in India. India combines of different types of cultures and languages so the concurrent effect is different types of lifestyle and food habits. Education level is also increasing in India; the demographic composition of India is also a n important factor in social environment. It helps in growing the market.

Technological Factors: India is a developing country and developing in every sector. The aggressive development takes place in technology of India. Amul uses this resource to improve the distribution channel, supply management, enables e-commerce, automation process and value addition.

Environmental Factors: The product is not made out of any unnatural composition. The base of every product of Amul is milk, which is not at all harmful for the environment. So there are no threats for the cooperative society in respect of environmental factors.

Legal Factors: The legal factors which work as opportunity for Amul are PFA act, Trademarks, Industrial Development & Regulation Act. There are threats also like Child Labor (ILO).

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PORTER’S FIVE FORCES MODEL

THREATS OF NEW ENTRANCE Foreign Milk producing organizations and local milk suppliers

BARGAINING POWER OF SUPPLIERS The unions and the members of GCMMF

RIVALRY AMONG COMPETITING FIRMS IN INDUSTRY Nestle, Britannia,

BARGAINING POWER OF BUYERS Large number of buyers

THREATS OF SUBSTITUTE PRODUCTS Local milk suppliers, ice-cream suppliers

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Rivalry Among Competiting Firms in the Industry: There are many competitors of GCMMF in every product ranges. In milk the competitors are Nestle milk, Mother Dairy. In Ice –cream – Kwality Walls Max, Vadilal, Havmor, and Metro Ice-creams. In Ghree – Nestle, Anik Ghee and regional products. In Milk Powder – Nestle, Chocolate – Nestle, Cadbury. In Butter – Britannia, Nestle. In Yogurt – Cocoberry, Danone, Nestle. Threats of New Entrains: There are many competitors in the market of Amul’s products. So any new entry of competitors who provides lesser price or greater quality will be threats. If Nestle will introduce new products or enlarge the product line it will be the threats for Amul. Bargaining Power of Customers: The switch in products like ice creams, curds, milks etc will displays the bargaining power or increases the bargaining power of the customers. Threats of Substitute: There are many substitute products available in the market. Products like ice creams of Kwality Walls Max, Vadilal, Havmor, milk like Nestle and Mother Dairy etc acts as a substitute. The local or regional products are also emerging in growing India. To avoid these Amul have to enrich the quality factor better than these substitutes. Bargaining Power of Suppliers: The only suppliers of raw materials for the entire products of GCMMF are milk and it is collected from the farmers of the unions and the members of the co-operative.

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SWOT ANALYSIS

POSITIVE

I N T E R N A L

NEGATIVE

STRENTHS

WEAKNESSES

Brand Equity Product Image

Lower market share in chocolate segment

Trust Factor

Lesser advertisement

High Quality

Product failure

Affordable Pricing Large employment

E X T E R N A L

OPPORTUNITIES

THREATS

Value Addition

Aggressive Competition

Product Development

Product Imitation

Targeting new segments

New Entrance in the market

More Export Diversification

Localized Suppliers

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Strengths: 1. High Brand Equity and product image 2. Biggest souring of milk and milk based products in India 3. High in quality 4. Trust of Indian people more than 60 years 5. Larger product range and enhanced product lines 6. Maximum market share 7. Affordable price 8. Covers all segments and all class 9. Popular mascot “Amul Girl” 10. Abundant availability of milk 11. Encourages to firm more Weaknesses: 1. 2. 3. 4.

Low market share in chocolate segment ( major share is of Cadbury) Some products fails ( eg. Nutrela ) Limited sales of ice-creams ( most selling ice cream is Kwality walls) Lagging for advertisement and promotions than other brands

Opportunities: 1. 2. 3. 4. 5. 6.

Scope for value addition Product development Diversification in other than milk and milk based products Improve the weak segment or product Reach to the rural areas More export

Threats: 1. Strong competitors ( e.g. Nestle, Cadbury, Mother Dairy, Britannia) 2. Ice-cream sector is not improved with competition with other competitors (e.g. Kwality Walls) 3. Economic slowdown and inflation 4. Disease regarding cows and buffalos

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