Amul SWOT Analysis. Amul is a milk cooperative that has been a household name in India since its inception in 1946. Over the years, the company has grown to become one of the largest dairy producers in the world, with a reputation for high-quality products and a commitment to sustainability. But what are the strengths, weaknesses, opportunities, and threats facing Amul today, and how can the company leverage this information to stay ahead of the competition?
In this blog post, we will conduct a comprehensive SWOT analysis of Amul. We will explore the company’s strengths, such as its strong brand image and extensive distribution network, as well as its weaknesses, such as its high operational costs. We will also examine the company’s opportunities and threats, including changing consumer preferences and increasing competition from domestic and international players.
By the end of this post, you will have a better understanding of the factors shaping Amul’s success and the challenges the company faces in the years ahead. Whether you’re a potential investor, a student of business, or simply interested in the strategies of successful companies, this SWOT analysis will undoubtedly provide valuable insights into one of the most innovative and respected dairy producers in the world. So, let’s dive in and explore the SWOT analysis of Amul.
An Overview of Amul
Amul was founded in 1946 by Verghese Kurian. Its headquarters are in Anand, in the state of Gujarat. The current CEO of Amul is R.S. Sodhi.
Amul is the largest manufacturer of milk and dairy products in India. It is widely considered one of India’s most prominent brands, created to embody the national identity in every sense. The company was founded to protect the interests of Indian consumers and producers.
During that time, POLSON Dairy operated as the largest milk buyer from farmers in the District of Kaira. However, the POLSON establishment began to pursue exploitative practices that led to the formation of AMUL. The dairy manufacturing company has become a native brand in the country since then.
The AMUL acronym stands for Anand Milk Union Limited and is known for starting the “White Revolution” in the country.
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Amul currently processes and gathers different varieties of milk products. It distributes approximately one million liters or more every day in the country. It is the brand that symbolizes the aspirations of Indian farmers.
Fun Fact:
Did you know that in 1976, a movie called ‘Manthan’ was made based on the ‘White Revolution’ started by Amul?
SWOT analysis of Amul
The following is the SWOT analysis of Amul:
Amul’s Strengths: Internal Strategic Factors
- Exceptional Growth: Amul has seen outstanding growth in the past seven years. The company continues its adaptive and evolutionary mechanisms as it has for decades. India has made many investments in its dairy industry and has justified its position. The company is setting its sights on achieving record growth with its INR 50,000 crore target in 2020.
- Large Production Capacity: Amul is a brand managed by the GCMMF (Gujarat Cooperative 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 September 2018, Amul was ranked in the 9th position according to the survey of the IFCN (International Farm Comparison Network).
- Market Leader: Amul has positioned itself as the market leader in India because of the organized ice cream sector, which has a 1/3 market share. The ice cream sector is expected to grow by 30% in the coming years, whereas flavored milk and cheese products have been forecast to grow by above 20%.
- Brand Recall and Equity: Amul has become the favorite of 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 regarding brand recall and equity. Only a handful of milk-based brands are available that have the same public image as Amul in India.
- Best Quality: Amul has been entrusted with a loyal customer base due to its standard, persistent quality production. Amul has maintained its operation with adequate transparency for decades, forming good relationships with the government and the health department. The praise from such entities over its products has only added to its credibility and customer retention.
- Huge Customer Base: Amul has the fantastic quality of transcending the urban demographic and reaching rural areas. This gives it distinctive leverage over its competition as it expands its consumer base and maintains a presence in every corner of the country.
Amul’s Weaknesses: Internal Strategic Factors
- Lawsuits: The brand faced an internal crisis after it chose to advertise its products by disparaging its rival competitors. One of its competitors, HUL (Hindustan Unilever Limited), noticed this promotion, filed a lawsuit against the dairy company, and took it to court. HUL won its case at the Bombay High Court in 2017 and demanded that Amul 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 depends on its farming unions and community, whose needs are growing daily. Amul needs an effective mechanism to face these challenges, which is risky given the unpredictability of supply.
- Portfolio Expansion: Amul has diversified its dairy product variety but has yet to experience similar success in its other productions. The best example is its chocolate products, which have yet to reach the same level of success as its ice creams. Amul’s portfolio expansion is crucial for its brand image.
Amul’s Opportunities: External Strategic Factors
- Per capita 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 can explore its reach in international markets. It can access more Asian markets from neighboring countries and other regions and operate accordingly. Its global 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
Amul’s Threats: External Strategic Factors
- 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 benefited Amul’s operations. It has affected its sales and forced them to issue statements, garnering unwanted media attention.
Conclusion
The SWOT analysis of Amul shows that it comes out on top and is a winner in every way. Amul is a national pride for its people, so the company must take a risk and keep its faith to grow in global markets. With enough advertising and promotion, Amul can become popular worldwide.