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Amul SWOT Analysis

Amul SWOT 2024 | SWOT Analysis of Amul

Company: Amul
CEO : R.S Sodhi
Year founded : 1946
Headquarter : Gujarat, India
Number of Employees: 3.6M
Turnover: INR 29,220 Crore

Products & Services: Milk | Butter | Ghee | Cream | Beverages | Traditional Indian Sweets | Chocolates | Paneer | Ice Cream | Cheese | Pizza Cheese | Milk Powder | Yogurt
Competitors: Baskin Robins | Kwality Walls | Vadilal | Havmor | Dinshaws | Arun Ice Cream | Mother Dairy | Britannia | Nestle | London Dairy

Fun Fact:

Did you know that in 1976, a movie called ‘Manthan’ was made based on the ‘White Revolution’ started by Amul?

An Overview of Amul

Amul was founded in 1946 by Verghese Kurian. Its headquarters are in Anand in the state of Gujarat. Current CEO of Amul is R.S. Sodhi.

Amul is the largest manufacturer of milk and dairy products in India. It is widely considered as one of India’s most prominent brands created to embody the national identity in every sense. The company originated to protect the interests of Indian consumers and producers.

During that time POLSON Dairy operated as the largest buyer of milk 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 became 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.

Amul currently processes and gather 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 the Indian farmers

Key Facts about Amul
Key facts about Amul

SWOT Analysis of Amul

The following is the SWOT analysis of Amul:

Amul’s Strengths – Internal Strategic Factors

  1. 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.
  2. 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).
  3. Market Leader – Amul has positioned itself as the market leader in India because of the organized ice cream sector which has a 1/3rd 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%.
  4. 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.
  5. 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.
  6. 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.

Amul’s Weaknesses – Internal Strategic Factors

  1. 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.
  2. 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.
  3. 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.

Amul’s Opportunities – External Strategic Factors

  1. 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.
  2. 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.
  3. 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

  1. 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.
  2. 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.
SWOT analysis of Amul
SWOT analysis of Amul

Conclusion

The SWOT analysis of Amul makes it clear that it stands victorious and emerges as a winner at all fronts. A national pride for its citizens, Amul has to take the plunge and retain confidence in expanding in the global markets. With sufficient advertising and promotions, Amul can achieve worldwide success.

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Share your thoughts and experiences in the comments section below.

Brianna Parker

She is a creative writer, corporate storyteller and global brand consultant, who has a unique combination of a business and creative mindset.

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