Swot Analysis of Amul

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SWOT ANALYSIS OF AMUL

INTRODUCTION
SWOT Analysis of a company is done to realise the strengths, weaknesses,
opportunities and threats of the company. It involves specifying the objective
of the business and identifying internal and external factors that are favourable
and unfavourable to achieve that objective.
Amul is one of the world’s largest producer of dairy products based in
Gujarat, India, founded in 1946 by Verghese Kurian, also known as the father of
the white revolution in India. Headquartered in Anand, Gujarat.
Amul Stands For Anand Milk Union Limited is also known for starting the
white revolution, encouraging local milk farmers to dream. This is what made
them the largest producer of milk products. Amul now expanded in to almost
60 countries in the world. The product portfolio includes milk cheese, butter,
ice cream, etc.
Doing the SWOT analysis of amul, we can see:
STRENGTHS
• Large Customer Base
Amul provides quality products and it helped the cooperative society to attract
both rural and urban demographic. It gives the company a unique competitive
edge over competitors. That’s how the brand has created a large database of
customers in various markets across India.
• Quality Products
Amul is trusted by millions of people around the world for its high-quality
products. Amul has maintained its operation with fair transparency for decades,
which helps create a good relationship with the government and the health
department. The estimate from such entities over its products has only added
to its credibility and customer retention.
• Recognized Brand
Amul is a famous and well-recognized brand in India because of the creative
baby promotional campaign. It appeals to the emotions of the customers. When
customers are emotionally attached to a certain brand, then they remember the
brand name while shopping. Only a limited number of brands have achieved
that status.
• Market Leader
According to an estimate, the growth of ice cream and milk-based products of
Amul has increased more than 30% and 20% respectively for the past year. It
has allowed the company to achieve over 1/3rd ice cream market share in the
Indian market.
• High Production Capacity
According to a study conducted by International Farm Comparison Network
(IFCN), Amul falls at the 8th position of the world’s top 20 dairy processing
companies. The cooperative brand has a milk production capacity of
approximately over 20 million litres daily.
• High Growth Rate
Amul has been growing consistently for the past few years. Even when other
businesses were shutting down and falling apart during the pandemic year of
2020, Amul generated approximately 5.4 billion dollars with a growth rate.
WEAKNESSES
• Lack of Success in Portfolio Expansion
Amul has expanded its product portfolio to add 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.
• Supply Chain
Although Amul has a vast network it doesn’t have a proper mechanism of the
supply chain. The inconsistent and unpredictable nature of the supply chain
makes the business very risky.
• Lawsuits/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 favor of Hindustan Unilever.
This caused the company a lot of embarrassment and also contributed to
defaming the company’s public image.
• High Operational Cost
Amul has a vast structure spread over 13 districts and 13000 villages of Gujarat.
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.
OPPERTUNITIES
• International Markets
The global market is full of new opportunities. Especially the neighbouring Asian
countries would have great growth potential. Amul should shift its focus into
those markets and expand it there. It would help the company to increase its sale
and revenue stream.
• Per Capita Milk Consumption
Amul is heavily relying on the Indian market as its main source of sale of revenue.
The sale of the company’s products is much lower in the EU and the USA market.
However, the milk consumption rate is increasing in those markets, the expansion
in those markets would increase customer’s market share.
• 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.
THREATS
• Pandemic
The pandemic of covid-19, lockdown, social distancing, and economic crisis has
very badly impacted the buying power of ordinary users. People have already
limited their spending to basic necessities. If things aggravate, it would impact
the company’s growth.
• 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.
• Increasing Competitors
Havmor, London Dairy, Baskin Robins, Mother Dairy, and Kwality Walls are some
of the main competitors of Amul. Their presence in the market is making it
difficult for the cooperative brand to sell its products. When the company
launches any marketing campaigns, it increases the operational cost. It’s a loss-
loss situation for the company.
CONCLUSION
The SWOT analysis of Amul highlights where the brand currently stands and
its threats in this era. After an in-depth study of the swot analysis of Amul, we
have realized that Amul is indeed the world’s leading dairy products producing
company. The increasing cost, competitors, bad press, lawsuits, and a pandemic
are some of the main challenges. Amul should utilize its resources to expand its
customers’ market and profitability.
REFERENCES
• https://businessmavericks.org/swot-analysis-of-amul/
• https://swotandpestleanalysis.com/swot-analysis-of-amul/
• https://www.slideshare.net/nkniteen/swot-analysis-of-amul/

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