Swot analysis of Amul. Amul is a dairy and food processing Indian cooperative society. Tribhuvandas Patel was the founder of the cooperative brand, and he laid the foundation of Amul in 1946. The headquarter of the company is in Anand, Gujarat, India.
Amul is the largest milk & milk-based products producing company in India. In fact, Indian White Revolution was initiated and culminated by Amul. Tribhuvandas Patel, Harichand Megha Dalaya, and Verghese Kurian were the key figures behind the establishment of the cooperative society.
Amul’s main products and services are;
- Milk powder,
- Pizza cheese,
- Ice cream,
- Traditional Indian sweets.
According to an estimate, the annual revenue of Amul in 2020 was 5.4 billion dollars (38,550 crores). However, the brand has employed more than 3.6 million people to manage its daily operations.
Amul’s main competitors are;
- London Dairy,
- Baskin Robins,
- Kwality Walls,
- Mother Dairy,
- Arun Ice Cream,
Today, we’ll discuss swot analysis of Amul. It’s going to analyze the internal and external factors impacting the world’s top milk-producing company. Here’s the swot analysis of Amul as follows;
Strengths of Amul
Large Customer Base
Amul provides quality products and it helped the cooperative society to attract both rural and urban demographics. 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.
It’s the quality of products and services that have allowed Amul to maintain trusting relations with its customers over the years. The brand has also developed professional relations with government health and safety departments. In fact, appreciation from such departments increases the credibility of the company.
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.
According to an estimate, the growth of ice cream and milk-based products of Amul has increased by 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. In other words, we can say that the cooperative brand is a market leader.
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 20 million liters 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. Now, the company plans to achieve 1 lakh crores by the end of 2025.
Weaknesses of Amul
It’s no doubt Amul offers a diverse product portfolio to its customers. But some of its products haven’t succeeded during the expansion phase. Like chocolate couldn’t achieve the same success as ice cream.
Amul has a vast structure spread over 13 districts and 13000 villages of Gujarat, and it increases the cost the operational cost. That’s why the cooperative company keeps on changing its prices whenever the farm union decides because of the daily expenses and variable costs.
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.
Amul used a condescending tone in its marketing and promotional advertisement in 2017. However, HUL (Hindustan Unilever Limited) did take notice of the company’s arrogant marketing approach and filed a lawsuit against Amul. The court gave the verdict in favor of HUL and ordered the cooperative society to shut down its disparaging marketing campaign immediately.
Opportunities available to Amul
As we know that Amul has launched chocolate. Now, the company should invest more resources for the improvement of the product up to the international, and launch a better marketing campaign to target new customers.
The global market is full of new opportunities. Especially the neighboring 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.
Increasing 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 lower in the EU and the US market. However, the milk consumption rate is increasing in those markets, the expansion in those markets would increase customers’ market share.
Threats Amul has to face
The lawsuit and other scandals have brought a lot of bad press to negatively highlight Amul’s image in the market. If it keeps happening like this, it would impact the company’s sales and profitability.
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: Amul Swot Analysis
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.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.