Company Overview
AMUL (Anand Milk Union Limited) installed in the year 1946 by Anand Curion at Gujrat.
Long since it had made an attempt to built its brand and with its dairy products of what it
basically started as only milk for the purpose of selling it to the small time retailers, became a
flagship brand and happens to be India’s largest dairy brand and biggest cooperative. As and
when the time passed by the concentric diversification happened and now they are mainly
into butter, cheese, milk powders, paneer, chocolates, ice creams and flavoured beverages.
The business model is the farmer-owned cooperative ensuring fair returns to farmers while
maintaining the quality of the dairy products. Rightly so, they kept the punch line to be “ The
taste of India” , to capture the Indian market in the beginning, emotional and sentimentally
too. By the early 1990’s, due to the growth of Indian economy, and also that the economy
gave importance to globalization, liberalization and privatization, the company started to
export their products to Gulf countries, US, Australia, Africa, selective in Europe and also
Singapore in the recent times.
Global opportunities also started to raise where the foreign countries were very particular
about the protein-rich foods and more inclined towards natural healthy products. This means
that AMUL were into less-processed products and that was preferred by the European
countries. More so there was a shift of fast-growing urbanization that led to change in the
food habits by the urbanites.
The challenge now is it started to face competition from the global and well known brands
likes Nestle, Kraft, Fonterra dominate but otherwise has a strong brand presence in the
domestic market. The mascot of Amul being the small little girl, has a recognition in the
domestic market and foreign countries are more inclined to the quality as compared to the
mascot. Further Amul went with the message of “the taste of India” in the initial stages,
which led the foreign countries to think otherwise. When Amul conducted the market survey,
they found that the Western countries preferred higher flavoured cheese, lactose-free milk
and yogurt drinks, where Amul had to put in that extra efforts and it also costed them that
little extra. Some of the middle east countries preferred camel milk and their local dairy
products. They also had to face regulatory barriers like the customized certifications in the
US (Food and drug administration) to that of EU quality certifications. Alongside, they also
faced challenges of cold supply chain, transportation and distribution, since it is perishable
items, they had to give the refrigerator effect, which means, an additional cost, which again
has to be born by the customers. Also AMUL had to rely on the third-party distribution,
which means little more extra cost as margin to the middle-men. But in a nutshell, AMUL
positioning both in India and as well as the foreign markets are concerned, it is more of an
affordable brand rather than compliance to the premium pricing. With all these constrains,
competing with the multinational giants, the pricing strategy couldn’t have attainted “value-
for-money”. Now the decision before the company is to go full-fledge India and then the
foreign markets or they are also in a dilemma standardization of all products and across.
Issues
1. outline the strategies that should be taken up by AMUL to make the presence effective in
the foreign markets.
2. Examine the focus of AMUL’s diaspora marketing strategies in the global markets.
3. Identify the entry strategies that would make the company to be synergically viable.
4. Analyse the case from its pricing strategies in the foreign markets- should it go with
“value-for-money” or decide to compete with competitive pricing.
5. If you were to be the decision-maker in the helm of affairs, what steps would you have
taken to gain advantage on the economies of scale.
