Amul Business Model

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  • Topic: Milk, Dairy products, Powdered milk
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  • Published : January 5, 2012
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AMUL
ANAND MILK UNITED LIMITED

Introduction
 The largest food brand in India and world's Largest Pouched Milk Brand µAmul¶ is a brand name managed by Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF).

 This name has its origin in the Sanskrit word "Amoolya," (meaning Priceless) and was actually suggested by an employee of Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)

 The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India and is the apex organization of the Dairy Cooperatives of Gujarat.

 With a turnover of INR 67.11 billion GCMMF has created an economic network that links :

‡ millions of consumers in India and abroad, ‡ 2.8 million village milk producers, ‡ a cooperative system that includes 13,141 Village Dairy Cooperative Societies (VDCS) at the village level, ‡ further affiliated to 13 District Cooperative Milk Producers¶ Unions at the District level and GCMMF at the State level.

History

‡

Condition of dairy farmers

‡

Plea of dairy farmers and role of Sardar Vallabh Bhai Patel

‡

Formation of first District Co-operative µKaira¶

‡

Formation of µGCMMF¶

Condition of dairy farmers

 There was exploitation of marginal milk producers by traders or agents of existing dairies in the small town named Anand (in Kaira District of Gujarat) and Polson Dairy .  Other problems faced by dairy farmers in Gujrat.

Role of Sardar Vallabh Bhai Patel

‡ Unfair trade practices and minimal returns angered dairy farmers.

‡

So under the leadership of Tribhuvandas Patel dairy farmers approached Sardar Vallabh Bhai Patel for a solution.

Formation of District Co-operative µKaira¶
‡ Thus the first District Cooperative was established to

collect and process milk in the District of Kaira in 1946.

‡ Milk collection was also decentralized and village level

cooperatives were established to organize the marginal milk producers in each of these villages. ‡ The brand Amul was formally registered on December

14th, 1946

Formation of µGCMMF¶

‡ Later on with the help of Dr. Verghese Kurien and Shri H M Dalaya this revolution spread to most of the districts in Gujrat. ‡ Thus GCMMF came into being in the year 1973.

‡ Initially, the brand name Amul was with Kaira district dairy cooperative, but later they decided to give it to GCMMF

Father of White Revolution

 The father of the White Revolution, Dr. Verghese Kurien and the World Food Prize & the Magsaysay Award winner, is responsible for the grand success of brand µAmul¶.

AMUL Business Model

In a recent survey,
 GCMMF ranked amongst the top ten FMCG

firms in the country
 AMUL rated the second most recognized brand

in India amongst all Indian and MNC offerings

What makes AMUL successful???

Business Model
 Objective :
Deliver profitable and equitable returns to a large number of farmers for a long period of time

 Additional objective
Develop the supplier over the long term through social change.

Raw milk
Pasteurization
Packaged Milk ->Ice cream and beverages Dried Milk ->Skimmed milk powder

Condensed ->Ghee, butter, cream

Amul s Supply chain is one of the most complicated in the world

Success depends on
High collection rate of milk

Required increasing membership with more village societies

Better Cattle management- Better milk yield

Ensure cost to farmers and high quality to customer at low prices

Developing Demand
 Consumers- Limited Purchasing power  Modest consumption levels of milk  Low cost price strategy  Products affordable & attractive

Distribution Network
 Dry and cold warehouses to buffer inventory  Transactions on an advance demand draft

basis
 Just-in-time inventory strategy improves

dealers' return on investment (ROI)
 All branches -dedicated vehicle operations.

Umbrella brand
 Common brand for most product...
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