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Case | HBS Case Collection | May 2016 (Revised June 2017)

India's Amul: Keeping Up with the Times

by Rohit Deshpandé, Tarun Khanna, Namrata Arora and Tanya Bijlani

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Abstract

Amul is an Indian dairy cooperative founded in 1947—eight months before India's independence from British rule—and owned by over three million farmers in the state of Gujarat. It is India's largest food product marketing organization, selling 46 products, including pouched milk, cheese, butter, ice cream, and infant food through a million retailers across the country, and is the market leader in almost all the categories in which it operates. Amul is well known among Indian consumers for offering high-quality products at reasonable prices, and runs a highly popular advertising campaign that spoofs current events. It offers its farmers 80% of the consumer's dollar for milk, compared with 35%–40% typical in some Western markets. Amul's cooperative dairy model has been replicated across several Indian states, thereby helping increase the incomes of 80–100 million farmer families across the country. However, despite its success, Amul is beginning to come under increasing pressure. Multinationals like Nestlé and Unilever are increasing their presence in India and competing fiercely with Amul in value-added products like yogurt. The entry of large multi-brand retailers like Walmart and Carrefour in the Indian market threatens to squeeze Amul's margins and undermine its low-cost distribution network. India's large young rural population is shying away from dairy farming in favor of urban jobs, leaving questions about future procurement. Finally, Amul's farmers form a large vote bank in the state of Gujarat, and its cooperative structure risks being compromised by vested political interests. Should Amul continue with the business model that has served it so well for decades, or should it change its strategy in order to keep up with India's changing social, political, and economic landscape?

Keywords: globalization; Expansion; Dairy; india; Cooperatives; milk; leadership; Agriculture; Agribusiness; Competition; Marketing; Organizational Change and Adaptation; Agriculture and Agribusiness Industry; India;

Language: English Format: Print 25 pages EducatorsPurchase

Citation:

Deshpandé, Rohit, Tarun Khanna, Namrata Arora, and Tanya Bijlani. "India's Amul: Keeping Up with the Times." Harvard Business School Case 516-116, May 2016. (Revised June 2017.)

Related Work

  1. Teaching Note | HBS Case Collection | February 2017

    India's Amul: Keeping Up with the Times

    Tarun Khanna, Rohit Deshpandé and Namrata Arora

    Teaching Note for HBS No. 516-116.

    Keywords: globalization; Expansion; Dairy; india; Cooperatives; milk; leadership; Agriculture; Agribusiness; Competition; Marketing; Organizational Change and Adaptation; Agriculture and Agribusiness Industry; India;

    Citation:

    Khanna, Tarun, Rohit Deshpandé, and Namrata Arora. "India's Amul: Keeping Up with the Times." Harvard Business School Teaching Note 517-105, February 2017.  View Details
    CiteView DetailsPurchase Related
  2. Case | HBS Case Collection | May 2016 (Revised June 2017)

    India's Amul: Keeping Up with the Times

    Rohit Deshpandé, Tarun Khanna, Namrata Arora and Tanya Bijlani

    Amul is an Indian dairy cooperative founded in 1947—eight months before India's independence from British rule—and owned by over three million farmers in the state of Gujarat. It is India's largest food product marketing organization, selling 46 products, including pouched milk, cheese, butter, ice cream, and infant food through a million retailers across the country, and is the market leader in almost all the categories in which it operates. Amul is well known among Indian consumers for offering high-quality products at reasonable prices, and runs a highly popular advertising campaign that spoofs current events. It offers its farmers 80% of the consumer's dollar for milk, compared with 35%–40% typical in some Western markets. Amul's cooperative dairy model has been replicated across several Indian states, thereby helping increase the incomes of 80–100 million farmer families across the country. However, despite its success, Amul is beginning to come under increasing pressure. Multinationals like Nestlé and Unilever are increasing their presence in India and competing fiercely with Amul in value-added products like yogurt. The entry of large multi-brand retailers like Walmart and Carrefour in the Indian market threatens to squeeze Amul's margins and undermine its low-cost distribution network. India's large young rural population is shying away from dairy farming in favor of urban jobs, leaving questions about future procurement. Finally, Amul's farmers form a large vote bank in the state of Gujarat, and its cooperative structure risks being compromised by vested political interests. Should Amul continue with the business model that has served it so well for decades, or should it change its strategy in order to keep up with India's changing social, political, and economic landscape?

    Keywords: globalization; Expansion; Dairy; india; Cooperatives; milk; leadership; Agriculture; Agribusiness; Competition; Marketing; Organizational Change and Adaptation; Agriculture and Agribusiness Industry; India;

    Citation:

    Deshpandé, Rohit, Tarun Khanna, Namrata Arora, and Tanya Bijlani. "India's Amul: Keeping Up with the Times." Harvard Business School Case 516-116, May 2016. (Revised June 2017.)  View Details
    CiteView DetailsEducatorsPurchase Related

About the Authors

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Rohit Deshpande
Sebastian S. Kresge Professor of Marketing
Marketing

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Tarun Khanna
Jorge Paulo Lemann Professor
Strategy

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View Publications »

 

More from these Authors

  • Teaching Note | HBS Case Collection | January 2019

    Kumbh Mela: India's Pop-up Mega-City

    Tarun Khanna, John Macomber and Saloni Chaturvedi

    Citation:

    Khanna, Tarun, John Macomber, and Saloni Chaturvedi. "Kumbh Mela: India's Pop-up Mega-City." Harvard Business School Teaching Note 219-081, January 2019.  View Details
    CiteView DetailsPurchase Related
  • Case | HBS Case Collection | August 2013 (Revised January 2019)

    Kumbh Mela: India's Pop-up Mega-City

    Tarun Khanna, John Macomber and Saloni Chaturvedi

    Keywords: India;

    Citation:

    Khanna, Tarun, John Macomber, and Saloni Chaturvedi. "Kumbh Mela: India's Pop-up Mega-City." Harvard Business School Case 214-023, August 2013. (Revised January 2019.)  View Details
    CiteView DetailsEducatorsPurchase Related
  • Case | HBS Case Collection | January 2019

    Rural Taobao: Alibaba's Expansion into Rural E-Commerce

    Tarun Khanna, Ryan Allen, Adam Frost and Wesley Koo

    Alibaba's Rural Taobao initiative had been launched in 2014 as a public service initiative to increase e-commerce adoption in China’s remote rural areas. In the first two iterations of the initiative, dubbed “1.0” and “2.0”, Alibaba had partnered with local businesses and young returnees to operate village stations. Village stations served as logistical and educational hubs to help villagers make online purchases. Despite significant growth in sales through village stations, the business model was operating at a loss, and competitors JD and Pinduoduo were growing quickly, threatening to challenge Alibaba by claiming the rural e-commerce markets. Bill Wang, the head of the initiative, was tasked with designing and implementing the next model for Alibaba’s future expansion into rural areas. The decision centers around whether Alibaba should copy the successes of competitors JD and Pinduoduo, escalate commitment to its original value proposition (hands-on service to villagers), or embrace an entirely new model. The case highlights the competing pressures of financial performance, CSR and corporate mission, government relations, and long-term competitive positioning that are common to major strategic decisions.

    Keywords: strategy; Business growth; ecommerce; corporate social responsibility; Business and Government; emerging market; Market Platforms; Online Technology; Emerging Markets; Rural Scope; Growth and Development Strategy; Competitive Strategy; Corporate Social Responsibility and Impact; Business and Government Relations; Decision Making; China;

    Citation:

    Khanna, Tarun, Ryan Allen, Adam Frost, and Wesley Koo. "Rural Taobao: Alibaba's Expansion into Rural E-Commerce." Harvard Business School Case 719-433, January 2019.  View Details
    CiteView DetailsEducators Related
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