Coevolution At Amul


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Cooperative company with sophisticated development of competencies

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Coevolution At Amul

  1. 1. Coevolution at AMUL <ul><li>by </li></ul><ul><li>Dr. K. Sreenivas Rajan </li></ul><ul><li>Academic Assistant </li></ul><ul><li>IIM Ahmedabad </li></ul><ul><li>AMUL- Milkman to the Nation </li></ul>
  2. 2. What is coevolution? It is a biological term meaning reciprocal evolutionary change in interacting species In business, it means changes in one competence leads to changes in another competence Synergistic view of competencies Sum of changes should be more than individual changes
  3. 3. Coevolution at Amul <ul><li>Cooperative Competence, dairy technology competence, logistics competence, brand capability competence and cost leadership competence </li></ul><ul><li>Cooperative competence has coevolved with Brand competence </li></ul><ul><li>Cost leadership competence has coevolved with logistics competence </li></ul>
  4. 4. Cooperative Capability <ul><li>Vision of Jawaharlal Nehru: 4.53 lakh cooperatives in 1996-97; membership 20.45 crores </li></ul><ul><li>In the 21st Century, Cooperative capability has evolved to require more transparency, better corporate governance and high degree of professionalism. </li></ul><ul><li>Khusro Committee (1989) Commercialization </li></ul>
  5. 5. The importance of Cooperatives <ul><li>Cooperative movement is widely spread in rural areas </li></ul><ul><li>Cooperative movement offers the same sense of ownership as equity and ensures the full involvement of farmers and other employees </li></ul><ul><li>India lives in the villages and benefits of organisation are available in villages </li></ul>
  6. 6. Dairy Technology <ul><li>Dairy technology changed to make yellow butter and coevolve with marketing needs. Utterly butterly delicious required changes in dairy technology </li></ul><ul><li>Dairy processing to increase quality and shelf life (Homogenization, Standardization) </li></ul><ul><li>Improvements in quality through automation </li></ul>
  7. 7. Logistics <ul><li>2.5 million milk families – of 13 million coop producers. Logistics challenge to transport 8.1 million litres of milk and payments of 100 million rupees. </li></ul><ul><li>Logistics cost 40 paise to a litre of milk </li></ul><ul><li>Logistics crucial to capture national markets such as Bombay and Madras </li></ul><ul><li>Logistics coevolves with cost leadership </li></ul>
  8. 8. Cost Leadership <ul><li>Technology that converts buffalo milk into powder and therefore ensures cost leadership </li></ul><ul><li>Cost leadership in feed which costs 60% of price of milk </li></ul><ul><li>Cost leadership through logistics </li></ul><ul><li>Cost leadership through tying price of milk to fat. </li></ul>
  9. 9. Brand Strategy <ul><li>20 product groups, 400 plus stock keeping units, 34 supply centres, 50 sales offices, 300 member sales team, 5000 stockists and over 700000 retail outlets. </li></ul><ul><li>Amul marketing has coevolved with changes in marketing such as advertising, branding, digital strategy and increasing commercialisation and also global food chains </li></ul>
  10. 10. Processes of Coevolution <ul><li>Internal process </li></ul><ul><li>Elections are keenly contested and reforms are discussed. Leadership of Mr. Kurien has been valuable. </li></ul><ul><li>Ideology of cooperation and support to customers – Health of customer has increased with consumption of milk and introduction of probiotic foods </li></ul>
  11. 11. External Process <ul><li>The movement has been influenced by the Gandhian movement. </li></ul><ul><li>National recognition under NDDB and Operation Flood </li></ul><ul><li>International recognition by International Food comparison network </li></ul><ul><li>Amul has played a significant role in white revolution </li></ul>
  12. 12. Growth Process <ul><li>Amul has grown by diversification into ice cream, edible oil and fruits. </li></ul><ul><li>Dhara, Amul ice cream and Safal are succesful brands </li></ul><ul><li>Distribution and branding competencies are shared </li></ul><ul><li>AMUL has grown on a nationwide basis and from a milk company to food company. </li></ul>
  13. 13. Coevolution Success <ul><li>By not responding to change, companies become old fossils and competition kills them </li></ul><ul><li>Amul has evolved its competencies, production has influenced branding, logistics has influenced cost leadership and internal, external and growth processes have brought the rewards of coevolution.. </li></ul>