Case Analysis: Amul Dairy Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Case Analysis: Amul Dairy Case Solution

1 PEST analysis

1.1 Political Factors

The political factors reflect some negativity for the dairy industry of India. The government has restricted export of milk powder and has allowed MNCs to enter the market through 100% FDI. Furthermore, the government has also reduced the import duties. However, the good thing is that the government of the country is stable which leads to a consistent and stable political environment, which is a good indicator for the industry.

1.2 Economic Factors

The economic factors are very favorable for the industry, since the consumption of the population is increasing due to an increased purchasing power. Moreover, the concept of urbanization is growing; the cost of production is decreasing due to growth in infrastructure and economies of scale.

1.3 Social Factors

The social factors are also very favorable for the industry since; the fast food lovers are switching to ice cream, cheese, and milk. Moreover, the culture of the country shows a great demand for milk and related products because of the traditions and trends. Most importantly, the demographics show that the market is huge for this industry.

1.4 Technological Factors

The technological factors of the country are somehow unstable since the pace of technological change is rapid, which increases the threat of obsolesce. Furthermore, the change in technology provides companies competitive advantage, but it’s also a threat to the industry.

2 Industry Attractiveness (Porter’s Five Forces)

2.1 Threat of new Entrant

The threat of new entrant towards the dairy industry is small since the industry members have achieved economies of scale and with a significant learning and experience curve. Moreover, these factors give a cost advantage to the sector members, which cannot be gained by a new entrant. Furthermore, the cost of entry is high and the distribution channel is restricted while the marketing management also incurs a high cost, which cannot be met easily be a newcomer. Furthermore, brand loyalty is very high and therefore, the new player cannot attract buyers easily. Also, specialized knowledge and technology is the key to surviving in the industry, which is not easily available to the newcomer. In conclusion, it can be seen that the barriers of entry towards the sector are high, which reduces the threat of new entrants.

2.2 Bargaining Power of Supplier

Therefore, the government restricts the companies to give them a good share of profit while giving them the moderate power to bargain in pursuit of reasonable profits. Due to co-operative society, farmers’ rights are saved and they have been given a medium authority to bargain over the industry members.

2.3 Bargaining Power of Buyer

The buyer of the industry possesses a significant power to bargain since, the cost of switching is very low and there are numerous brands available in the market. Also, the concentration of buyers also gives them an edge to bargain with the industry members, as there are numerous options available for them to choose from. In conclusion, the number of buyers is large, they count a lot for the industry’s revenue................

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