Know the Successful Business Strategies from PESTLE Analysis of Amul

PESTLE Analysis Amul

by Shamsul
Pestle Analysis of Amul
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Know the Successful Business Strategies from PESTLE Analysis of Amul

PESTLE Analysis of Amul

PESTLE analysis investigates the business strategies of any organization, business, or company. It involves many political, economic, social, technological, legal, and environmental factors. These factors create a huge impact on companies and offer different scenarios to understand the working strategy of the business. This PESTLE analysis of Amul highlights its market dynamics, business strategy, and other external factors. They can improve their business by evaluating their business using this tool and these factors. Let start the PESTLE analysis of Amul:

Political Factors – Amul PESTLE Analysis

We believe that a business grows rapidly in a favorable political environment. Due to the stable political conditions in Mumbai, Kolkata, and Pune, Amul achieved 11.35 % growth within a few months. Moreover, the company has successfully built long-lasting relationships with milk producers and distributors. It is because Amul gives them attractive prices and is really committed to them. Amul has established its milk procurement operation with the name of “Amul Pattern” in West Bengal. Simultaneously, the company has developed new milk societies in Punjab and Gujarat.

They provide high-quality feed and vet services to the cattle. The last two years were tough because of the lower consumption of dairy products in China and the import/export problem. This goes the same for Germany and automatically lowers the company’s growth. If the local and State government support the company, it can achieve the highest progress and procurement rate, and these factors are enough to take Amul to the next level of success.

Economic Factors – PESTLE Analysis of Amul

Due to the low milk procurement rate in different countries, Amul has significant advantages. As a result, the price of its products such as butter and milk powder reduced, which added benefits to the company. The price of powdered milk improved from 130 t0 150 and the milk procurement prices were also affected by 4 to 5 per liter. There is no doubt that the international and local economies are facing a recession, and the high cost of transportation can create supply chain problems. They can face trouble in providing their products to end consumers due to the rising transportation costs. The prices of diesel and milk were increased in 2019, resulting in the company’s expensive milk transportation. The increase in bank commission and interest rate is another big factor.

Social Factors – PESTLE Analysis

Society and culture are two important social factors, and it points out the buying decision of an individual. Several other factors play a significant role in this matter, such as families, friends, reference groups, and peer groups. Thus play a significant role in the consumption of any product and show the buying power of consumers. The company has effectively benefited from the above factors by targeting children and women. They have a strong segment in their product portfolio for children and families. Another factor that is playing a major role is the vegan lifestyle.

People are turning to vegan products rapidly these days, and it can hurt the dairy business because most of its products are made from ingredients obtained from animals. But, the overall standing of Amul is in beneficial condition because a large number of its dairy products are used in Indian households every day. Everything is made from milk from morning tea to desserts, ice creams, and much more. The culture of junk or fast food also promotes certain things like the consumption of ice cream.

Technological Factors – PESTLE Analysis of Amul

As a big food and beverage company, Amul realizes the need for the latest technologies. Due to this purpose, they invest in the latest technologies and replace them with old technologies. It helps them produce products in less time and easily retain their consumer base. The company has invested 600 to 800 crores in a milk processing plant in recent years. Moreover, the company is also expanding its units which require a lot of money. Every dairy company is adopting new technologies in order to improve milking animals and productivity. Although some of the steps are a little faulty, they can use them incorrectly to fulfill the market requirements. The new technologies are fortified with smart identities and chips. It can help companies to increase the productivity and health records of the cattle.

Legal Factors – PESTLE Analysis

If you are an international organization, you face different legal problems according to the country you are operating in. In 1998, the company observed various dairy companies using its name on its milk pouches. These companies were operating with “Amul Taza” and “Amul Shakti” which was really distressing for Amul. They were using the same packaging and name. They were giving tough competition to Amul in rural markets because of their lower prices. This was creating confusion in users’ minds, but Amul has successfully offered high-quality milk and products. They also filed cases against these dairies and finally won. These factors can disturb any company’s image and revenue stream, and you should use proper legal channels to fight against these fake companies or brands.

Environmental Factors – PESTLE Analysis of Amul

Global warming is a major factor that is influencing the working of companies. As a big company, Amul understands its duty to protect the motherland. The latest technologies are running on gas, fuel, and electricity that are damaging the environment. Improper waste management is also polluting the environment. Every company is trying to use sustainable resources so that they can contribute to protecting nature. Amul has received National Energy Saving Award in 2018, which was a big success for the company. They are also reducing their carbon footprint and encouraging farmers to create nurseries. To conclude, this PESTLE analysis of Amul is enough to understand all the critical external factors.

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