Amul Chocolates is a product category of the milk company Amul which is the brand name for the Gujarat Cooperative Milk Marketing Federation. An after effect of the green revolution pioneered by Shri Verghese Kurien, the cooperative society makes milk and various milk products like curd, cheese, milk powder, cheese spread and chocolate amongst others.
Amul Chocolates also has Amul Chocozoo and Chocolate Syrup. The company registered a revenue of 6 billion USD in the year 2016 and is a registered cooperative society which has very good trust and recalls in India. From the time it was registered as the cooperative society in 1946 GCCF has supported the growth and development of a number of dairy farmers by coordinating the procurement, processing, and marketing of the milk that they supplied. Chocolates are one of the prestigious products of Amul.
Strengths in the SWOT analysis of Amul Chocolates
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Amul Chocolates :
- Marketing: Amul Chocolates because of its association with Amul has benefitted greatly from the marketing campaigns of the brand including the brand icon, the Amul Girl and its tagline Taste of India.
- Continuous spirit of innovation: Amul has drawn inspiration from leading confectionery businesses across the world and innovated in their chocolates. This has resulted in the new category of dark chocolate and the chocolate syrup.The spirit of innovation is also reflected in their marketing campaigns and packaging.
- Focus on brand Amul: One strategy that has helped the company as a whole is that instead of advertising individual products the focus has always been on the brand Amul.This has resulted in building goodwill and trust which has reflected in each of its products including its chocolates.
- Distribution channel: Amul follows a three-tier distribution strategy for all its products where their products are sourced at three levels from village to district to state and then distributed at three tiers namely company, wholesaler, and retailer.This ensures maximum coverage for Amul Chocolates.
- Focus on quality: Amul Chocolates has never compromised on quality.The company takes all possible steps to ensure that there is total compliance with all norms mandated by various health, safety, and quality regulatory agencies.
Weaknesses in the SWOT analysis of Amul Chocolates
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Amul Chocolates are:
- Lack of importance: Amul has never emphasized enough on its chocolates and the vertical has always been regarded as a low importance category with the company choosing to focus on butter or cheese.
- Lower number of variants: In comparison to competitors like Cadbury’s the number of varieties in the milk chocolate is low. This leads to boredom amongst customers who do not prefer this brand in spite of the chocolate being higher in quantity and quality.
- Low relative cost of promotion: The confectionery market is highly competitive and the purchase is focused on impulse purchase behavior. This means that only advertisements can trigger the purchase.However, the relative cost of promotion is low and thus the number of advertisements for chocolates in low.
- Low differentiation: The customer is unable to differentiate between various brands of chocolates because the category does not have anything much to offer in terms of a real difference in taste or texture.
- Focus on a regional hub: Most of Amul’s products are related to milk and the source is just a single hub which is Gujarat. Procurement and management of milk and manufacturing of chocolates is a supply chain challenge.
Opportunities in the SWOT analysis of Amul Chocolates
- Healthy chocolates: The customer is growing more conscious about health and this is creating a new need for sugar-free and low calories chocolates. Dark chocolate is also a preferred option for customers.These are areas that Amul Chocolates can look at.
- Steep growth potential in emerging economies: The confectionery market from a global level had a market potential of $184,056 million in 2015, and with a CAGR of 3.4 % the growth is expected to reach $232,085 million by 2022. Companies can capitalize on this.
- Chocolate flavored products: Amul can look at chocolate flavored products like milk powder, cream biscuits, chocolate cookies etc since chocolate is a hot favorite amongst kids.
Threats in the SWOT analysis of Amul Chocolates
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Competition: The main competitors of Amul are Perfetti Van Melle, Cadburys, Mars, Lindt etc.
- Low barriers to entry: The confectionery market has low barriers to entry with the result that many new players are entering into the market.There is also a huge market for homemade chocolates today which is proving to be a threat fro branded chocolates.