Akanksha Ahuja

FT173008

Mother Dairy: Creating a national footprint

P.E.S.T.E.L Analysis
POLITICAL Factors

De-regularisation of dairy sector allowing for easy entry of multiple

local and national players
100% FDI in the sector gives edge to international players with vast
experience in Supply Chain Management
Pradeshik Co-operative Dairy Fed. (PCDF) of UP, associated as supplier
was government supported entity.
MMPO-1992: To further enhance the dairy industry in India

ECONOMIC Factors

With the rise in production cost by 68% it will be difficult to maintain

margins in a competitive new market
Aggressive expansion by Amul (especially 46% share in package milk
segment) in Delhi has reduced the market share in the stronghold,
affecting revenue
Availability of labour further deepen the problem
The Indian milk suppliers were scattered. Hence, consolidation was a
crucial factor
Indias projected 1.4 billion population by 2025 representing one of the
youngest population in the world

SOCIAL Factors

Milk occupied a strong interwoven relationship with Indian Cultural

values in terms of rituals, vegetarianism and so on.
Indian Consumers trust in unadulterated and superior quality of private
brands
Prevalence of lacto-vegetation created more dependency on milk and
dairy products
With rapid urbanization people want more value added products,
growth has to factor in this segment as well
Emergence of various co-operatives among Indias suppliers of raw
milk provided some degree of bargaining power to the suppliers

TECHNOLOGICAL Factors

Robustly established supply chain management became crucial to be

successful in dairy sector because of highly perishable nature of milk
products
Milk Trucks were sent to rural areas in order to overcome the adulteration
problem
International players will use their expertise to cut costs and maximize
profits due to tried and tested technologies

ENVIRONMENTAL Factors

Increasing Urbanization and increasing diseases like diabetes, high

cholesterol caused a shift towards healthy dietaries

Akanksha Ahuja
FT173008

Increase in urbanization and surging income levels increased the demand

for package dairy products that saved time

LEGAL Factors

The governments support and close relationship provided credibility.

Perhaps, it made it impossible to make aggressive and time-bound
decisions
Standards set by BIS need to followed more strictly when launching
new products
No cap on international investments coupled with the focus of GOI to
double the milk production by 2020 will lead to many new entries.
Adherence to the colour coding set by the government when designing
new advertisement campaigns