Questions:
1. What are the salient changes in the external environment of GCMMF? Are they posing constraints to GCMMF? What are they?
2. Evaluate GCMMF’s response to these changes in terms of (i) the resource requirements of the proposed food products business and (ii) resources and capabilities available at GCMMF.
3. Is GCMMF taking what it may think is the easy way out? Can it stay in its core business and make a difference to the milk sector in India (and yet be successful commercially)?
1. What are the salient changes in the external environment of GCMMF? Are they posing constraints to GCMMF? What are they?
1 . Competition
GCMMF diversified since it’s inception to a great extend and has top market share in most of it’s products. They are forced to compete with FMCG giants and small players at the same time for different products.
In the Liquid milk market, lot of emerging private diaries and contractors are bringing in competition especially with the festival season sales to the sweets makers who are not brand concerned. Britannia entered in the butter, cheese market with extensive advertising campaign. Local players and FMCG giants such as HLL and Nestle are sharing sweets and near ready sweets market to a great extend. Kwality and Walls brand of HLL and strong local players such as Vadilal ice creams are strong competitors in the ice-cream market. In the branded edible oil market, ITC holds the major share. Almost 70% of the sales are happening in the unbranded sector.
Hindustan Lever was considered to be a well-run company, with aggressive marketing styles and a highly result-oriented culture - turnover of Rs.101 ...