COMPFED: The Dairy Cooperative Distribution System Harvard Case Solution & Analysis

Bihar State Milk Cooperative Federation (COMPFED) had been advertising its milk and milk linked commodities under the brand name of Sudha in Bihar and Jharkhand areas of India for three decades. They managed through two dairies and six unions to process the milk collected from nearly 4,000 village level cooperatives. On the surface, COMPFED seemed to get a competitive advantage for its supply of milk as it preserved the biggest network for milk attainment, which crossed a broad geography over these two areas and was unmatched by its competitors.

Nevertheless, due to various environmental forces, the capacity to procure an adequate supply had declined in the last couple of years, which negatively affected the overall profitability of the organization. Since he operated in an industry with high fixed costs, lower sales was meant by the diminishing supply of milk procurement. As a consequence, there clearly was no opportunity to lower operating costs to coincide with the small supply. The marketing manager thought of two reasons existing in the outside environment that contributed to this situation. A string of incessant floods had caused damages to grazing land and livestock businesses in several of the hamlets that were the source for milk. Moreover, the supply chain was being disrupted by private players by donating short term higher expenses to a few suppliers/farmers on a case by case beginning. These players did not encounter the same authoritarian and hygienic strategies that COMPFED did and managed outside the standard infrastructure. His options contained two different choices; trying to work with these agents or ensuring a process to minimize or eradicate their actions.

PUBLICATION DATE: March 16, 2012 PRODUCT #: W11822-HCB-ENG

This is just an excerpt. This case is about SALES & MARKETING

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