Yojana Magazine July 2023 - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 Page 1


17 July 2023
riginated in the last quarter of the  
19
th
 century, the Indian cooperative 
movement registered smooth and 
impressive progress until the 1970s. Certain 
issues started crippling the whole movement, and 
policy makers and planners slowly reduced their focus 
on cooperation-led socio-economic development. 
O
The inherent growth potential of cooperation needed 
an immediate and renewed policy attention. At this 
juncture, for Sahakarita se Samriddhi, the Ministry 
of Cooperation was formed with a renewed focus 
at cascading the movement down to the grassroots 
through acts of cooperation. This aims to realise the 
dream of Atmanirbhar Bharat. and to enable the 
Dr manisha paLiwaL the author is Professor, Sri Balaji University, Pune, Maharashtra. email: mnpaliwal@gmail.com
Cooperation is entrenched in the philosophy of India. The clarion call of 
India’s Prime Minister – Sahakarita se Samriddhi witnessed creation of the 
Ministry of Cooperation on 6 July 2021 to provide a distinct administrative, 
legal, and policy agenda for reviving, reorganising, and modernising 
cooperatives. The need of the time is to empower cooperatives to compete 
on par with corporate business entities. In order to remain relevant and 
competitive, cooperatives from the community level to the national level 
need to diversify their businesses. 
strategiC DiversiFiCatioN 
oF Cooperatives aND  
BusiNess Competitive Ness
FOCUS
Page 2


17 July 2023
riginated in the last quarter of the  
19
th
 century, the Indian cooperative 
movement registered smooth and 
impressive progress until the 1970s. Certain 
issues started crippling the whole movement, and 
policy makers and planners slowly reduced their focus 
on cooperation-led socio-economic development. 
O
The inherent growth potential of cooperation needed 
an immediate and renewed policy attention. At this 
juncture, for Sahakarita se Samriddhi, the Ministry 
of Cooperation was formed with a renewed focus 
at cascading the movement down to the grassroots 
through acts of cooperation. This aims to realise the 
dream of Atmanirbhar Bharat. and to enable the 
Dr manisha paLiwaL the author is Professor, Sri Balaji University, Pune, Maharashtra. email: mnpaliwal@gmail.com
Cooperation is entrenched in the philosophy of India. The clarion call of 
India’s Prime Minister – Sahakarita se Samriddhi witnessed creation of the 
Ministry of Cooperation on 6 July 2021 to provide a distinct administrative, 
legal, and policy agenda for reviving, reorganising, and modernising 
cooperatives. The need of the time is to empower cooperatives to compete 
on par with corporate business entities. In order to remain relevant and 
competitive, cooperatives from the community level to the national level 
need to diversify their businesses. 
strategiC DiversiFiCatioN 
oF Cooperatives aND  
BusiNess Competitive Ness
FOCUS
18 July 2023
proFit multiplier through BusiNess DiversiFiCatioN
members of the cooperatives to make their own 
decisions and destiny without fear or influence from 
any outside party. The movement has witnessed the 
registration of 8.54 lakh cooperative societies with 
29 crore members in the country. The need of the 
time is to empower cooperatives to compete on par 
with corporate business entities. India’s cooperative-
led economic model suffered due to several limiting 
issues, viz. accountability and governance aspects, in-
house vested interests, lack of coordination, political 
interference, and lack of diversification. 
need for Business Diversification
Any business to remain commercially viable, has 
to look beyond its primary customers and markets. 
It has to explore potential markets for new products 
and services. Without diversification, stagnation 
sets in, which impedes the business’s future growth. 
Further, strategic diversification forces a business to 
take steps that can ensure its relevance in the market, 
as investments made in research and development, 
marketing, product development, etc., can cause 
a business to identify customers whose needs are 
not fulfilled yet and to identify blue ocean markets, 
enabling it to earn profit and wealth in the long run.
Business Diversification by Cooperatives
An entity is stated to be in business if it is 
engaged in commercial, industrial, and professional 
activities with the objective of making profits. A 
cooperative being a legally incorporated structural 
entity, follows the in-built principles of cooperation 
and serves the interests of its members. Cooperatives 
as business entities, can be profit-sharing enterprises 
or non-profit entities. They serve their members 
by providing goods and services that may be 
unavailable or too costly to access as individuals. A 
cooperative society needs funds to function. It has 
In Sittilingi – a tribal village of Dharmapuri district of Tamil Nadu, 500+ members joined hands to form 
Sittilingi organic Farmers Association (SoF A) as a cooperative society in 2004. With a per capita minimum 
size of 2.5 acre land holdings, members cultivate ragi, bajra, little millet, foxtail and pearl millet, and cash 
crops, viz. cotton, turmeric, sugarcane, groundnut, and vegetables. To ensure financial and economic 
viability of member farmers, SoFA advises crop production as per market demand, ensures that no 
member grows the same crops, guarantees variety for the end-customers. The members have diversified 
into production and marketing of millet-based cookies, health-mixes, roasted powders, papads, etc., 
which is sourced by 40 retail outlets, enabling an outlet turnover of a minimum of rs 50,000/month. 
SoFA has diversified into ancillary agri-business too, viz., organic fertilisers and are running plant 
nurseries and bio-compost units with a collective turnover of rs 25 lakh a year. 
Source: Sittilingi Organic Farmers Association (SOFA, available at https://www.sofasittilingi.org)
Page 3


17 July 2023
riginated in the last quarter of the  
19
th
 century, the Indian cooperative 
movement registered smooth and 
impressive progress until the 1970s. Certain 
issues started crippling the whole movement, and 
policy makers and planners slowly reduced their focus 
on cooperation-led socio-economic development. 
O
The inherent growth potential of cooperation needed 
an immediate and renewed policy attention. At this 
juncture, for Sahakarita se Samriddhi, the Ministry 
of Cooperation was formed with a renewed focus 
at cascading the movement down to the grassroots 
through acts of cooperation. This aims to realise the 
dream of Atmanirbhar Bharat. and to enable the 
Dr manisha paLiwaL the author is Professor, Sri Balaji University, Pune, Maharashtra. email: mnpaliwal@gmail.com
Cooperation is entrenched in the philosophy of India. The clarion call of 
India’s Prime Minister – Sahakarita se Samriddhi witnessed creation of the 
Ministry of Cooperation on 6 July 2021 to provide a distinct administrative, 
legal, and policy agenda for reviving, reorganising, and modernising 
cooperatives. The need of the time is to empower cooperatives to compete 
on par with corporate business entities. In order to remain relevant and 
competitive, cooperatives from the community level to the national level 
need to diversify their businesses. 
strategiC DiversiFiCatioN 
oF Cooperatives aND  
BusiNess Competitive Ness
FOCUS
18 July 2023
proFit multiplier through BusiNess DiversiFiCatioN
members of the cooperatives to make their own 
decisions and destiny without fear or influence from 
any outside party. The movement has witnessed the 
registration of 8.54 lakh cooperative societies with 
29 crore members in the country. The need of the 
time is to empower cooperatives to compete on par 
with corporate business entities. India’s cooperative-
led economic model suffered due to several limiting 
issues, viz. accountability and governance aspects, in-
house vested interests, lack of coordination, political 
interference, and lack of diversification. 
need for Business Diversification
Any business to remain commercially viable, has 
to look beyond its primary customers and markets. 
It has to explore potential markets for new products 
and services. Without diversification, stagnation 
sets in, which impedes the business’s future growth. 
Further, strategic diversification forces a business to 
take steps that can ensure its relevance in the market, 
as investments made in research and development, 
marketing, product development, etc., can cause 
a business to identify customers whose needs are 
not fulfilled yet and to identify blue ocean markets, 
enabling it to earn profit and wealth in the long run.
Business Diversification by Cooperatives
An entity is stated to be in business if it is 
engaged in commercial, industrial, and professional 
activities with the objective of making profits. A 
cooperative being a legally incorporated structural 
entity, follows the in-built principles of cooperation 
and serves the interests of its members. Cooperatives 
as business entities, can be profit-sharing enterprises 
or non-profit entities. They serve their members 
by providing goods and services that may be 
unavailable or too costly to access as individuals. A 
cooperative society needs funds to function. It has 
In Sittilingi – a tribal village of Dharmapuri district of Tamil Nadu, 500+ members joined hands to form 
Sittilingi organic Farmers Association (SoF A) as a cooperative society in 2004. With a per capita minimum 
size of 2.5 acre land holdings, members cultivate ragi, bajra, little millet, foxtail and pearl millet, and cash 
crops, viz. cotton, turmeric, sugarcane, groundnut, and vegetables. To ensure financial and economic 
viability of member farmers, SoFA advises crop production as per market demand, ensures that no 
member grows the same crops, guarantees variety for the end-customers. The members have diversified 
into production and marketing of millet-based cookies, health-mixes, roasted powders, papads, etc., 
which is sourced by 40 retail outlets, enabling an outlet turnover of a minimum of rs 50,000/month. 
SoFA has diversified into ancillary agri-business too, viz., organic fertilisers and are running plant 
nurseries and bio-compost units with a collective turnover of rs 25 lakh a year. 
Source: Sittilingi Organic Farmers Association (SOFA, available at https://www.sofasittilingi.org)
19 July 2023
to identify ways and means to finance its activities. 
To make societies commercially viable and vibrant, 
strategic diversification is a must. ‘Strategy’, in the 
context of corporate entities, refers to its stated 
‘visions’ and ‘Missions’ . Strategic decisions are usually 
in congruence with the visions and missions of the 
organisation, and they flow downward towards the 
base levels of the organisation. Thus, in order to 
remain relevant and competitive, cooperatives from 
the community level to the national level need to 
diversify their businesses. 
viable Cooperative Business Strategies 
Cooperatives carry out businesses in all sectors. 
They need to firm up their vision and mission 
statements and frame the objectives and purposes 
for which these entities are formed. This information 
can help develop tactics for object diversification of 
businesses. Figure1 examines how a cooperative can 
diversify itself strategically by analysing five facets of 
strategic management. 
? y Initially, a cooperative should decide the exact 
nature of the goals it has and the various purposes 
behind which the goals will be outlined for their 
accomplishments.
? y Post-identification of the goals, a tactical 
understanding of the local situation would be 
required, followed by an internal and external 
environment assessment to conduct a Strength, 
Weakness, opportunity, and Threat (SWoT) 
analysis.
? y The next step is to formulate a strategy through 
which the goals can be achieved by means of 
reflection, prioritisation, and development of 
options for decision-making purposes. Then 
alternative options should be evaluated in order 
to form a strategy.
? y once the strategy is formulated, the person 
responsible for its achievement will be given 
charge of the available and allotted resources, 
personnel, and ways and means for achieving 
the strategy. They will have to put the chosen 
plans into practice, marshal the resources, and 
identify tactics through which the strategy can 
be implemented successfully.
? y The last step is to monitor the strategy against 
the agreed timeline/verification pattern to 
carry out a mid-term/periodic review about 
the success of activity intervention and take up 
corrective actions, if any.
Figure-1: Five facets of Strategic management
monitoring 
of the 
Strategy
Goal 
Setting
Goal 
a nalysis
Formulation 
of the 
Strategy
implementation 
of the Strategy
Page 4


17 July 2023
riginated in the last quarter of the  
19
th
 century, the Indian cooperative 
movement registered smooth and 
impressive progress until the 1970s. Certain 
issues started crippling the whole movement, and 
policy makers and planners slowly reduced their focus 
on cooperation-led socio-economic development. 
O
The inherent growth potential of cooperation needed 
an immediate and renewed policy attention. At this 
juncture, for Sahakarita se Samriddhi, the Ministry 
of Cooperation was formed with a renewed focus 
at cascading the movement down to the grassroots 
through acts of cooperation. This aims to realise the 
dream of Atmanirbhar Bharat. and to enable the 
Dr manisha paLiwaL the author is Professor, Sri Balaji University, Pune, Maharashtra. email: mnpaliwal@gmail.com
Cooperation is entrenched in the philosophy of India. The clarion call of 
India’s Prime Minister – Sahakarita se Samriddhi witnessed creation of the 
Ministry of Cooperation on 6 July 2021 to provide a distinct administrative, 
legal, and policy agenda for reviving, reorganising, and modernising 
cooperatives. The need of the time is to empower cooperatives to compete 
on par with corporate business entities. In order to remain relevant and 
competitive, cooperatives from the community level to the national level 
need to diversify their businesses. 
strategiC DiversiFiCatioN 
oF Cooperatives aND  
BusiNess Competitive Ness
FOCUS
18 July 2023
proFit multiplier through BusiNess DiversiFiCatioN
members of the cooperatives to make their own 
decisions and destiny without fear or influence from 
any outside party. The movement has witnessed the 
registration of 8.54 lakh cooperative societies with 
29 crore members in the country. The need of the 
time is to empower cooperatives to compete on par 
with corporate business entities. India’s cooperative-
led economic model suffered due to several limiting 
issues, viz. accountability and governance aspects, in-
house vested interests, lack of coordination, political 
interference, and lack of diversification. 
need for Business Diversification
Any business to remain commercially viable, has 
to look beyond its primary customers and markets. 
It has to explore potential markets for new products 
and services. Without diversification, stagnation 
sets in, which impedes the business’s future growth. 
Further, strategic diversification forces a business to 
take steps that can ensure its relevance in the market, 
as investments made in research and development, 
marketing, product development, etc., can cause 
a business to identify customers whose needs are 
not fulfilled yet and to identify blue ocean markets, 
enabling it to earn profit and wealth in the long run.
Business Diversification by Cooperatives
An entity is stated to be in business if it is 
engaged in commercial, industrial, and professional 
activities with the objective of making profits. A 
cooperative being a legally incorporated structural 
entity, follows the in-built principles of cooperation 
and serves the interests of its members. Cooperatives 
as business entities, can be profit-sharing enterprises 
or non-profit entities. They serve their members 
by providing goods and services that may be 
unavailable or too costly to access as individuals. A 
cooperative society needs funds to function. It has 
In Sittilingi – a tribal village of Dharmapuri district of Tamil Nadu, 500+ members joined hands to form 
Sittilingi organic Farmers Association (SoF A) as a cooperative society in 2004. With a per capita minimum 
size of 2.5 acre land holdings, members cultivate ragi, bajra, little millet, foxtail and pearl millet, and cash 
crops, viz. cotton, turmeric, sugarcane, groundnut, and vegetables. To ensure financial and economic 
viability of member farmers, SoFA advises crop production as per market demand, ensures that no 
member grows the same crops, guarantees variety for the end-customers. The members have diversified 
into production and marketing of millet-based cookies, health-mixes, roasted powders, papads, etc., 
which is sourced by 40 retail outlets, enabling an outlet turnover of a minimum of rs 50,000/month. 
SoFA has diversified into ancillary agri-business too, viz., organic fertilisers and are running plant 
nurseries and bio-compost units with a collective turnover of rs 25 lakh a year. 
Source: Sittilingi Organic Farmers Association (SOFA, available at https://www.sofasittilingi.org)
19 July 2023
to identify ways and means to finance its activities. 
To make societies commercially viable and vibrant, 
strategic diversification is a must. ‘Strategy’, in the 
context of corporate entities, refers to its stated 
‘visions’ and ‘Missions’ . Strategic decisions are usually 
in congruence with the visions and missions of the 
organisation, and they flow downward towards the 
base levels of the organisation. Thus, in order to 
remain relevant and competitive, cooperatives from 
the community level to the national level need to 
diversify their businesses. 
viable Cooperative Business Strategies 
Cooperatives carry out businesses in all sectors. 
They need to firm up their vision and mission 
statements and frame the objectives and purposes 
for which these entities are formed. This information 
can help develop tactics for object diversification of 
businesses. Figure1 examines how a cooperative can 
diversify itself strategically by analysing five facets of 
strategic management. 
? y Initially, a cooperative should decide the exact 
nature of the goals it has and the various purposes 
behind which the goals will be outlined for their 
accomplishments.
? y Post-identification of the goals, a tactical 
understanding of the local situation would be 
required, followed by an internal and external 
environment assessment to conduct a Strength, 
Weakness, opportunity, and Threat (SWoT) 
analysis.
? y The next step is to formulate a strategy through 
which the goals can be achieved by means of 
reflection, prioritisation, and development of 
options for decision-making purposes. Then 
alternative options should be evaluated in order 
to form a strategy.
? y once the strategy is formulated, the person 
responsible for its achievement will be given 
charge of the available and allotted resources, 
personnel, and ways and means for achieving 
the strategy. They will have to put the chosen 
plans into practice, marshal the resources, and 
identify tactics through which the strategy can 
be implemented successfully.
? y The last step is to monitor the strategy against 
the agreed timeline/verification pattern to 
carry out a mid-term/periodic review about 
the success of activity intervention and take up 
corrective actions, if any.
Figure-1: Five facets of Strategic management
monitoring 
of the 
Strategy
Goal 
Setting
Goal 
a nalysis
Formulation 
of the 
Strategy
implementation 
of the Strategy
20 July 2023
t able 1: Diversification Decisions of Cooperatives 
t ypes Ways of Diversification
product 
Diversification
Cooperatives can diversify their product/service offerings to meet 
the needs of new markets or due to change in customer tastes and 
preferences. For example, Amul – one of India’s largest and most 
successful dairy cooperatives, introduced ice creams and other 
frozen milk confectionaries in 1996, to spread its businesses.
Geographic 
Diversification
Cooperatives diversify their product offerings to reach new markets 
and customers to satisfy their needs. For example, ‘Nandini g oodlife’ , 
a milk brand owned by the Karnataka Milk Federation, has been 
made available across various states in India in leading retailers as 
part of the strategic objectives of the entity to make its presence felt 
in various parts of the country.
Service 
Diversification
Cooperatives offer new services, apart from their primary products 
and services, to meet the needs of their members and customers. 
For example, the Anjarakandi urban Cooperative Bank in Kerela, 
apart from their primary products and services based on banking, 
sells coconut-based products such as copra, coconut water/milk/oil.
Joint ventures
Cooperatives can form Joint ventures (Jvs) to pool resources and 
expertise. For example, a cooperative that produces agricultural 
products could constitute a joint venture with a technology company 
to develop new precision farming technologies. Indian Farmers 
Fertiliser Cooperative Limited (IFFCo) – a fertiliser-producing 
cooperative, formed a Jv with Spain’s Congelados De Navarra to set 
up a food processing plant at Ludhiana in Punjab.
vertical 
integration
Cooperatives can vertically integrate by including upstream or 
downstream activities from their current operations. For example, a 
dairy cooperative could start producing animal feed. It can be seen 
in Jvs such as the Amreli District Cooperative Milk Producers union 
entering into a Jv with IFFCo Kisan Sanchar for the supply of high-
quality animal feed.
horizontal 
integration
Cooperatives can horizontally integrate their operations by merging 
with or acquiring other cooperatives or companies operating in the 
same industry, which can result in the achievement of significant 
economies of scale giving various benefits to their customers and 
stakeholders. For example, the Mumbai based Non-Bank Finance 
Company (NBFC) firm, Centrum Finance Ltd. acquired the Punjab 
and Maharashtra Cooperative Bank, to tap into the markets covered 
by the Bank.
Figure-2: Competitive a dvantage through Strategic Diversification
Page 5


17 July 2023
riginated in the last quarter of the  
19
th
 century, the Indian cooperative 
movement registered smooth and 
impressive progress until the 1970s. Certain 
issues started crippling the whole movement, and 
policy makers and planners slowly reduced their focus 
on cooperation-led socio-economic development. 
O
The inherent growth potential of cooperation needed 
an immediate and renewed policy attention. At this 
juncture, for Sahakarita se Samriddhi, the Ministry 
of Cooperation was formed with a renewed focus 
at cascading the movement down to the grassroots 
through acts of cooperation. This aims to realise the 
dream of Atmanirbhar Bharat. and to enable the 
Dr manisha paLiwaL the author is Professor, Sri Balaji University, Pune, Maharashtra. email: mnpaliwal@gmail.com
Cooperation is entrenched in the philosophy of India. The clarion call of 
India’s Prime Minister – Sahakarita se Samriddhi witnessed creation of the 
Ministry of Cooperation on 6 July 2021 to provide a distinct administrative, 
legal, and policy agenda for reviving, reorganising, and modernising 
cooperatives. The need of the time is to empower cooperatives to compete 
on par with corporate business entities. In order to remain relevant and 
competitive, cooperatives from the community level to the national level 
need to diversify their businesses. 
strategiC DiversiFiCatioN 
oF Cooperatives aND  
BusiNess Competitive Ness
FOCUS
18 July 2023
proFit multiplier through BusiNess DiversiFiCatioN
members of the cooperatives to make their own 
decisions and destiny without fear or influence from 
any outside party. The movement has witnessed the 
registration of 8.54 lakh cooperative societies with 
29 crore members in the country. The need of the 
time is to empower cooperatives to compete on par 
with corporate business entities. India’s cooperative-
led economic model suffered due to several limiting 
issues, viz. accountability and governance aspects, in-
house vested interests, lack of coordination, political 
interference, and lack of diversification. 
need for Business Diversification
Any business to remain commercially viable, has 
to look beyond its primary customers and markets. 
It has to explore potential markets for new products 
and services. Without diversification, stagnation 
sets in, which impedes the business’s future growth. 
Further, strategic diversification forces a business to 
take steps that can ensure its relevance in the market, 
as investments made in research and development, 
marketing, product development, etc., can cause 
a business to identify customers whose needs are 
not fulfilled yet and to identify blue ocean markets, 
enabling it to earn profit and wealth in the long run.
Business Diversification by Cooperatives
An entity is stated to be in business if it is 
engaged in commercial, industrial, and professional 
activities with the objective of making profits. A 
cooperative being a legally incorporated structural 
entity, follows the in-built principles of cooperation 
and serves the interests of its members. Cooperatives 
as business entities, can be profit-sharing enterprises 
or non-profit entities. They serve their members 
by providing goods and services that may be 
unavailable or too costly to access as individuals. A 
cooperative society needs funds to function. It has 
In Sittilingi – a tribal village of Dharmapuri district of Tamil Nadu, 500+ members joined hands to form 
Sittilingi organic Farmers Association (SoF A) as a cooperative society in 2004. With a per capita minimum 
size of 2.5 acre land holdings, members cultivate ragi, bajra, little millet, foxtail and pearl millet, and cash 
crops, viz. cotton, turmeric, sugarcane, groundnut, and vegetables. To ensure financial and economic 
viability of member farmers, SoFA advises crop production as per market demand, ensures that no 
member grows the same crops, guarantees variety for the end-customers. The members have diversified 
into production and marketing of millet-based cookies, health-mixes, roasted powders, papads, etc., 
which is sourced by 40 retail outlets, enabling an outlet turnover of a minimum of rs 50,000/month. 
SoFA has diversified into ancillary agri-business too, viz., organic fertilisers and are running plant 
nurseries and bio-compost units with a collective turnover of rs 25 lakh a year. 
Source: Sittilingi Organic Farmers Association (SOFA, available at https://www.sofasittilingi.org)
19 July 2023
to identify ways and means to finance its activities. 
To make societies commercially viable and vibrant, 
strategic diversification is a must. ‘Strategy’, in the 
context of corporate entities, refers to its stated 
‘visions’ and ‘Missions’ . Strategic decisions are usually 
in congruence with the visions and missions of the 
organisation, and they flow downward towards the 
base levels of the organisation. Thus, in order to 
remain relevant and competitive, cooperatives from 
the community level to the national level need to 
diversify their businesses. 
viable Cooperative Business Strategies 
Cooperatives carry out businesses in all sectors. 
They need to firm up their vision and mission 
statements and frame the objectives and purposes 
for which these entities are formed. This information 
can help develop tactics for object diversification of 
businesses. Figure1 examines how a cooperative can 
diversify itself strategically by analysing five facets of 
strategic management. 
? y Initially, a cooperative should decide the exact 
nature of the goals it has and the various purposes 
behind which the goals will be outlined for their 
accomplishments.
? y Post-identification of the goals, a tactical 
understanding of the local situation would be 
required, followed by an internal and external 
environment assessment to conduct a Strength, 
Weakness, opportunity, and Threat (SWoT) 
analysis.
? y The next step is to formulate a strategy through 
which the goals can be achieved by means of 
reflection, prioritisation, and development of 
options for decision-making purposes. Then 
alternative options should be evaluated in order 
to form a strategy.
? y once the strategy is formulated, the person 
responsible for its achievement will be given 
charge of the available and allotted resources, 
personnel, and ways and means for achieving 
the strategy. They will have to put the chosen 
plans into practice, marshal the resources, and 
identify tactics through which the strategy can 
be implemented successfully.
? y The last step is to monitor the strategy against 
the agreed timeline/verification pattern to 
carry out a mid-term/periodic review about 
the success of activity intervention and take up 
corrective actions, if any.
Figure-1: Five facets of Strategic management
monitoring 
of the 
Strategy
Goal 
Setting
Goal 
a nalysis
Formulation 
of the 
Strategy
implementation 
of the Strategy
20 July 2023
t able 1: Diversification Decisions of Cooperatives 
t ypes Ways of Diversification
product 
Diversification
Cooperatives can diversify their product/service offerings to meet 
the needs of new markets or due to change in customer tastes and 
preferences. For example, Amul – one of India’s largest and most 
successful dairy cooperatives, introduced ice creams and other 
frozen milk confectionaries in 1996, to spread its businesses.
Geographic 
Diversification
Cooperatives diversify their product offerings to reach new markets 
and customers to satisfy their needs. For example, ‘Nandini g oodlife’ , 
a milk brand owned by the Karnataka Milk Federation, has been 
made available across various states in India in leading retailers as 
part of the strategic objectives of the entity to make its presence felt 
in various parts of the country.
Service 
Diversification
Cooperatives offer new services, apart from their primary products 
and services, to meet the needs of their members and customers. 
For example, the Anjarakandi urban Cooperative Bank in Kerela, 
apart from their primary products and services based on banking, 
sells coconut-based products such as copra, coconut water/milk/oil.
Joint ventures
Cooperatives can form Joint ventures (Jvs) to pool resources and 
expertise. For example, a cooperative that produces agricultural 
products could constitute a joint venture with a technology company 
to develop new precision farming technologies. Indian Farmers 
Fertiliser Cooperative Limited (IFFCo) – a fertiliser-producing 
cooperative, formed a Jv with Spain’s Congelados De Navarra to set 
up a food processing plant at Ludhiana in Punjab.
vertical 
integration
Cooperatives can vertically integrate by including upstream or 
downstream activities from their current operations. For example, a 
dairy cooperative could start producing animal feed. It can be seen 
in Jvs such as the Amreli District Cooperative Milk Producers union 
entering into a Jv with IFFCo Kisan Sanchar for the supply of high-
quality animal feed.
horizontal 
integration
Cooperatives can horizontally integrate their operations by merging 
with or acquiring other cooperatives or companies operating in the 
same industry, which can result in the achievement of significant 
economies of scale giving various benefits to their customers and 
stakeholders. For example, the Mumbai based Non-Bank Finance 
Company (NBFC) firm, Centrum Finance Ltd. acquired the Punjab 
and Maharashtra Cooperative Bank, to tap into the markets covered 
by the Bank.
Figure-2: Competitive a dvantage through Strategic Diversification
21 July 2023
Strategic Diversification of Cooperatives
Cooperatives have to decide (as per the model 
in Figure 1) about the ways for their diversification in 
order to achieve their strategic objectives as decided 
by the stakeholders by means of alternative ways of 
diversification (Table 1). Cooperatives can attain their 
goals regarding business competitiveness through 
strategic diversification (Figure 2).
Conclusion
The Minister of Cooperation has repeatedly 
emphasised the potential of the community-led 
cooperative economic development model from 
various platforms. The union government has 
rightly displayed its noble intent to strengthen the 
existing primary cooperatives, revive the defunct 
ones, and create at least 2 lakh additional primary 
level cooperatives in India during the next 4 to 5 
years. The Ministry of Cooperation, under the able 
guidance of the Minister, needs to ensure attaining 
competitive advantage of cooperatives through 
strategic diversification. This requires a careful 
analysis of information about the strengths, mission, 
and values, as well as involvement and support 
from members throughout the process of strategic 
management. By leveraging the unique strengths 
and capabilities of cooperatives and aligning 
diversification opportunities with its mission 
and values, cooperatives can drive growth and 
competitive advantage in new markets and product 
lines. Strategic diversification can aid cooperatives 
in India in growing their customer base, reducing 
their dependence on specific markets, and better 
serving their members’ requirements.  If the 
cooperatives can meet the demands of markets, 
they will have a greater chance of being relevant 
in the target market. In the long run, it may aid 
in developing  strategic advantage and position, 
thereby helping cooperatives actualise business 
profits with inclusiveness through strategic 
diversification of their activities.                                   ?
(Views expressed are personal)
WomeN empoWermeNt through CooperatioN
Mann Deshi – a women-centric micro-enterprise cooperative organisation headquartered at Mhaswad 
of Maharashtra, was founded in 1997. The objective was to empower rural women by socially mobilising 
them into women cooperative entrepreneurs through financial literacy, business skill-development. and 
access to timely, adequate and affordable financial services. Since inception, it has provided loans worth 
over rs 2,000 crore and training to over 4,00,000 women entrepreneurs in rural Maharashtra. Through its 
mobile ATMs, over 300 villages in Maharashtra are now accessing timely credit services. To support women 
entrepreneurs, it offers various programmes and services – microfinance, vocational training, business 
development, and market linkages. It has expanded its operations beyond banking to include a rural BPo 
with over 250 rural women, a community radio station with over 4 million listeners, and it has set up over 
50 business schools and training centres. Mann Deshi’s impact extends beyond economic empowerment, 
as it has increased social status and improved access to education and healthcare of its members. This is a 
pioneering organisation helping to transform the lives of rural women in India by providing them with the 
ways and means to become successful entrepreneurs and leaders in their communities.
Source: Mann Deshi Bank and Foundation (available at https://manndeshifoundation.org)