Description
It describes about Industry Trends of indian bakery sector, PEST Analysis of bread & biscuit industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Britannia, it's Finance performance, SWOT analysis of Britannia and Various Strategies employed.
Britannia company analysis:
I. 1. Industry trends:
?
Industry Analysis:
?
?
?
? ?
“Tata Strategic Management Group”, reports “The Indian bakery sector consists of some of the large food categories like breads, biscuits, cakes etc. The branded packaged segment in this sector had a size of Rs 17,000 crore in FY2012 and is expected to grow at 13-15% in the next 3-4 years. Within biscuits, 3-4 large-sized players viz. Britannia, Parle, ITC, Cadburys comprise three-fourths of the market. India is the second largest manufacturer of biscuits, after USA. It can be classified under two sectors namely: organized and unorganized. Bread and biscuits are major products of the industry and covers about three- fourth of the industry. The Indian bakery market is changing lately because of the availability of better ingredients from chocolate, flavors, toppings. Also products of international standard are coming to India. Number of players is increasing. More and more foreign companies are coming to India to set up a high end consumer market segment. Market is witnessing product innovation due to the competition in market with many players are providing nutritious and healthy products with low sugar, made of natural and organic products. Bakery joints like slowly becoming popular hangout places. The focus is now on speed and versatility according to consumer demands. “Global Industry Analysts Inc”. stated that the global bakery products market was forecast to reach US$410 billion in 2015
2. PEST Analysis of the industry:
? Political Aspect ? Govt. of India has decided to implement FSSA regulation for standardization of packaging.
?
?
FSSA is an important regulation for bakery. Bread and Biscuits will be packed only in standard pack sizes. Relaxation of packing non standard sizes will be removed. The implications of the packaging norms will have far reaching impact with many players have indicated an implication on pricing.
? Economical
? ? ?
Today, the Indian consumer is more discerning about taste and quality, while still considering value for money. Inflation, packing rules to affect the pricing structure. The bakery industry has been affected by high costs of production & increase in raw material costs. Intense price pressure in the bakery products market is also creating challenge for the manufacturers.
? Social
?
?
The market size in the Western markets for premium cookie players higher than that of Indian Market. As the standard of living is improving in India, the demand for premium cookie market is increasing. Many International players are trying to tap this space. Consumers are more focused on their calorific intake, weight and health. This is leading market innovation of cookies with low GI, low trans fat, etc.
? Technological ?
? ? ?
High quality packing is also attracting the customers. Health and wellness trend is playing a major role in most categories, where players are bringing healthier products. Britannia's NutriChoice has introduced its range of ragi, oats and 5 grain biscuits. In breads the whole wheat bread segment is coming. While on the other end products like Cadburys Oreo and Sunfeast's Dark Fantasy Chocolate are entering into the market.
3. Competitor Analysis: ? Cut throat competition
?
The competition in the market players is acute. Like similar products
?
are available in the market, United Biscuits McVitie’s brand, GlaxoSmithKline Consumer Healthcare Horlicks biscuits of various ranges, Britannia’s NutriChoice range of biscuits with diabetic options, ITC has Marie Light and Marie Light Orange. Due to the market pressure the players are under tremendous financial pressure.
? Parle is dominant in glucose biscuits ? Parle holds the market share in volumes in the biscuits market. Parle has a dominant share in the glucose biscuits category. Parle has one advantage. Its Parle G is the highest selling biscuit in the world by volume. This gives the company enormous pricing power vis-à-vis its competitors. ? Rural markets leave scope for expansion ? Rural markets account for 50% of biscuit sales in India. Here regional brands like Priyagold, Cremica and Anmol dominate. Britannia Industries derives only 30% of its revenues from rural India. There is a vast scope for the improvement of sales for the company if it targets rural markets. Per capita consumption of biscuits is 2 kg per annum in India as compared to 10 kg per annum in Western countries. (“Tata Strategic Management Group”, reports) ? Products range of major players in the market PARLE Cream Kreams, Hide and seek, Hide and seek milano, Chox, Parle g, Hide and seek bourbon Parle marie, BRITANNIA Tiger chocolate, Pure magic SUNFEAST Dark Fantasy, Sunfeast Dream Cream, Special Creams Sunfeast Glucose Bourbon Sunfeast Marie PRIYAGOLD Classic cream, Kids cream,
Glucose/energy Bourbon Marie
Tiger, brittania Tiger banana, Bourbon Marie gold
Don Bourbon Marie lite
Light Nutrition Nutri choice, Nutria choice sugar out, Milk bikis 50-50 Sunfeast Benne Vita Flaxseed Biscuits Sunfeast Milky Magic Sunfeast Snacky, Sunfeast sweet 'n salt Sunfeast Golden Bakery, Sunfeast Nice, Special Cookies Sunfeast Golden Bakery, Sunfeast Nice, Special Cookies -
Milk Salty / Sweet and salty Digestive
Milk shakti Krack jack, Monaco Parle actifit Digestive marie,
Big boss, Magic gold CNC, Snacks zig zag, Chatpatta -
Nutrichoice digestive biscuits
Butter/Cocoa/Ca shew
20-20 cookies, Magix
GoodDay, Little hearts,
Butter Bite, Cheese cracker, Coconut crunch, Cheez bit classic salt
4. SWOT Analysis: ? STRENGTHS ? ? ? ? WEAKNESS ? ? ? ? ? OPPORTUNITIES ? ? ? ? ? Food Retailing in India Growing Consumption of biscuits Bakery potential in Rural India Expanding attractiveness of coffee bars Bakery Café Large share of un-organized players Dependence on one major raw material Sensitive to commodity price fluctuations Fragmented Cold Chain Supply Abundant raw material Part of a bigger pie Low Capital Requirements
? ? THREATS ? ? ?
Exploding Middle class Rising Prices Technology Up gradation Scarcity of Skilled Human Resource
Britannia Industries
1. Company description:
?
?
Britannia Industry operates in the bakery segment in India. Britannia has 35% share in the biscuits market with brands like Good Day, Tiger, Treat, 50-50 and NutraChoice. Biscuits are the largest category in branded foods. Other products offered in the segments like Dairy, Cakes, Bread, Rusk. Apart from this Britannia have subsidiaries like: Britannia Dairy Private Limited (BDPL), Daily Bread Gourmet Foods (India) Private Limited (Daily Bread), Strategic Food International Co. LLC, Dubai (SFIC). Britannia, with a total turnover of Rs 5,500 crore has total production capacity of 60,000 tonne per month of all range of items including biscuits, bread etc.
(Source: Director's Report for Britannia Industries Ltd. 2012) 2. General information about the company: ? In 1892, the biscuit company was started in house in Kolkata with an initial investment of Rs. 295. ? By 1910, with the advent of electricity, Britannia mechanized its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. ? In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm. ? The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). ? Four years later in 1983, it crossed the Rs. 100 crore revenue mark. ? In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market in 1999. ? Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country.
?
Share holding Patteren 30/06/2012 2.00 Share holding
Share holding pattern as on : Face value
Share holding pattern as on : Face value
30-06-12 2 No. Of Shares Promoter's holding % Holding 50.96 50.96
Foreign Promoters Sub total
60868345 60868345 Non promoter's holding Institutional investors
Banks Fin. Inst. and Insurance FII's Sub total Private Corporate Bodies Others Sub total General public Grand total
9421193 17972931 35802367 Other investors 2182838 20420 2203258 20576845 119450815
7.89 15.05 29.97 1.83 0.02 1.84 17.23 100
?
Board of Directors: ? In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Keki Dadiseth, Mr. Avijit Deb, Mr. Nimesh N Kampani and Mr. S S Kelkar, Directors, retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.
?
Currently the management structure of the company is as follows: ? Managing Director :Vinita Bali ? VP & Chief Operating Officer :Neeraj Chandra ? VP & Chief of Human Resources :Shreekanth K. Arimanithaya ? VP – Office of Strategy development ? and New Business Development :Vinod Menon ? Chief Financial Officer :Raju Thomas ? VP - Supply Chain :Vinay Singh Kushwaha ? Vinita Bali, managing director of Britannia Industries, is among 27 global leaders appointed by the United Nations to help improve maternal and child nutrition, an investment which some of the world's leading economists believe would be the most valuable for human well-being and productivity. ? The total number of employees in Britannia is around 2400. ? During the year company won several prestigious awards like: ? IMC Ramakrishna Bajaj Award for performance excellence for 4 factories in Delhi, Gwalior, Khopoli and Bangalore. ? CII National Food Safety Award for Delhi factory. ? Britannia was once again rated the "Most Trusted Food Brand" by consumers across India and achieved the #1 position in the survey done by AC Nielsen for The Economic Times. 3. Financial performance of the company: ? Director's Report for Britannia Industries Ltd. (http://economictimes.indiatimes.com/britannia-industries-ltd/finishedproducts/companyid13934.cms) Financial results for the year ending on 31st Mar’12 (In Crore Rupees)
Particulars Sale of Products Other Operating Revenues Other Income Profit from Operations Profit Before Tax Less: Tax Net Profit
?
Year ended 31 March 12 5,005.66 27.15 58.53 231.91 252.37 65.63 186.74
Year ended 31 March 11 4,230.59 25.20 48.92 186.89 198.06 52.77 145.29
Product mix with sales quantity & value along with percentage contribution from each individual product for Britannia Industries Ltd. UNITS Metric Tonnes N/A N/A N/A N/A INSTALLED CAPACITY 152100 PRODUCTION QUANTITY 489418 SALES QUANTITY 554336 SALES VALUE (Rs Cr.) 3604.1252
PRODUCT NAME Biscuits & High Protein Food Bread Cakes Others Cake & Rusk
0 0 0 0
123354 5592 0 0
123735 17218 0 0
408.0726 193.6193 40.1634 0
(http://economictimes.indiatimes.com/britannia-industriestd/finishedproducts/companyid-13934.cms) ? In the challenging market and continuing inflation, profit from operations increased 24.1%, from Rs. 186.89 crores to Rs. 231.91 crores. ? Britannia held overall share one-third of the biscuit market. It is strengthened its position in other bakery products like bread, dairy, cake & rusk. ? Its sales grow to 5,005.66 grew 18.3% over the last year. Earnings per Share Rs. 15.63 compared t last years Rs. 12.16. ? SWOT Analysis: ? STRENGTHS ? New and different varieties of Cakes and Pastry have been introduced
?
?
?
?
?
which shall give us the benefit of product differentiation. . Location of Our Bakery will be placed in such an area which can be easily accessible from all part of Delhi. 4 manufacturing units were given the prestigious IMC Ramakrishna Bajaj National performance Excellence Award in the manufacturing category Experienced staff is hired who is expertise staff and helps us in providing quality food and service to our customer. Ambience of place and the feeling of being in their native place while enjoying their food is itself a pleasure experience which gives us an advantage over others. Sensing competition, Britannia Industries has launched 25 new categories or variations in the last one year to tackle competition
? Weakness ? The company spends around 7-8% of its revenues towards advertising and promotion of its products. This is among the lowest levels in the industry. The operating margins remained weak. While the company managed to maintain the operating margin at 6%, it is significantly lower than the industry operating margins of 16%.
?
? Opportunities ? ?
?
?
?
?
India, world’s largest biscuits market by volume The company probably has to increase its investments towards branding its products to push its volumes. Roll out new range of breads, including multi-fiber, multi grain, whole wheat and honey oats, as it seeks to strengthen its presence in healthy food market of Rs 5,500 crore. Product and services expansion: Extension into categories such as specialty bread, milk, cereals, cakes and other snacking categories Rural markets account for 50% of biscuit sales in India. The rural market is growing at 25% p.a. Here regional brands like Priyagold, Cremica and Anmol dominate. Britannia Industries derives only 30% of its revenues from rural India. Boost sales with aggressive brand building strategies
? Threats We expect competitive intensity to increase as players like Parle, ITC and Cadbury try to increase market share in the high-margin premium creams and cookies segment. ? Very high competition in the health oriented markets. ? Extension into categories such as specialty bread, milk, cereals, cakes and other snacking categories has also meant it competes with companies such as GCMMF's Amul, Danone, PepsiCo and Kellogg's in certain segments. ? Britannia’s Good Day enjoyed a market share of 33% in the cookies market. But now it has come down to 28% in the last four years. Parle’s Hide & Seek is giving a touch competition to Britannia Industries’ Good Day ? Britannia Industries are facing the effects of severe food inflation. Prices of sugar, milk, floor and dairy products have skyrocketed. 4. Various strategies employed by the company in the course of conducting business (in the form of alliances, joint ventures, product innovation/ expansion strategies, acquisitions/ divestitures and any such strategies that you think may affect the business of the company) in past 2 years. 5. (Make intelligent use of above points while trying to understand the strategies used by the company) 6. a. Hierarchical: At the corporate level, business unit level and functional or department level of the firm 7. b. Business Division: According to various products, divisions, markets, etc. 8. c. Regional: Strategies devised as per regions, geographies, etc.
?
The company used strategy of product innovation and product mix to tackle the intense competition in the market. The ? Product innovation ? Britannia NutriChoice Oat Cookies ? Britannia NutriChoice Ragi Cookies ? Britannia Veg Cakes ? Nutrichoice Health Starter Kit ? Britannia NutriChoice 5 Grain ? Tiger Banana ? NutriChoice Sugar Out: Litetime, Chocolate cream, and Orange cream
? ? ? ? ?
NutriChoice Digestive Biscuit Treat Fruit Rollz: Juicy Apple, Strawberry Surprise, Tangy Orange and Delicious Dates New Britannia Milk Bikis
Some of the unique marketing propositions done by Britannnia:
?
?
?
?
?
?
?
Simple insight of packaging like packaging the product with vertical logo on one side and a horizontal logo on another helped the brand in the supermarkets, as the space restriction were taken into consideration while displaying the product. Design of the Biscuit packets for having them on the go, Britannia designed the packets having smaller packets inside with unique designs of elliptical shapes. Moreover the larger packets were sealable for easy handling. Even the protective plastic cup inside the biscuits packing was designed by Britannia. This was quite a successful model which was replicated over the industry. Through the clutter the design to make a difference w The Britannia launched NutriChoice biscuit in consideration with the future competition as the market trend is changing from not so concered people about the Nutriotion value, sugar content etc. In anticipation of the market segment of health cautious us people. “Eat Healthy. Think Better.” Not only has it removed trans fats from all its biscuits, but also half the biscuits it produces—including its best-known Marie and Tiger brands—are fortified with iron, vitamins and minerals. It has also introduced a range of healthier items, including cookies for diabetics. “Innovation has fueled our growth,” says Bali Managing Director Vinita said, “the idea of producing fortified biscuits for the domestic market. In a country where child malnutrition is rampant—42% of India’s children under 5 years of age are undernourished, according to a recent study—there’s a crying need, she insists, “to find food-based solutions.” It would soon roll out new range of breads, including multi-fiber, multi grain, whole wheat and honey oats, as it seeks to strengthen its
?
?
? ?
? ?
presence in healthy food market of Rs 5,500 crore. New range of our bread in healthy range will be multi-fiber, multi grain, whole wheat and honey oats will soon be launched in the country," company's Category Director Health and Wellness, Anuradha Narasimhan. Country's total bread market stands at Rs 1,300 crore and Britannia claimed to have 50% market share of it. In later part of 2010-11, capacity was added in several existing manufacturing units while two new units at Hajipur in Bihar and Khurda in Orissa were commissioned. “THE EAT HEALTHY THINK BETTER” Strategy: Products up to the credo. Removed trans-fat from all the products, Added micro nutrients, 20mill packs sold everyday out of which 10mill are fortified with micronutrients Dairy portfolio enhanced for superior market mix to compete in the market. New investment plans Green field operation in Patana Plant Orissa factory is being setup to cater the higher demand of biscuits Extended and augmented the capacity in existing units as well
doc_269259473.doc
It describes about Industry Trends of indian bakery sector, PEST Analysis of bread & biscuit industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Britannia, it's Finance performance, SWOT analysis of Britannia and Various Strategies employed.
Britannia company analysis:
I. 1. Industry trends:
?
Industry Analysis:
?
?
?
? ?
“Tata Strategic Management Group”, reports “The Indian bakery sector consists of some of the large food categories like breads, biscuits, cakes etc. The branded packaged segment in this sector had a size of Rs 17,000 crore in FY2012 and is expected to grow at 13-15% in the next 3-4 years. Within biscuits, 3-4 large-sized players viz. Britannia, Parle, ITC, Cadburys comprise three-fourths of the market. India is the second largest manufacturer of biscuits, after USA. It can be classified under two sectors namely: organized and unorganized. Bread and biscuits are major products of the industry and covers about three- fourth of the industry. The Indian bakery market is changing lately because of the availability of better ingredients from chocolate, flavors, toppings. Also products of international standard are coming to India. Number of players is increasing. More and more foreign companies are coming to India to set up a high end consumer market segment. Market is witnessing product innovation due to the competition in market with many players are providing nutritious and healthy products with low sugar, made of natural and organic products. Bakery joints like slowly becoming popular hangout places. The focus is now on speed and versatility according to consumer demands. “Global Industry Analysts Inc”. stated that the global bakery products market was forecast to reach US$410 billion in 2015
2. PEST Analysis of the industry:
? Political Aspect ? Govt. of India has decided to implement FSSA regulation for standardization of packaging.
?
?
FSSA is an important regulation for bakery. Bread and Biscuits will be packed only in standard pack sizes. Relaxation of packing non standard sizes will be removed. The implications of the packaging norms will have far reaching impact with many players have indicated an implication on pricing.
? Economical
? ? ?
Today, the Indian consumer is more discerning about taste and quality, while still considering value for money. Inflation, packing rules to affect the pricing structure. The bakery industry has been affected by high costs of production & increase in raw material costs. Intense price pressure in the bakery products market is also creating challenge for the manufacturers.
? Social
?
?
The market size in the Western markets for premium cookie players higher than that of Indian Market. As the standard of living is improving in India, the demand for premium cookie market is increasing. Many International players are trying to tap this space. Consumers are more focused on their calorific intake, weight and health. This is leading market innovation of cookies with low GI, low trans fat, etc.
? Technological ?
? ? ?
High quality packing is also attracting the customers. Health and wellness trend is playing a major role in most categories, where players are bringing healthier products. Britannia's NutriChoice has introduced its range of ragi, oats and 5 grain biscuits. In breads the whole wheat bread segment is coming. While on the other end products like Cadburys Oreo and Sunfeast's Dark Fantasy Chocolate are entering into the market.
3. Competitor Analysis: ? Cut throat competition
?
The competition in the market players is acute. Like similar products
?
are available in the market, United Biscuits McVitie’s brand, GlaxoSmithKline Consumer Healthcare Horlicks biscuits of various ranges, Britannia’s NutriChoice range of biscuits with diabetic options, ITC has Marie Light and Marie Light Orange. Due to the market pressure the players are under tremendous financial pressure.
? Parle is dominant in glucose biscuits ? Parle holds the market share in volumes in the biscuits market. Parle has a dominant share in the glucose biscuits category. Parle has one advantage. Its Parle G is the highest selling biscuit in the world by volume. This gives the company enormous pricing power vis-à-vis its competitors. ? Rural markets leave scope for expansion ? Rural markets account for 50% of biscuit sales in India. Here regional brands like Priyagold, Cremica and Anmol dominate. Britannia Industries derives only 30% of its revenues from rural India. There is a vast scope for the improvement of sales for the company if it targets rural markets. Per capita consumption of biscuits is 2 kg per annum in India as compared to 10 kg per annum in Western countries. (“Tata Strategic Management Group”, reports) ? Products range of major players in the market PARLE Cream Kreams, Hide and seek, Hide and seek milano, Chox, Parle g, Hide and seek bourbon Parle marie, BRITANNIA Tiger chocolate, Pure magic SUNFEAST Dark Fantasy, Sunfeast Dream Cream, Special Creams Sunfeast Glucose Bourbon Sunfeast Marie PRIYAGOLD Classic cream, Kids cream,
Glucose/energy Bourbon Marie
Tiger, brittania Tiger banana, Bourbon Marie gold
Don Bourbon Marie lite
Light Nutrition Nutri choice, Nutria choice sugar out, Milk bikis 50-50 Sunfeast Benne Vita Flaxseed Biscuits Sunfeast Milky Magic Sunfeast Snacky, Sunfeast sweet 'n salt Sunfeast Golden Bakery, Sunfeast Nice, Special Cookies Sunfeast Golden Bakery, Sunfeast Nice, Special Cookies -
Milk Salty / Sweet and salty Digestive
Milk shakti Krack jack, Monaco Parle actifit Digestive marie,
Big boss, Magic gold CNC, Snacks zig zag, Chatpatta -
Nutrichoice digestive biscuits
Butter/Cocoa/Ca shew
20-20 cookies, Magix
GoodDay, Little hearts,
Butter Bite, Cheese cracker, Coconut crunch, Cheez bit classic salt
4. SWOT Analysis: ? STRENGTHS ? ? ? ? WEAKNESS ? ? ? ? ? OPPORTUNITIES ? ? ? ? ? Food Retailing in India Growing Consumption of biscuits Bakery potential in Rural India Expanding attractiveness of coffee bars Bakery Café Large share of un-organized players Dependence on one major raw material Sensitive to commodity price fluctuations Fragmented Cold Chain Supply Abundant raw material Part of a bigger pie Low Capital Requirements
? ? THREATS ? ? ?
Exploding Middle class Rising Prices Technology Up gradation Scarcity of Skilled Human Resource
Britannia Industries
1. Company description:
?
?
Britannia Industry operates in the bakery segment in India. Britannia has 35% share in the biscuits market with brands like Good Day, Tiger, Treat, 50-50 and NutraChoice. Biscuits are the largest category in branded foods. Other products offered in the segments like Dairy, Cakes, Bread, Rusk. Apart from this Britannia have subsidiaries like: Britannia Dairy Private Limited (BDPL), Daily Bread Gourmet Foods (India) Private Limited (Daily Bread), Strategic Food International Co. LLC, Dubai (SFIC). Britannia, with a total turnover of Rs 5,500 crore has total production capacity of 60,000 tonne per month of all range of items including biscuits, bread etc.
(Source: Director's Report for Britannia Industries Ltd. 2012) 2. General information about the company: ? In 1892, the biscuit company was started in house in Kolkata with an initial investment of Rs. 295. ? By 1910, with the advent of electricity, Britannia mechanized its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. ? In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm. ? The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). ? Four years later in 1983, it crossed the Rs. 100 crore revenue mark. ? In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market in 1999. ? Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country.
?
Share holding Patteren 30/06/2012 2.00 Share holding
Share holding pattern as on : Face value
Share holding pattern as on : Face value
30-06-12 2 No. Of Shares Promoter's holding % Holding 50.96 50.96
Foreign Promoters Sub total
60868345 60868345 Non promoter's holding Institutional investors
Banks Fin. Inst. and Insurance FII's Sub total Private Corporate Bodies Others Sub total General public Grand total
9421193 17972931 35802367 Other investors 2182838 20420 2203258 20576845 119450815
7.89 15.05 29.97 1.83 0.02 1.84 17.23 100
?
Board of Directors: ? In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Keki Dadiseth, Mr. Avijit Deb, Mr. Nimesh N Kampani and Mr. S S Kelkar, Directors, retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.
?
Currently the management structure of the company is as follows: ? Managing Director :Vinita Bali ? VP & Chief Operating Officer :Neeraj Chandra ? VP & Chief of Human Resources :Shreekanth K. Arimanithaya ? VP – Office of Strategy development ? and New Business Development :Vinod Menon ? Chief Financial Officer :Raju Thomas ? VP - Supply Chain :Vinay Singh Kushwaha ? Vinita Bali, managing director of Britannia Industries, is among 27 global leaders appointed by the United Nations to help improve maternal and child nutrition, an investment which some of the world's leading economists believe would be the most valuable for human well-being and productivity. ? The total number of employees in Britannia is around 2400. ? During the year company won several prestigious awards like: ? IMC Ramakrishna Bajaj Award for performance excellence for 4 factories in Delhi, Gwalior, Khopoli and Bangalore. ? CII National Food Safety Award for Delhi factory. ? Britannia was once again rated the "Most Trusted Food Brand" by consumers across India and achieved the #1 position in the survey done by AC Nielsen for The Economic Times. 3. Financial performance of the company: ? Director's Report for Britannia Industries Ltd. (http://economictimes.indiatimes.com/britannia-industries-ltd/finishedproducts/companyid13934.cms) Financial results for the year ending on 31st Mar’12 (In Crore Rupees)
Particulars Sale of Products Other Operating Revenues Other Income Profit from Operations Profit Before Tax Less: Tax Net Profit
?
Year ended 31 March 12 5,005.66 27.15 58.53 231.91 252.37 65.63 186.74
Year ended 31 March 11 4,230.59 25.20 48.92 186.89 198.06 52.77 145.29
Product mix with sales quantity & value along with percentage contribution from each individual product for Britannia Industries Ltd. UNITS Metric Tonnes N/A N/A N/A N/A INSTALLED CAPACITY 152100 PRODUCTION QUANTITY 489418 SALES QUANTITY 554336 SALES VALUE (Rs Cr.) 3604.1252
PRODUCT NAME Biscuits & High Protein Food Bread Cakes Others Cake & Rusk
0 0 0 0
123354 5592 0 0
123735 17218 0 0
408.0726 193.6193 40.1634 0
(http://economictimes.indiatimes.com/britannia-industriestd/finishedproducts/companyid-13934.cms) ? In the challenging market and continuing inflation, profit from operations increased 24.1%, from Rs. 186.89 crores to Rs. 231.91 crores. ? Britannia held overall share one-third of the biscuit market. It is strengthened its position in other bakery products like bread, dairy, cake & rusk. ? Its sales grow to 5,005.66 grew 18.3% over the last year. Earnings per Share Rs. 15.63 compared t last years Rs. 12.16. ? SWOT Analysis: ? STRENGTHS ? New and different varieties of Cakes and Pastry have been introduced
?
?
?
?
?
which shall give us the benefit of product differentiation. . Location of Our Bakery will be placed in such an area which can be easily accessible from all part of Delhi. 4 manufacturing units were given the prestigious IMC Ramakrishna Bajaj National performance Excellence Award in the manufacturing category Experienced staff is hired who is expertise staff and helps us in providing quality food and service to our customer. Ambience of place and the feeling of being in their native place while enjoying their food is itself a pleasure experience which gives us an advantage over others. Sensing competition, Britannia Industries has launched 25 new categories or variations in the last one year to tackle competition
? Weakness ? The company spends around 7-8% of its revenues towards advertising and promotion of its products. This is among the lowest levels in the industry. The operating margins remained weak. While the company managed to maintain the operating margin at 6%, it is significantly lower than the industry operating margins of 16%.
?
? Opportunities ? ?
?
?
?
?
India, world’s largest biscuits market by volume The company probably has to increase its investments towards branding its products to push its volumes. Roll out new range of breads, including multi-fiber, multi grain, whole wheat and honey oats, as it seeks to strengthen its presence in healthy food market of Rs 5,500 crore. Product and services expansion: Extension into categories such as specialty bread, milk, cereals, cakes and other snacking categories Rural markets account for 50% of biscuit sales in India. The rural market is growing at 25% p.a. Here regional brands like Priyagold, Cremica and Anmol dominate. Britannia Industries derives only 30% of its revenues from rural India. Boost sales with aggressive brand building strategies
? Threats We expect competitive intensity to increase as players like Parle, ITC and Cadbury try to increase market share in the high-margin premium creams and cookies segment. ? Very high competition in the health oriented markets. ? Extension into categories such as specialty bread, milk, cereals, cakes and other snacking categories has also meant it competes with companies such as GCMMF's Amul, Danone, PepsiCo and Kellogg's in certain segments. ? Britannia’s Good Day enjoyed a market share of 33% in the cookies market. But now it has come down to 28% in the last four years. Parle’s Hide & Seek is giving a touch competition to Britannia Industries’ Good Day ? Britannia Industries are facing the effects of severe food inflation. Prices of sugar, milk, floor and dairy products have skyrocketed. 4. Various strategies employed by the company in the course of conducting business (in the form of alliances, joint ventures, product innovation/ expansion strategies, acquisitions/ divestitures and any such strategies that you think may affect the business of the company) in past 2 years. 5. (Make intelligent use of above points while trying to understand the strategies used by the company) 6. a. Hierarchical: At the corporate level, business unit level and functional or department level of the firm 7. b. Business Division: According to various products, divisions, markets, etc. 8. c. Regional: Strategies devised as per regions, geographies, etc.
?
The company used strategy of product innovation and product mix to tackle the intense competition in the market. The ? Product innovation ? Britannia NutriChoice Oat Cookies ? Britannia NutriChoice Ragi Cookies ? Britannia Veg Cakes ? Nutrichoice Health Starter Kit ? Britannia NutriChoice 5 Grain ? Tiger Banana ? NutriChoice Sugar Out: Litetime, Chocolate cream, and Orange cream
? ? ? ? ?
NutriChoice Digestive Biscuit Treat Fruit Rollz: Juicy Apple, Strawberry Surprise, Tangy Orange and Delicious Dates New Britannia Milk Bikis
Some of the unique marketing propositions done by Britannnia:
?
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Simple insight of packaging like packaging the product with vertical logo on one side and a horizontal logo on another helped the brand in the supermarkets, as the space restriction were taken into consideration while displaying the product. Design of the Biscuit packets for having them on the go, Britannia designed the packets having smaller packets inside with unique designs of elliptical shapes. Moreover the larger packets were sealable for easy handling. Even the protective plastic cup inside the biscuits packing was designed by Britannia. This was quite a successful model which was replicated over the industry. Through the clutter the design to make a difference w The Britannia launched NutriChoice biscuit in consideration with the future competition as the market trend is changing from not so concered people about the Nutriotion value, sugar content etc. In anticipation of the market segment of health cautious us people. “Eat Healthy. Think Better.” Not only has it removed trans fats from all its biscuits, but also half the biscuits it produces—including its best-known Marie and Tiger brands—are fortified with iron, vitamins and minerals. It has also introduced a range of healthier items, including cookies for diabetics. “Innovation has fueled our growth,” says Bali Managing Director Vinita said, “the idea of producing fortified biscuits for the domestic market. In a country where child malnutrition is rampant—42% of India’s children under 5 years of age are undernourished, according to a recent study—there’s a crying need, she insists, “to find food-based solutions.” It would soon roll out new range of breads, including multi-fiber, multi grain, whole wheat and honey oats, as it seeks to strengthen its
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presence in healthy food market of Rs 5,500 crore. New range of our bread in healthy range will be multi-fiber, multi grain, whole wheat and honey oats will soon be launched in the country," company's Category Director Health and Wellness, Anuradha Narasimhan. Country's total bread market stands at Rs 1,300 crore and Britannia claimed to have 50% market share of it. In later part of 2010-11, capacity was added in several existing manufacturing units while two new units at Hajipur in Bihar and Khurda in Orissa were commissioned. “THE EAT HEALTHY THINK BETTER” Strategy: Products up to the credo. Removed trans-fat from all the products, Added micro nutrients, 20mill packs sold everyday out of which 10mill are fortified with micronutrients Dairy portfolio enhanced for superior market mix to compete in the market. New investment plans Green field operation in Patana Plant Orissa factory is being setup to cater the higher demand of biscuits Extended and augmented the capacity in existing units as well
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