strategic mgmt britania project

7/30/2019 strategic mgmt britania project

1/44

- 1 -

Introduction

Britannia, one of the premier food product company in India. Britannia started as a small biscuit

company in 1892 and has grown to a household name.

Britannia started its business in Calcutta (now Kolkata) with an initial investment of Rs. 295.

From thereon, Britannia's business flourished acquiring a reputation for quality and value.

Britannia Industries Ltd. has a number of awards and accolades in its name like:

Activities

Britannia product line includes biscuits, snacks, packed milk, cheese, butter, buttermilk and

yogurt. Britannia owns popular brands like:

-50.

Tiger Biscuits.

The Wadia Group (parent company of Britannia) along with Group Danone of France

has turned up to be an International FMCG Major specializing in Fresh Dairy Products, Bottled

Water and Biscuits/Cereals. One of the World leaders in the food industry, some of its

achievements are:


2/44

- 2 -

GROUPE DANONE three core business areas are Fresh Dairy Products, Beverages and

Biscuits and Cereal Products strives to improve the lives of people around the world by providing

them with better and value added food products. Its dominant position worldwide is based onmajor international brands and on its rock solid presence in local markets (about 70% of global

sales come from brands that are local market leaders.)

Performance

Britannia has registered a turnover of Rs 21,993 million for the year ended 31st

March 2006-07. Britannia has posted Net Profit to the tune of Rs 1076 million for the year ended

31st March 2006-07.

Introduced in 1998 with favors such as mint, orange and chocolate. But it did not really succeed in

capturing the consumers attention. So after a few years it was re launched with just one flavor i.e.

chocolate flavor with new packaging. After the re-launch it has started gaining attention of its

potential buyers and hence is in the growth stage of its life cycle. It has to fight for its stand in the

market since it faces competition from Britannias good-day Choc nuts.

Packaging and Labeling

The time spent by a customer for picking up a product from a retail outlet is a few seconds;therefore a package should appeal to a customer within such a small interval of time. In this, both

packaging & labeling play an important role in attracting customers both visually &

psychologically

Britannia -the 'biscuit' leader with a history-has withstood the tests of time. Part of the

reason for its success has been its ability to resonate with the changes in consumer needs-needs

that have varied significantly across its 100+ year epoch. With consumer democracy reaching new

levels, the one common thread to emerge in recent times has been the shift in lifestyles and a

corresponding awareness of health. People are increasingly becoming conscious of dietary care

and its correlation to wellness and matching the new pace to their lives with improved nutritional

and dietary habits. This new awareness has seen consumers seeking foods that complement their

lifestyles while offering convenience, variety and economy, over and above health and nutrition.

Britannia saw the writing on the wall. Its "Swasth Khao Tan Man Jagao" (Eat Healthy,

Think Better) re-position directly addressed this new trend by promising the new generation a

healthy and nutritious alternative - that was also delightful and tasty.

Thus, the new logo was born, encapsulating the core essence of Britannia - healthy, nutritious,


3/44

- 3 -

optimistic - and combining it with a delightful product range to offer variety and choice to

consumers.

2006-07 was an exceptional year for Britannia with top line sales growing at 27.5%, making

Britannia the leader among FMCG Companies in terms of organic growth. It also saw the Bread,Cake and Rusk business grow 54% to become a Rs. 2,000 mn business.

Top line growth was driven by investment in the fundamental growth pillars of brands -

renovating existing brands and launching new ones and expanding reach. With the segmented and

sharpened go to market strategy, Britannias brands now have greater availability in rural markets

and pervasive presence in modern trade.

In a fiercely competitive environment Britannia outpaced market growth and Britannia

brands continue to lead the market in every category, except for Glucose biscuits. Britannia was

ranked second among FMCG Companies in the Business World Most Respected Company

Survey2006.

Britannia's strategy of strengthening and sharpening its brands and liberating them from existing

formats and conventional biscuit archetypes has paid off. In that context, Tiger is now more than a

glucose biscuit and includes cream and coconut varieties. The Tiger Chota extension draws on the

kids snacking habit presenting biscuits as small, pop-able, snacks in a pouch pack. Similarly,

Treat added Fruit Rollz to its repertoire of delightful and indulgent experiences for kids.

Innovation has shown its promise as a key business driver addressing several purchase and

consumption opportunities both in-home and out of home, as well as for gifting. Britannia's focus

on innovation has meant more new offerings (brands, product and pack forms) than the rest of the

industry combined. Prominent innovations include Chota Tiger, 50:50 Chutkule, Treat Fruit

Rollz, NutriChoice Digestive, NutriChoice Sugarout, Renovated Milk Bikis and Chocolate Cream

in the Tiger range. The Bread, Cake and Rusk portfolio was strengthened with the successful

national launch of Good Day cup cakes and extension of rusk to the south.

As a corporate, Britannia has worked for the benefit of all stakeholders -

shareholders, consumers, dealers, suppliers, bankers and employees. It has established an

excellent track record in terms of its financial performance and dividends distributed to its

shareholders. This has been adequately demonstrated with the Company's topline growing from 8,

478 Mn in 1998 to 23,171 mn in 2007, a growth of 173% over the last 10 years. The net profit

grew even more significantly at 273 % from Rs 289 Mn in 1997-98 to Rs 1,076 Mn in 2006-07,

giving a CAGR of 15.72 %.


4/44

- 4 -

Company History - Britannia Industries

1994

- During the year, the bakery division launched `Bakers Choice' a sweet biscuit and `Thinlite' a

light semi-sweet biscuit aimed at fitness concious consumers.

1995

- Under the Pure Magics' Umbrella, the company launched a new sandwich cream biscuit with

two-in-one flavour viz. double cream and this was well received in the market. In the cake

market, under the premium segment, the company launched with Groupe Danone's technological

input a Swiss roll Cake Mini Roule which was also met with good response.

1996

- Marie gold biscuits registered quantum growth in volumes and milk bikis milk cream launched

during the year was well received. Despite general slowdown in the economy the company's

profits improved.

1997

- The Biscuit industry has been dereserved which would not only remove restriction on increasing

capacity but would also provide opportunities of growth through new products and efficient

production systems. The Company undertook to diversify into cheese and dairy whitner.

- The Company launched `Tiger' range of biscuits for mass market category, `Jim-Jam' and

`Chekkers' in the premium segment. The Company also launched Butter in Delhi during the year.

- Britannia Industries Ltd is all set to launch a new corporate identity and a total revamp of its

product portfolio, with strategic inputs from an international strategic design and brand

repositioning company - Shining Strategic Design.

1998

- Food major Britannia Industries Ltd (BIL) has signed a wage agreement with the Maharashtra

General Kamgar Union (MGKU), providing an average wage increase for 1,000 workers

employed in the biscuit manufacturing unit at Reay Road, Mumbai.


5/44

- 5 -

- The company has launched Half/Half, a soft cake filled with cream in two variants, chocolate-

vanilla and vanilla-orange. Half/Half comes in a twin-cake pack (Rs.6) and a tray pack containing

five cakes.

1999

- Britannia Industries Ltd has rolled out its flavored milk brand `Zip-Sip' in tetrapaks. Zip-Sip has

been launched in Mumbai and some markets in the South.

- Britannia Industries, launching the country's first branded flavored milk is another step towards

its goal of becoming a dairy-products giant.

2000

- Britannia Industries has launched consumer promotion scheme `Britannia Khao, Cricketer Ban

Jao' on May 1st.

- Britannia Industries, in its second coming in the Indian dairy market under the `Milkman' brand,

is introducing a range of products many in desi flavours to woo the Indian consumer.

- The Company has launched Vita Mariegold, a semi-sweet biscuit which reportedly has 10

essential vitamins, milk protein and 58 cereals.

2001

- Britannia Industries has launched Britannia Milkman Milk in Delhi.

- Biscuits major Britannia Industries will fund its in-principle agreement to acquire 49 per cent of

Kwality Biscuits through internal accruals.

2002

-Britannia Industries Ltd announced on March 26, 2002 that it has entered into a joint venture

with the Fonterra Cooperative Group, New Zealand's biggest company and one of the leading

diary co-operative groups in the world.

-Britannia's new COO is Nikhil Sen.

2003

- Board of Directors of Britannia Industries Ltd has passed a resolution to terminate theemployment of Mr. S K Alagh as Managing Director of the company with immediate effect.


6/44

- 6 -

- The management of Britannia Industries has roped in John Miller, a Danone representative, as

additional director on its board.

-Britannia New Zealand Foods, a joint venture of Britannia Industries and Fonterra Co-operative

group of New Zealand has launched Britannia Milkman fresh milk.

2004

-Britannia Industries Ltd has informed that pursuant to the approval of the shareholders of the

Company at the AGM held on August 08, 2003 and the subsequent application to the Cochin

Stock Exchange Ltd., the said stock exchange has delisted the securities of the Company with

effect from November 15, 2003.

2005

-Britannia New Zealand launches health drink for adult.

2006

-Britannia Industries Ltd has forged a strategic alliance with CCD. Daily Bread Pvt Ltd a

Bangalore based Company engaged in manufacturing and retailing of premium breads, cakes and

high end ready to eat foods and snacks.

-Britannia Industries Ltd has appointed Mr. Stephan Gerlich as a Director.

COMPANYS BACKGROUND

Britannia was incorporated in 1918 as Britannia Biscuits Co LTD in Calcutta. In 1924, Pea

Frean UK acquired a controlling stake, which later passed on to the Associated Biscuits

International (ABI) an UK based company. During the 50s and 60s, Britannia expanded

operations to Mumbai, Delhi and Chennai. In 1989, J M Pillai, a Singapore based NRI

businessman along with the Groupe Danone acquired Asian operations of Nabisco, thus acquiring

controlling stake in Britannia. Later, Groupe Danone and Nusli Wadia took over Pillais holdings.

PLANT LOCATION :

Britannia's plants are located in the 4 major metro citiesKolkata, Mumbai, Delhi, and

Chennai. A large part of products are also outsourced from third party producers. Dairy products

are out sourced from three producers - Dynamic Dairy based in Baramati, Maharashtra, and

Modern Dairy at Karnal in Haryana and Thacker Dairy Products at Howrah in West Bengal.


7/44

- 7 -

Britannia had spent 0.1 million US$ to hire Paris based designer Shombit Sen Gupta to

create a logo and packaging design. The logo had three objectives:

Give consumer reassurance that it was a trusted and familiar brand.

Britannia has the ability to change.

It had to be appropriate to the business the company was in.

The logo consists of the companysname and slogan, Eat Healthy Think Better. The

Hindi rendition is Swastha Khao, Tan Man Jagao. The corporate statement Eat Healthy Think

Better captures the Indian concept of the unity of mind and body.

The logo has three colours red, white, and green each having its own significance. Colour

Red denotes Energy and Vitality. White denotes purity. Green stands for Nutrition and Freshness.

The strike communicates Innovation and Futuristic Power of Britannia.

Today, Britannia is the largest biscuit and bakery company in the country with the daily

sales turnover of over Rs. 8478 million. It is the market leader in the 1.3-million tone Indian

biscuits industry with a 60% share. It has maintained market leadership with a 48% value market

share in the organized sector.

Britannia core businesses constitute of Bakery and Dairy products. Bakery productsaccount for 90% of the revenues and include Biscuits, Bread and Cake & Rusk. Dairy products

contribute to 10% of Britannias annual turnover of Rs13.38bn. Throughout its existence,

Britannia has operated on the principles of providing products to the consumers that are healthy

and tasty. This is brought about by the use of high quality ingredients with a strong focus on

naturalness and modern manufacturing practices. The company today has a wide range of

bakery products in the biscuit, bread and cake segment. It has trimmed down its wide product

portfolio by reducing the products from 35 to around 25 and began to focus on value-added

instead of low-margin products.

BIL (Britannia Industries Ltd.) has decided to focus on seven core brands in the biscuits and

bakery category. The brands included Good Day, Tiger, 50-50, Snacks, and the Cream Treat

brands, among others.

. With the launch of Tiger brand, it has taken a plunge in the low-end category, taking

competition head on with Parle, which is the leader in this segment. The company has also

diversified within dairy and bakery products to enter the butter, cheese and ghee markets. The

portfolio was expanded with the launch of butter, pure flavored milk in tetra packs and UHT milk.


8/44

- 8 -

Britannia has built an enviable retail distribution network, which services 400,000 retail

outlets in 2,200 towns with the help of 2,500 distributors. The company is aggressively expanding

its network with a bias towards the rural markets recently, in the ethnic food segment, the

company introduced a new range of traditional namkeens in Mumbai called Britannia Snacks.

The new range includes seven varieties of traditional namkeens like 'Bikaner ki Bhujia' and

'Rajasthani Alu Bhujia' in a price range of between Rs 5 and Rs 20.The company is in the process

of setting up a Greenfield Biscuit Project in Uttaranchal to augment its production capacity,

entailing an investment of about Rs 55.2 crore. This plant will have capacity to produce over

45,000 tonnes of two or three varieties of biscuit per annum.So after over seven decades of being

inseparable part of life in India, Britannia is now set to usher its customers into a healthier and

tastier future

Industry Profile

Fast Moving Consumer Goods

FMCG Industry :

FMCG are products that have a quick shelf turnover, at relatively low cost and don't require a lot

of thought, time and financial investment to purchase Fast Moving is in opposition to consumer durables such as kitchen appliances that are

generally replaced less than once a year.

Three of the largest and best known examples of Fast Moving Consumer Goods

companies are Britannia, Nestl, Unilever and Procter & Gamble.

The Indian FMCG sector is an important contributor to the country's GDP. It is the fourth

largest sector in the economy and is responsible for 5% of the total factory employment in

India .

This has been due to liberalization, urbanization, increase in the disposable incomes and

altered lifestyle.

. The lower-middle income group accounts for over 60% of the sector's sales. Rural

markets account for 56% of the total domestic FMCG demand.

FMCG SECTOR :

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged

goods. Items in this category include all consumables (other than groceries/pulses) people buy

at regular intervals. The most common in the list are toilet soaps, detergents, shampoos,


9/44

- 9 -

toothpaste, shaving products, shoe polish, packaged foodstuff, household accessories and

extends to certain electronic goods. These items are meant for daily of frequent consumption

and have a high return. .

A major portion of the monthly budget of each household is reserved for FMCG products. The

volume of money circulated in the economy against FMCG products is very high.

THE TOP 10 COMPANIES IN FMCG SECTOR

SL.

NO.

Companies

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestl India

4. GCMMF (AMUL)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

10. Marico Industries


10/44

- 10 -

Major Players in the Industry

BRITANNIA INDUSTRIES LTD.(BIL)

PARLE ITC Ltd.

Surya Foods & Agro Ltd. (PRIYA GOLD)

In the 21st Century, Britannia strode as one of India's biggest brands and the pre-eminent

food brand of the country. It was also equally recognized for its Innovative approach to products

and marketing.

Britannia- its Market Share and Overview

BIL is the leading player in Bakery Products (Biscuits, Bread, Rusk and Cake), jointly promoted

by French food major Danone and Nusli Wadia. It enjoys market leader ship in Biscuits with 39

% market share in terms of value. It owns key brands like Tiger, Good Day and Marie Gold.

There are six brands contributing to 90% of its sales. Each of these brands generate sales

exceeding Rs.1 billion and these brands include Good Day, Tiger, 50:50,Treat, Milk Bikis, and

Marie Gold.

The company wants to give a special thrust on these brands for better margin. New

variants in these brands, attractive packaging formats and introduction of small SKUs are

expected to give volume growth in the domestic market. In the last year these brands achieved

double-digit growth.


11/44

- 11 -

BIL enjoys market leadership in all the sub-categories of biscuits, except in the Glucose

category where Parle is the leader. A recent strategic acquisition of 50% stake in Bangalore based

Daily Bread gives footholds in premium breads, cakes and high end ready to eat foods and

snacks. BIL is looking forward to increasing its stake in it from current stake of 50%.

Britannia is playing aggressively in the Out ofHome Consumption market, which has

Enormous potential. The low unit products help in broadening the customer base. Small and

convenient SKUs attract more consumers to consume these, while they are outside the home.

Chota tiger has been launched at Rs.2/- for 50 gms similarly Marie gold has been

launched at Rs.5/- for 75 gms, 25 gms of Little Heart at Rs.4/- .We believe that OOH category

will contributes about 7-8% of total sales in next two

to three years.

Products offered by Britannia industries

Britannia Portfolio


12/44

- 12 -

GLUCOSE BISCUITS

TIGER

CHOTA TIGER

TIGER CHAI BISKOOT TIGER ROSEMILK CREAM

TIGER BRITA ENERGY POPS

TIGER CHOCLATE CREAM

TIGER ORANGE CREAM

TIGER COCONUT ENERGY

TIGER ELAICHI CREAM

TIGER KESAR CREAM

TIGER BANANA

CREAM BISCUITS

TREAT CHOCO GELO

TREAT DELICIOUS DATES

TREAT APPLE PUNCH

TREAT FLAVOURED TANGY ORANGE

TREAT STRAWBERRY FLAVOURED SURPRISE

BOURBORN TREAT

TREAT ELAICHI FON

TREAT JIM JAM

TREAT MANGO MISCHIET

TREAT MASTI ORANGE

TREAT PINEAPPLE PRANK

NUTRI CHOICE BISCUITS

NUTRI CHOICE 5GRAINS

NUTRI CHOICE DIGESTIVE

NUTRI CHOICE CREAM CRACKER

NUTRI CHOICE THIN ARROWROOT

NUTIR CHOICE SUGAROUT CHOCLATE


13/44

- 13 -

MARIE BISCUITS

MARIE GOLD

VITA MARIE GOLD

MILK BISCUITS

MILK BIKIS

MILK BIKIS CREAM

GOOD DAY BISCUITS

GOOD DAY CHOCONUT

GOOD DAY BUTTER SCOTCH

GOOD DAY HONEY & RAISIN

GOOD DAY CHOCLATE CHIP

GOOD DAY RICH BUTTER COOKIES

GOOD DAY RICH CASHEW COOKIES

GOOD DAY RICH PISTA BADAM

50-50 BISCUITS

50-50

50-50 MASKA CHASKA

PEPPER CHAKKAR

LITTLE HEARTS

LITTLE HEARTS CLASSIC

PURE MAGIC

PURE MAGIC


14/44

- 14 -

Communication Mix

DISTRIBUTION NETWORK OF BRITANNIA BISCUITS

MANUFACTURER

C & AGENTS

SUPER STOCKISTS

STOCKISTS

RETAILERS

For a successful product it is essential for the company to use the communication mix in the right

way. An effective communication mix includes the right message through the right message and

the time of the communication should be right. The companies communicate with their

customers through the promotional activities that they do from time to time. The companies use

this mix to be in constant touch with their customers and also to keep reminding them of their

presence.

The company needs to keep few criteria while designing the mix like:

The target segment for a product needs to be kept in mind while designing a mix.

The choice of media is very important as the advertisement has to reach to the masses.


15/44

- 15 -

The objective of the communication has to be well defined as to whether it will be for a

new product or an existing product.

The elements of the marketing communications mix

Britannias communication mix has the following major components :

Advertising

Sales Promotion

Public relations and Publicity

Direct and Interactive Marketing

Personal Selling


16/44

- 16 -

SWOT ANALYSIS (Key to business strategy)

Strength

Fulfill one of our Basic Requirement

among Air , Water , Food, Shelter

Widely accepted in all Generations

Easily available in various forms

Provide good Instant Remedy for

hunger in the form of readymade food

Preserves the non seasonal food and

makes it available all throughout the

year

Weakness

Decreases nutritional value

Increases the cost of food product

Industry and technology requires high

investment

Regular usage of processed food can

cause alteration in health

Opportunities

Increase economy of India

Generate employment opportunity

Good quality of Goods

Provide competition to foreign

companies

Improve living standard

Provide goods to nation at cheaper rate

Inflow of foreign reserve and funds for

the govt.(taxes)

Threats

Many companies are result oriented

Increase in pollution

Sometimes provide poor quality of

product for more profit

Lack of technology

Unable to utilize all the resources

efficiently


17/44

- 17 -

PEST & Micro environmental Factors

A PEST analysis is used to identify the external forces affecting an organization .This is a simple

analysis of an organizations Political, Economical, Social and Technological environment. A

PEST analysis incorporating legal and environmental factors is called a PESTLE analysis.

Political

The first element of a PEST analysis is a study of political factors. Political factors influence

organizations in many ways. Political factors can create advantages and opportunities for

organizations. Conversely they can place obligations and duties on organizations. Political factorswhich influence the Britannia are as follows:-

Methodology of development of Standards

Provisions of Labeling

Acceptance of a basic list of additives

Matters relating to GMP(Good Manufacturing Practice), GHP(Gud Health Plan)

Issues related to Codex

Procedure for sampling& launching of Prosecuting

Grading of violations according to the nature of discrepancy.


18/44

- 18 -

Legislation such as the minimum wage or anti discrimination laws.

Voluntary codes and practices.

Market regulations.

Trade agreements, tariffs or restrictions.

Non conformance with legislative obligations can lead to sanctions such as fines, adverse

publicity and imprisonment. Ineffective voluntary codes and practices will often lead to

governments introducing legislation to regulate the activities covered by the codes and practices.

Economical

The second element of a PEST analysis involves a study of economic factors.

All businesses are affected by national and global economic factors. National and global

interest rate and fiscal policy will be set around economic conditions. The climate of the

economy dictates how consumers, suppliers and other organizational stakeholders such as

suppliers and creditors behave within society.

An economy undergoing recession will have high unemployment, low spending power and low

stakeholder confidence. Conversely a booming or growing economy will have low

unemployment, high spending power and high stakeholder confidence.

A Britannia will respond to economic conditions and stakeholder behaviour. Furthermore

Britannia will need to review the impact economic conditions are having on their competitors and

respond accordingly.

A truly Britannia has to be aware of economic conditions across all borders and needs to ensure

that it employs strategies that protect and promote its business through economic conditions

throughout the world.

Social

The third aspect of PEST focuses its attention on forces within society such as family,

friends, colleagues, neighbors and the media. Social forces affect our attitudes, interest s

and opinions. These forces shape who we are as people, the way we behave and ultimately

what we purchase. For example within the UKpeoples attitudes are changing towards

their diet and health. As a result the UK is seeing an increase in the number of people

joining fitness clubs and a massive growth for the demand of organic food.

Population changes also have a direct impact on organizations. Changes in the structure of a

population will affect the supply and demand of goods and services within an economy. Falling


19/44

- 19 -

birth rates will result in decreased demand and greater competition as the number of consumers

fall. In summary Britannia must be able to offer products and services that aim to complement and

benefit peoples lifestyle and behaviour. If Britannia do not respond to changes in society they

will lose market share and demand for their product or service.

Technological

Unsurprisingly the fourth element of PEST is technology, as you are probably aware

technological advances have greatly changed the manner in which businesses operate.

Organizations use technology in many ways, they have

1. Technology infrastructure such as the internet and other information exchange systems

including telephone

2. Technology systems incorporating a multitude of software which help them manage their

business.

3. Technology hardware such as mobile phones, Blackberries, laptops, desktops, Bluetooth

devices, photocopiers and fax machines which transmit and record information.

Technology has created a society which expects instant results. This technological revolution has

increased the rate at which information is exchanged between stakeholders. A faster exchange of

information can benefit Britannia Company as they are able to react quickly to changes withintheir operating environment.

However an ability to react quickly also creates extra pressure as businesses are expected to

deliver on their promises within ever decreasing timescales..

Technology will continue to evolve and impact on consumer habits and expectations, if Britannia

ignore this fact then it will definitely face extinction.


20/44

- 20 -

Leves of Strategic management

Characteristics Corporate level Business level Functional level

Scope Entire Org. SBU or single

business co.

Functional Area

Source &Motivation/Direction

Board of directors/CEO

Corporate strategy SBU strategy

Responsibility Top level corporate

managers

Top level SBU

managers or Top

level single

business co.

managers

Functional level

managers

Time Horizon Long term Medium to long

term

Short to long term


21/44

- 21 -

Specificity General statements

of overall direction

& intent

Concrete &

Operationally

oriented

Action &

implementation

oriented

Type Conceptual Mixed Operational

Flexibility High Medium Low

Cooperation Required Considerable Moderate Little

Cost Major Medium Modest

Corporate strategy

"Our markets are poised for exciting times. As a successful organisation, we must not only keep

pace with consumer expectation, but also anticipate them. Our new identity is to lay the base to

project our future as a successful 'food' company, a company that provides high quality and tasty,

yet healthy foods and beverages

The Group Management Board comprises the Vice Chairman & Managing Director, Presidents of

the Business Sectors as well as heads of certain key corporate functions. In 2010, Britannia, one

of the Indias largest biscuit brands held a market share of 38% in terms of value. Indian biscuit

industry, the third largest producer of the biscuits in the world was highly under-penetrated. This

presented numerous growth opportunities to new as well as existing players. Apart from the

presence of big players like ITC Foods and Parle, the local manufacturers of biscuits and other

Indian snacks had been raising concerns for Britannia. Besides competition, Britannia facedcritical challenges due to declining margins in the biscuit industry due to the increasing costs of

raw materials. Its profit had been on a decline since 2005. Though Britannia had forayed into

dairy and bakery products, 90% of its revenues still came from its core business in biscuits

category which was largely driven by product innovation. The case, highlighting the Britannias

growth strategies, provides scope to analyses opportunities and challenges for Britannia in the

Indian biscuit industry.


22/44

- 22 -

Pedagogical Objectives:

Product portfolio management, brand extension and market segmentation of Britannia

Analysing product innovation strategies of Britannia as its competitive advantage

Organic and inorganic growth strategies of Britannia to face the challenges in the Indianbiscuit industry.

Business Strategy

It relates to the functional areas such as production, marketing, finance, personnel etc.

Britannia has been investing significantly in higher and better quality of human resources both at

the front end and at the back end. It has sharply segmented its go-to-market strategy and unlike an

earlier focus on simply increasing the number of outlets it covered.

2. Britannia now has separate teams for general sales, modern trade, institutions, and semi-urban

and rural markets. It is building strong Capabilities in each of these segments.

3. Britannia has been working with an international consulting agency for building capabilities

shopperunderstanding as opposed to consumerunderstanding.

4. In 2008, Britannia divided its product portfolio into two distinct categories: "health and

wellness" and "delight and lifestyle." Products such as Tiger glucose and NutriChoice biscuits fall

under the former category, while Good Day and Treat fall under the latter. Each category is

headed by a senior executive responsible for outlining distinct growth strategies.

5. Other initiatives include introducing personal consumption packs to attract youth and people on

the move, adding transit points such as bus stops and small roadside shops to its distribution

network, and addressing workers in the business process outsourcing industry as a potential newmarket.


23/44

- 23 -

6. Britannia has doubled its ad spending in the last three years. It is also working to increase trade

marketing visibility and, for the first time ever, has signed on with a trade marketing agency.

According to one of director of Britannia Company Mr. Mehta, Britannia plans to increase

advertising and marketing spending to 10% to 12% of sales over the next few years from a current7%.

7. On the infrastructure front, Britannia has added 200,000 tons of annual capacity, an increase of

about 60%. It has also devised a long-term distributed manufacturing strategy, put in place a

continuous replenishment supply efficiency system, and strengthened its supply chain

management significantly.

Functional strategy

Developing and managing an advertising program includes

1. Selecting the objective

2. Deciding on the advertising budget

3. Developing the advertising campaign

4. Choosing the communication vehicle

5. Evaluation


24/44

- 24 -

Britannia has adopted three-pronged strategy

1. Freshness (lower pipeline stock)

2. Availability (improve distribution network)

3. Visibility (more shelf space at modern trade)

Promotional strategies

"Eat Britannia, Go for World Cup" was the theme adopted in 1999 .People

bought the biscuit packs and searched for the lucky scratch for flying to England to see

world Cup Cricket match. The sales bounced 37% high on account of this strategy. The

scheme came alive again during the world Cup Match in 2002-2003 in South Africa.

Lagan - the super hit movie " brought fame to Britannia Biscuits also as 40000 buyers

of Britannia Biscuit packs were invited to see and a small lucky group to play the game

with the movie Stars of Lagan. What a novel way to promote a product - a perception in

correct proportion indeed.


25/44

- 25 -

Key Steps towards strategic planning

VISION

Think Of A Purpose That Spirals Forth To Create Innovations From Within This Visionary

Zeal; Built On Trust And Knowledge, Has Empowered The Wadia Group In Various

Business Enterprises For more Than A Century. It now promises much more in the New

Economy ...

To dominate the food and beverage market in India with a distinctive range of Tasty Yet

Healthy Britannia brands.

Every third person, in India, should be a Britannia consumer.

Mission

To dominate the food and beverage market in India through a profitable range of Tasty

Yet Healthy products by making every Indian a Britannia consumer.

To be one of the best biscuit company.

Development of production in partnership with our customers to their specification.

Flexibility & capability to meet small & large production runs

VisionMission

Objectives

Goals

ProgrammesStrategies

Values


26/44

- 26 -

Objectives

Short-term Objective :

To improve image to shareholders.

To improve internal processes and controls.

To increase NSV and ROI.

Long-term Objective :

To be the lowest-cost producer in the market.

To become largest volume player in the bakery industry.

Quality Objectives :

Reduction in customer complaints To start documentation of market returns dealer wise

To empower the workmen on individual work area to ensure that only quality product

are passed on the next page of production.

Continuous training for the development of human resources.

To minimize the accident level.

As part of the growth strategy, the company always try to build on the values of brand

"Britannia" by aggressively pursuing tasty yet healthy offerings of mass appeal and also launchinga host of affordable products, which would help rejuvenate the mother brand and drive category

consumption.

Goals

Once the company developed their vision, mission and core values, they can then develop the

goals and objectives needed to achieve your vision.

Goals are general statements of what Britannia wants to achieve. So they need to be integrated

with their vision. They also need to be integrated with their mission of how they are going to

achieve their vision.

To improve profitability

To increase efficiency

To capture a bigger market share

To provide better customer service

To improve employee training

To reduce carbon emissions


27/44

- 27 -

Strategies

Britannia spends a great amount on promotional strategies like advertisements for the various

products it offers. It uses a mix of all the media forms to reach the maximum consumers. They

advertise through television, print, radio and reach out to their target audiences.

Some of Britannias popular business promotional strategies are as follows:

Britannia Khao, World Cup Jao which took100 mega-winners to Old Blighty to watch

the Cricket World Cup at Britannia's expense. This was a very smart initiative taken by

Britannia to motivate consumers to buy more of Britannias product in order to increase

their chances of being selected for the tour. This in turn helped the company to boost up its

sales before and during the mega event.

Britannia Rules! A day before the World Cup Of Cricket 99 began in England on May 14,

1999, one of Britannia Industries' senior-most marketing managers was spotted at

Mumbai's Sahara International Airport-escorting a gaggle of excited children, all of them

sporting Britannia caps, Britannia T-shirts, and other assorted Britannia paraphernalia.

No, he wasn't test-positioning yet another brand of biscuits on a group of unsuspecting

young'uns in an airport lounge. Those kids were actually some of the 100 mega-winners of

theBritannia Khao, World Cup Jaocontest, being flown off on charters to Old Blighty to

watch the World Cup at Britannia's expense. See Cricket. Sleep Cricket. Eat Only

Britannia (sic!).

Another excellent example of sport personality craze and innovation came from Britannia.

The company recently offered a white marble free with every pack of Britannia Treat. The

marble has a caricature of a Indian Cricketer printed on it, an innovative conversion of

craze for cricket & cricketing stars exploited with a fresh perspective.


28/44

- 28 -

Associated Punch lines of various Britannia Products

Products Punch Lines

50-50 Very Very Tasty Tasty

Good Day Ho gaya re Good-Day

Littile Heart Direct Dil se

Marie Gold Tea Time biscuit

Milk Bikis Eating Milk

Neutri Choice Swasth khao Tan Man jagao

Time pass Perfect partner for Time pass moments

Tiger Eat Healthy Think better

Treat Lovable devils

The sales promotion strategy followed by Britannia includes gift like Toys included in its

packs of biscuit segmenting towards lower age group categories.

Another strategy followed by Britannia is increasing the weight of various product packs

from 60 gram packs to 90 gram packs at the same price tags.

Values

Values define the business in terms of the principles and values that the business leaders will

follow. They provide the bounds or limits of how the business leaders will conduct their activities

while carrying out the vision and mission.

Britannias Core Values:

Provide economically sound business opportunities for our members.

Practice high ethical business standards.

Respect and protect the environment.

Produce high quality products that are safe for consumers.


29/44

- 29 -

Meet the changing needs and desires of consumers.

The values tell a lot about the leaders of AgVA and how they will conduct their business activities

and relationships.

Programmes

Programmes are statements of specific actions or activities used to achieve an objective. is a final

touch. You need to identify specific individuals who have the responsibility for implementing the

action plans. Creating the statements described above may seem like a lot of busy work. But, if

done properly, they can save money and time and increase the odds that companys venture will

succeed. Creating these statements will help you focus on the important aspect of your business.

Process of Strategic management oraganisation

Strategic Management Process.


30/44

- 30 -

Strategy Formulation

Framing Mission and Objectives:- In the step Britannia Company Forms its mission and

objective, which has been decided by top level management mainly by Mrs. Nasali Wadia

and Ms. Vinita Bali

Analysis of the Internal Environment:- In this part Britannia company analyze its

strength, weakness , opportunity, and threat which I have already shown you before, this is

also decided by the top level management or build up automatically as company

progressed up.

Analysis of the External Environment:- In this part company done external analysis i.e.

PEST analysis. In market Britannia is a big name so politically he is strong, Chairmen

Nasali Wadia is engaged in many Indian government and political society.

Gap Analysis: - Britannia biscuits is the most selling biscuits brand across the globe,

Britannia biscuits are healthy, efficient, powerful, standardized, segmented according to

categories and cheap in price. So all together customer gets what they need, sometime

there is gap between their expectations and companies delivery of product.

Framing Alternative Strategies: - They have also back up plan, they use those plans

according to the market condition.

Choice of Strategy:- Britannias first choice shop they kept Britannia contest to attract

customer. They can think differentiation as their alternate choice.

Strategy Implementation

Formulation of Plans: - The strategy planned by top level management. But the implementationpart has done by Business level and function level.

The plan that how can they achieved the target. For this they divided the big work into small

work. After that they implement small work.

Programs and projects:- After acquiring the biggest share in the market they are preparing their

company for the next step to achieve its goal. Their management is trained by the training

program to make them familiar with the Britannia family.


31/44

- 31 -

Resource Allocation:- To develop Britannia Biscuits market Britannia company is using various

resources such as physical resources, financial resources and human resources.

Structural Implementation:- There is need for organizational structure to implement

strategies.britannia companys structure is the framework through which an organization operates.

Functional Implementation:- A manager can also change activity of the sales person. The

manager that is head of the department of the Britannia company take all roles and responsibilities

to get the work done from others. the decisions taken by them are implemented by all the workers

or employees.

Behavioral Implementation:- Britannia is very much employee oriented organization the

marketing departments have given the performance bonus & they have been send to the factory to

demonstrate biscuits.

Strategy Evaluation

Setting of Standards: - In this level manager set target to his sales person, generally everydepartments work on target basis.

Measurement of Performance:- Now in this case manager analyze that whatever the target had

given to the sales peoples has done or not.

Comparison of Actual Performance with standards:- Now they check the actual performance

of the sales people and analyze the performance.

Finding out deviations:- In this case they check why the sales people not able to achieve the

target, whatever the target had given to the sales people where was the deviation.

Analyzing Deviations: - After that the manager and top level management check that deviation.

Taking Corrective measures:- After that manger tries to solve those deviation. Basically the

sales people will again send to the training field review and on job training, this is the method

Britannia adopts quite oftenely.


32/44

- 32 -

MCKINSEYS 7S FRAMEWORK

THE HARD Ss

Strategy:

The direction and scope of the Britannia company over the long term.

Structure:

The basic organization of the Britannia company, its departments, reporting lines, areas of

expertise and responsibility (and how they inter-relate).

Systems:

Formal and informal procedures that govern everyday activity, covering everything from

management information systems, through to the systems at the point of contact with the customer

(retail systems, call center systems, online systems, etc).


33/44

- 33 -

THE SOFT Ss

Skills:

The capabilities and competencies that exist within the Britannia company. What it does best.

Shared values:

The values and beliefs of the Britannia company. Ultimately they guide employees towards

'valued' behavior.

Staff:

The Britannia company's people resources and how they are developed, trained and motivated.

Style:

The leadership approach of top management and the Britannia company's overall operating

approach.

MCKINSEYS APPROACH TO PROBLEM-SOLVING

The problem is not always the problem

Create structure through M.E.C.E.

Dont reinvent the wheel

Every client is unique (no cookie cutter solutions)

Dont make the facts fit your solution

Make sure your solution fits your client

Sometimes let the solution come to you

No problem is too tough to solve


34/44

- 34 -

Mr.Nasali wadia

(chairman)

Mr. Keki Dadiseth

(Director)

Mr. Avijit Deb

(Director)

Mr. A.K.Hirjee

(Director)

Mr. A.K.Hirjee

(Director)

Nimesh N

Kampani

Vinita Bali

(managing Director

ORGANIZATIONAL STRUCTURE

BritanniaIndustries

Wholesalers

Point of sale ie

RetailersKirana Shops

Agents

Big retail unitslike Food Bazar

and for Exports


35/44

- 35 -

FUNCTIONAL STRATEGIES.

In an organization there are namely four important functions i.e.

Each of this function performs differently in an organization, so as in Britannia, so lets have stare

on them.

Marketing Strategies.

BRITANNIA company has won many awards , because of their high quality products and

customer satisfaction and became 1st biscuit company in world. Since they are also worth for their

marketing strategies lets gaze across.

The main marketing strategies followed by the firm are-

Product strategy.

Reduced losses by way of elimination of losses.

Target customers to capture growth in each category by segmenting the market both

along conventional lines and through segmentation.

Look beyond the product, at the customer. And use knowledge to reposition the brand.

High class R&D, and recently enhanced testing and evaluation facilities

A corporate image of quality.

Functions of

Business

Marketing

Finance

H R

Operations


36/44

- 36 -

Eat Healthy. Think Better. Buy Britannia. The 80-year-old biscuit king is reinventing

itself. Britannia now wants to become a foods giant, with the newly-added tag of health

and nutrition. What's more, with a clever formula of prices and products, it is targeting

every segment of the Indian market.

After all, the Rs 1,030-crore Britannia had spent a whopping Rs 10 crore on the contest-

the single biggest promotion ever in the Indian marketing history. Instead of concentrating

on a few of its biscuit brands, Britannia included all 16 of them in the 7-level contest it

ran, which blocked the air-waves for 13 weeks. The result: 1.60 crore customers actually

exchanged 4 empty packs each for the booklet on cricket that came as the first reward

Pricing strategy.

Cost based pricing.

Demand based pricing.

Competition oriented pricing.

Product oriented pricing.

Affordability based pricing.

Promotional strategy.

"Eat Britannia, Go for World Cup" was the theme adopted in 1999 .People bought the

biscuit packs and searched for the lucky scratch for flying to England to see world Cup

Cricket match. The sales bounced 37% high on account of this strategy. The scheme came

alive again during the world Cup Match in 2002-2003 in South Africa. Lagan - the

super hit movie " brought fame to Britannia Biscuits also as 40000 buyers of Britannia

Biscuit packs were invited to see and a small lucky group to play the game with the movie

Stars of Lagan. What a novel way to promote a product - a perception in correct

proportion indeed.

Financial strategies.

As Britannia is diversified business they are also in financial business named Britannia

finance & kotakBritannia so they get the good sources of money. Some of them lets come

across

To have long term capital they issue prefence share shares mainly.

BRITANNIA also do Self-financing to meet their capital needs.

BRITANNIA has the sinking funds to meet their future uncertainties.


37/44

- 37 -

Human Resource strategy.

BRITANNIA was previously hiring only male candidates, but they start hiring

female HR managers. They adopted HR Accounting for efficient recording of employee records.

Operational strategies.

After the great success of Scorpio BRITANNIA built their confidence in house

R&D.

Application of techniques like JQM, KAIZEN, TQM, TPM, JIT, ABC analysis

helps to increase the standards of products throughout the manufacturing process.

Corporate level strategies.

Corporate level Strategy helps to achieve performance targets, how to enhance the firms long -

term business position by matching mission with the achievements.

So as the corporate level of Britannia make strategies. From the observed data we can assess that

Britannia has been growing in substantial rate, so they are using the Growth strategy.


38/44

- 38 -

Britannia is conglomerate business organization as they are in diversified in various sectors.

Since they are using growth strategy they have passed all alternatives like they have been merged,

acquired, amalgamation, so lets have close look out their growth strategy. The company is jointly

controlled by Grouped Danone of France, which is holding 22% stake and Nusli Wadia group.

Nusli Wadia is one of the leading industrial houses in the country. Britannia enjoys a prominent

position in the industry. Over the last couple of years, it has trimmed down its wide product

portfolio and began to focus on value-added instead of low-margin products.

It mainly caters to the premium segment. With the launch of Tiger brand, it has taken a plunge in

the low-end category, taking competition head on with Parle which is the leader in this segment.

The company has also diversified within dairy and bakery products to enter the butter, cheese and

ghee markets. The company added two new products -- Sweet Lassi and Milkman Cold Coffee --

to its existing dairy-based drinks portfolio which includes the `Zip Sip' brand of flavoured milk.

Market penetration.

Growth Strategy

Internal alternatives.

Intersification.

- market penetration

-market development

- product development

Diversification

- vertical

-horizontal

-conglemerat

-concentric

External alternatives.

Acquisition

Merger

Amaglamation

Join venture


39/44

- 39 -

Market penetration occurs when a company enters/penetrates a market with current

products. The best way to achieve this is by gaining competitors' customers (part of their

market share).

Britannia adopted a new strategy which include attracting non-users of your product or

convincing current clients to use more of your product/service (by advertising etc). Market

penetration occurs when the product and market already exists

1. Market development.

Britannia attempt to identify and develop new markets for marketing current products. There

are three general strategies applied in market development: (1) working within the demographic

market to see if any particular demographic group can be encouraged to buy more of the product

or if any new group within the demographics can be encouraged to purchase the product; (2)

looking at the institutional market to see if these buyers can be increased; (3) attempting to

develop markets in new geographical areas.

To affect these strategies, Britannia attempt new distribution methods, change the design of

promotional efforts, and attempt to discover and promote innovative uses for an existing product.

2. Product development.

Britannia Company has adopted many strategies to develop new product. So that they can

attract new customers and satisfy old customers. New product development is also a necessary

response to new technology and changing market conditions. New product development may

be handled by a dedicated department within the company or may be part of each brand

manager's responsibilities.

E.g. = Britannia has tried to develop their products as per the customers convenience.

Diabetic customers always prefer biscuits like nutria choice.

Britannia treats and Nutri choice is the best example of it.

Vertical Diversification.They opened new plant in Nagpur for Hydraulic engine research

& development.

3. Horizontal Diversification.

The Punjab tractor has been acquired by BRITANNIA in 2007.

4. Conglomerate Diversification.

Mahindra holidays, Britannia life space is the new diversified business that define

BRITANNIA as Conglomerate diversified firm.

5. Concentric Diversification. Mahindra first choice, used car gallery is the best example.

6. Acquisition.Mahindra acquires majority stake in 3rd largest tractor company in China.


40/44

- 40 -

7. Merger.Acquired 51% stake in SAR Transmission Private Limited, a company engaged

in manufacture of gears and transmission shafts in 2005 .

8. Jointventure.

Signed MoU to enter into joint venture with Jiangling Motor Company Group (JMCG) of

China, to acquire tractor manufacturing assets from Jiangling Tractor Company, a

subsidiary of Jiangling Motor Company Group in 2004.

Mahindra International Limited established - a joint venture with International Truck and

Engine Corporation to manufacture trucks & buses in India in 2005.

There are three types of strategies: growth, stability and defensive.

Growth strategy

Growth strategies enable the organization to expand, either through mergers or

acquisitions, or establishing a new plant. McDonald has pursed its growth strategy

through direct expansion. It never purchased other fast-food restaurants' chains. It has

grown only by granting franchises to people who are willing to be retained in "McDonald's

Way" Major forms of growth strategies are concentration, vertical integration and

diversification.

Concentration: Concentration focuses on growth through single product or a small number

of closely related products. Concentration usually takes place through market

development (gaining a Larger share of current market or expanding new ones), product

development (improving a basic product or service or expanding into closely related

product or service) or horizontal integration (Adding one or more businesses).

Vertical integration: It is a means through which the firm produces its own inputs

(backward) or disposes its own outputs (forward).


41/44

- 41 -

Strategy evaluation and control.

A)FINANCIAL EVALUATION:

1)RETURN ON INVESTMENT: This ratio measures the firms ability to perform as a rate of

return on the total assets employed. It is stated as:

EBIT (Earnings before Interest and Tax)

Total assets

As there is lack of data to calculation, its difficult to calculate this ratio.

(2) EARNINGS PER SHARE (EPS): This is nothing but the earning available to the

shareholders of the company. It indicates the profitability of the company which is available to the

shareholders. We can find the earned profits per share also called earnings per share as follows:

Profits after Tax (PAT)

Total number of Outstanding Shares

As there is lack of data to calculation, its difficult to calculate this ratio.


42/44

- 42 -

(3) PRICE EARNINGS MULTIPLE: This is one of the most authentic measures of financial

performance as it measures the market price of the companys share which is a reflection of

sentiments and demand of the general public for companys share. It is not a ratio but a multipleand is calculated as:

Market price per share (Quotes on NSE/BSE)

Earnings per share

B) BUDGETS:

There are different types of budgets:

a. Capital expenditure budget.

b. Cash budget.

c. Sales budget.

d. Marketing budget.

e. Advertising budget.


43/44

- 43 -

CONCLUSION

After going thick on the thing, now time is to make a complete picture. While making a product a

SKU (Stock Keeping Unit) of the shop retailers think about the GMROI (Gross Margin Return OnInvestment) and they promote the brand which provide them highest. They expect return in the

form of profit margin, company schemes, window display and references of the shop. Among

these, company schemes make the differences and are the highest source of motivation after profit

margin. Retailing demands a constant push from the company.

Marketer needs to use advertising and brand building strategies to address the discerning buyers

and retail push to in different buyers. The manufacturer should understand consumer behavior

because retailers can't help quality and price. It is only up to dealers said it is demand they sellBritannia 42% agree that at retail shop it is brand popularity, which determine the purchase of

biscuit.

There is a greater need to understand the retailer behavior considering them as a team working for

the company may help them to be attached to the company. There should be feeling of belonging

to the company in inner of the retailers. Setting values club for retailers so that they may exchange

views with the company and help in understanding consumer behavior.


44/44

- 44 -

Bibliography

www.britannia.co.in/

en.wikipedia.org/wiki/Britannia Industries

www.google.co.in

www.companylisting.ca/Britannia_Strategy_Management_Inc/default...

www.britanniafood.com/Company-Profile.php
http://www.britannia.co.in/http://www.britannia.co.in/http://www.britannia.co.in/http://www.google.co.in/http://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.companylisting.ca/Britannia_Strategy_Management_Inc/defaulthttp://www.google.co.in/http://www.britannia.co.in/

Documents

strategic mgmt britania project