strategic management main project on britannia
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IntroductionBritannia, 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 : Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World'. The Economic Times pegged Britannia India's 2nd Most Trusted Brand.
ActivitiesBritannia product line includes biscuits, snacks, packed milk, cheese, butter, buttermilk and yogurt. Britannia owns popular brands like: NutriChoice Sugar Out. NutriChoice Digestive Biscuit. Treat Fruit Rollz. New Britannia Milk Bikis. Britannia Marie Gold Doubles. Britannia 50-50. Britannia Tiger Biscuits. The Wadia Group (parent company of Britannia) along with Groupe 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: No # 1 worldwide in Fresh Dairy Products. No # 1 worldwide equally placed in Bottled Water (by volume). No # 2 worldwide in Biscuits and Cereal Products.
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 on major international brands and on its rock solid presence in local markets (about 70% of global sales come from brands that are local market leaders.)
PerformanceBritannia 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.
IMPORTANT PERSONS IN THE COMPANY
BOARD OF DIRECTORS
Mr.Nusli Neville Wadia
Ms. Vinita Bali Mr. Keki Dadiseth Mr. Avijit Deb Mr. A.K.Hirjee Mr. Nimesh N Kampani Mr. S.S.Kelkar Mr. Pratap Khanna Mr. Jeh N Wadia Director Director Director Director Director Director Director
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 choco nuts.
Packaging and LabelingThe 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, 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 %. .
Company History - Britannia Industries1994 - 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 Swissroll 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. - The company has launched Half/Half, a soft cake filled with cream in two variants, chocolatevanilla 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 flavoured 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 flavoured milk is another step towards its goal of becoming a dairy-products giant. 2000 - Britinnia 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 the employment of Mr S K Alagh as Managing Director of the company with immediate effect. - 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 Cooperative 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 BACKGROUNDBritannia 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 cities Kolkatta, 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. 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 companys name 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 tonne 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 products account 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, Snax, 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. 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 Snax. 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 ProfileFast 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, 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. Companies NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Hindustan Unilever Ltd. ITC (Indian Tobacco Company) Nestl India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries
Major Players in the Industryy BRITANNIA INDUSTRIES LTD.(BIL) y PARLE y ITC Ltd. y 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. 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 Of Home 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 industriesBritannia Portfolio
GLUCOSE BISCUITS y TIGER y CHOTA TIGER y TIGER CHAI BISKOOT y TIGER ROSEMILK CREAM y TIGER BRITA ENERGY POPS y TIGER CHOCLATE CREAM y TIGER ORANGE CREAM y TIGER COCONUT ENERGY
y TIGER ELAICHI CREAM y TIGER KESAR CREAM y TIGER BANANA CREAM BISCUITS y TREAT CHOCO GELO y TREAT DELICIOUS DATES y TREAT APPLE PUNCH y TREAT FLAVOURED TANGY ORANGE y TREAT STRAWBERRY FLAVOURED SURPRISE y BOURBORN TREAT y TREAT ELAICHI FON y TREAT JIM JAM y TREAT MANGO MISCHIET y TREAT MASTI ORANGE y TREAT PINEAPPLE PRANK
NUTRI CHOICE BISCUITS y NUTRI CHOICE 5GRAINS y NUTRI CHOICE DIGESTIVE y NUTRI CHOICE CREAM CRACKER y NUTRI CHOICE THIN ARROWROOT y NUTIR CHOICE SUGAROUT CHOCLATE MARIE BISCUITS y MARIE GOLD y VITA MARIE GOLD
MILK BISCUITS y MILK BIKIS y MILK BIKIS CREAM GOOD DAY BISCUITS y GOOD DAY CHOCONUT y GOOD DAY BUTTER SCOTCH y GOOD DAY HONEY & RAISIN y GOOD DAY CHOCLATE CHIP y GOOD DAY RICH BUTTER COOKIES y GOOD DAY RICH CASHEW COOKIES y GOOD DAY RICH PISTA BADAM 50-50 BISCUITS y 50-50 y 50-50 MASKA CHASKA y PEPPER CHAKKAR
LITTLE HEARTS y LITTLE HEARTS CLASSIC
PURE MAGIC PURE MAGIC
Communication MixDISTRIBUTION NETWORK OF BRITANNIA BISCUITS
C & AGENTS
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. 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
SWOT ANALYSIS (Key to business strategy)
Strength y Fulfill one of our Basic Requirement among Air , Water , Food, Shelter y Widely accepted in all Generations y Easily available in various forms y Provide good Instant Remedy for hunger in the form of readymade food y Preserves the non seasonal food and makes it available all throughout the year Opportunities y Increase economy of India y Generate employment opportunity y Good quality of Goods y Provide competition to foreign companies y Improve living standard y Provide goods to nation at cheaper rate y Inflow of foreign reserve and funds for the govt.(taxes)
Weakness y Decreases nutritional value y Increases the cost of food product y Industry and technology requires high investment y Regular usage of processed food can cause alteration in health
Threats y Many companies are result oriented y Increase in pollution y Sometimes provide poor quality of product for more profit y Lack of technology y Unable to utilize all the resources efficiently
PEST & Micro environmental Factors
A PEST analysis is used to identify the external forces affecting an organisation .This is a simple analysis of an organisations Political, Economical, Social and Technological environment. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis.
The first element of a PEST analysis is a study of political factors. Political factors influence organisations in many ways. Political factors can create advantages and opportunities for organisations. Conversely they can place obligations and duties on organisations. Political factors which influence the Britannia are as follows:-
y Methodology of development of Standards y Provisions of Labelling y Acceptance of a basic list of additives y Matters relating to GMP(Good Manufacturing Practice), GHP(Gud Health Plan) y Issues related to Codex y Procedure for sampling& launching of Prosecutin y Grading of violations according to the nature of discrepancy. y Legislation such as the minimum wage or anti discrimination laws. y Voluntary codes and practices. y Market regulations. y 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.
EconomicalThe 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 organisational 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.
SocialThe third aspect of PEST focuses its attention on forces within society such as family, friends, colleagues, neighbours 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 UK peoples 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 organisations. Changes in the structure of a population will affect the supply and demand of goods and services within an economy. Falling 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.
TechnologicalUnsurprisingly the fourth element of PEST is technology, as you are probably aware technological advances have greatly changed the manner in which businesses operate. Organisations 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, Blackberrys, 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 within their 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 wil definitely face extinction.
Leves of Strategic management
Corporate level Entire Org.
Business level SBU or single business co.
Functional level Functional Area
Source & Motivation/Direction Responsibility
Board of directors/ CEO Top level corporate managers
Corporate strategy Top level SBU managers or Top level single business co.
Functional level managers
managers Time Horizon Long term Medium to long term Specificity General statements of overall direction & intent Type Flexibility Cooperation Required Cost Conceptual High Considerable Major Mixed Medium Moderate Medium Operational Low Little Modest Concrete & Operationally oriented Action & implementation oriented Short to long term
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 underpenetrated. 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 faced critical 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 analyse opportunities and challenges for Britannia in the Indian biscuit industry. Pedagogical Objectives:y y y
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 Indian biscuit industry.
Business Strategy It relates to the functional areas scuh 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 stratergy and unlike an earlier focus on simply increasing the number of outlets it covered.
2.Britinnia 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. Britinnia has been working with an international consulting agency for building capabilities shopper understanding as opposed to consumer understanding.
4. In 2008, Britinnia 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 new market.
6. Britinnia 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 current 7%.
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 stratergy, put in place a continuous replenishment supply efficiency system, and strengthened its supply chain management significantly.
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 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.
Key Steps towards strategic planning
Vision Mission Objectives Goals Programmes Strategies Values VISIONy 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 ... y To dominate the food and beverage market in India with a distinctive range of Tasty Yet Healthy Britannia brands. y Every third person, in India, should be a Britannia consumer .
Missiony 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. y To be one of the best biscuit company. y Development of production in partenership with our customers to their specification. y Flexibility & capability tomeet small & large production runs
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 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 launching a host of affordable products, which would help rejuvenate the mother brand and drive category consumption. product are
GoalsOnce 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.y y y y y y
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
StategiesBritannia 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:
y Britannia Khao, World Cup Jao which took 100 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 there chances of being selected for the tour. Which in turn helped the company to boost up its sales before and during the mega event.
y 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 the Britannia Khao, World Cup Jao contest, 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!). y 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.
Associated Punch lines of various Britannia Products
Products 50-50 Good Day Littile Heart Marie Gold Milk Bikis Neutri Choice Time pass Tiger Treat
Punch Lines Very Very Tasty Tasty Ho gaya re Good-Day Direct Dil se Tea Time biscuit Eating Milk Swasth khao Tan Man jagao Perfect partner for Time pass moments Eat Healthy Think better 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:y y y y y
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. Meet the changing needs and desires of consumers.
The values tell a lot about the the leaders of AgVA and how they will conduct their business activities and relationships.
Programmesprogrammes are statements of specific actions or activities used to achieve an objective.Iis 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 oraganisationStrategic Management Process.
1 Strategy Formulation
y 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 Briatannia 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 plan 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.
Formulation of Plans: - The strategy planned by top level management. But the implementation part 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 biffest 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.
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 fatory to demonstrate biscuits.
Strategy EvaluationSetting of Standards:- In this level manager set target to his sales person, generally every departments 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.
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).
THE SOFT SsSkills: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-SOLVINGy y y y y y y y
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
The Britannia products which includes in stars are=1. Milk treat 2. 50-50 3. Tiger 4. Littile hearts
The Britannia products which includes in stars are=y Marie-gold y Good-day y Treat
The Britannia products which includes in stars are=y Time pass y Pure magic
The Britannia products which includes in stars are=y Nutri choice y Organisational structure of Britannia
Mr.Nasali wadia (chairman)
Vinita Bali (managing Director
Mr. Keki Dadiseth (Director)
Mr. Avijit Deb (Director)
Mr. A.K.Hirjee (Director)
Mr. A.K.Hirjee (Director)
Nimesh N Kampani
Point of sale ie Retailers
Big retail units like Food Bazar and for Exports
As the value chain is the combination of primary functions and secondary functions (supportive). Where primary functions starts with suppliers or any inbound activities, production of goods and reach to the customer through its supportive functions to turn potential customer into consumer. FUNCTIONAL STRATEGIES. In an organization there are namely four important functions i.e.
Functions of Business
HREach of this function perform differently in an organization, so as in Britannia, so lets have stare
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 arey Product strategy. y y 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. y Look beyond the product, at the customer. And use knowledge to reposition the brand. y High class R&D, and recently enhanced testing and evaluation facilities y A corporate image of quality. y 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. y After all, the Rs 1,030-crore Britannia had spent a whopping Rs 10 crore on the bkwcj 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 7level 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. y Cost based pricing. y Demand based pricing.
y Competition oriented pricing. y Product oriented pricing. y Affordability based pricing. y 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.AsBritannia is diversified business they are also in financial business namedBritannia finance & kotakBritannia so they get the good sourses of money. Some of them lets come across o To have long term capital they issue prefence share shares mainly. o BRITANNIA also do Self-financing to meet their capital needs. o BRITANNIA has the sinking funds to meet their future uncertainities. Human Resource strategy. BRITANNIA were 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 confedence in house R&D.
Application of techniques like JQM, KAIZEN, TQM, TPM, JIT, ABC analysis help to increase the standards of products through out the manufacturing process.
Corporate level strategies. Corporate level Strategy helps to achieve performance targets, how to enhance the firms longterm business position by matching mission with the achievements. So as the corporate level of Britannia make strategies. From the observed data we can assess thatBritannia has been growing in substantial rate, so they are using the Growth strategy.
Intersification. - market penetration-market development - product development
Diversification - vertical-horizontal -conglemerat -concentric
Acquisition Merger Amaglamation Join venture
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 Groupe Danone of France, which is holding 22% stake and Nulsi 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 `ZipSip' brand of flavoured milk.
Market penetration. 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 effect 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.
3. 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 prefers biscuits like nutria choice.
Britannia treat and Nutri choice is is the best example of it.
Vertical Diversification. They opened new plant in Nagpur for Hydraulic engine research & development. 4. Horizontal Diversification. The Punjab tractor has been acquired by BRITANNIA in 2007. 5. Conglomerate Diversification. Mahindra holidays,Britannia lifespace is the new diversified business that define BRITANNIA as Conglomerate diversified firm. 6. Concentric Diversification. Mahindra first choice, used car gallery is the best example. 7. Acquisition. Mahindra acquires majority stake in 3rd largest tractor company in China. 8. Merger. Acquired 51% stake in SAR Transmission Private Limited, a company engaged in manufacture of gears and transmission shafts in 2005 . 9. Joint venture. y 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. y 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).
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 (Earning 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.
(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 multiple and 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.
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 On Investment) 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 sell Britannia 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.