STM Assignment

Under the guidance of Prof. Brajaraj Mohanty

Industry: Britannia Industries Limited
Section-B Group-01
UM15077 Chinmaya Dakua
UM15078 Debidutta Samantray
UM15080 Gitanjali Nair
UM15086 Kavita Kumari
UM15116 Suresh Padhiari

ACKNOWLEDGEMENT

We would like to express a whole-hearted gratitude to all those who have helped with the report or have been associated
with the report in any which way and made it a worth-while experience. We are greatly indebted to our batch mates and
our seniors for having shared their invaluable experience that went a long way in the successful completion of our report.
We are thankful to everyone who helped us to collect valuable information for the survey without their help and
cooperation; this project would not have been successful. A special mention of Prof Brajaraj Mohanty, who has given us
the opportunity for working on such a project, for his incessant support, feedback& guidance leading it to successful
completion.

Thank you.

Contents
1

Executive Summary........................................................................................................................................................... 5

Industry Overview.............................................................................................................................................................. 6
2.1

Nature and Size of the Industry............................................................................................................................... 6

2.2

Key Growth drivers for the Industry........................................................................................................................ 7

2.3

Identification of Critical Success Factors (CSF)..................................................................................................... 7

2.4

Market Analysis based on CSFs................................................................................................................................ 8

2.5

Industry Benchmarks............................................................................................................................................... 11

PESTEL Analysis................................................................................................................................................................... 13
2.6

Porters Five Forces Analysis.................................................................................................................................. 14

2.7

Strategic Group Mapping......................................................................................................................................... 15

2.8

Competitive Landscape............................................................................................................................................ 16

2.9

Market Segmentation............................................................................................................................................... 17

2.10 Buying Criteria Analysis of the Industry............................................................................................................... 18

2.11 Key trends and future developments.................................................................................................................... 19
2.12 Future Forecast......................................................................................................................................................... 20
3

Company Overview.......................................................................................................................................................... 21
3.1

Company background............................................................................................................................................... 21

3.2

Timeline with key milestones and their strategic impact..................................................................................21

3.3

Vision, Mission, Goals, and Strategic Themes..................................................................................................... 23

3.4

Key Product and Service Portfolio......................................................................................................................... 24

3.5

Core Competencies of the firm............................................................................................................................... 26

3.6

Business Model of the organization....................................................................................................................... 27

3.7

3rd Generation Balanced Scorecard (Amalgamation of 1st Generation BSC and Activity System Map). . .29

3.8

SWOT Analysis........................................................................................................................................................... 29

3.9

Competitor Analysis (identify competitors)......................................................................................................... 31

3.9.1 Based on Critical Success factors....................................................................................................................... 32

3.9.2 Based on Financial indicators.............................................................................................................................. 32
4

Future Growth Strategy for the organization.............................................................................................................. 35

4.1

Portfolio Analysis...................................................................................................................................................... 35

4.1.1 Based on BCG Matrix............................................................................................................................................ 36

4.2

Companys Strategic Roadmap for future............................................................................................................ 36

1 Executive Summary
Biscuit Industry has flourished in India enormously over the years and is still growing phenomenally. While the modern India is
considered a centre for software development, many do not realize that one industry that has developed similar capabilities is
Biscuit.
Indian Biscuit Industry with a total revenue of INR 78.58 billion has flourished enormously with a continuous growth over the
years and is still growing phenomenally. Britannia Industries Limited (BIL) with a market share of 38% is a major market player
in India, growing at a rate of 27% per year, compared to the industry growth rate of around 20%. It is ranked high on critical
success factors and is expected to maintain its growth in the market over the coming years, primarily lead by its pillar brands
Good Day, NutriChoice, MarieGold, 50-50 and Milk Bikis.
The Indian biscuit market is largely dominated by value (glucose and cream) biscuitssuch as ParleG and Tigerthat account
for 46% of the overall market. Britannias market share here rests at 8-9%, but the company commands a strong market
leadership in the remaining 54% of the cookies market, which includes premium and Marie biscuits.
We recommend BIL should focus on its product quality with competitive pricing, and invest in R&D and advertising initiatives to
ensure its leadership in the market in biscuits.
With constantly changing lifestyle, and biscuits entering the mainstream snacks category, Britannia, the undisputed biscuits
market leader, in our view has ample growth catalysts at its disposal to achieve its stated target of becoming a complete foods
player. Moreover, we envisage premiumisation and cost saving initiatives will continue to expand margins.

2 Industry Overview
India Biscuits Industry is the largest among all the food industries and has a turn over of around Rs.3000 crores. India is
known to be the second largest manufacturer of biscuits, the first being USA. It is classified under two sectors: organized and
unorganized. Bread and biscuits are the major part of the bakery industry and covers around 80 percent of the total bakery
products in India. Biscuits stands at a higher value and production level than bread. This belongs to the unorganized sector of
the bakery Industry and covers over 70% of the total production.
Today India can boast of being
Most cost effective and reliable biscuit machinery making centre.
Most talented senior management and technical manpower pool for biscuit making.
Most number of biscuit production manpower and operating technician manpower.
Most reliable centre for outsourcing manufacture of biscuits.
Most cost effective centre for food testing laboratories.
Most cost effective and talented centre for product development, research and formulation development
The biscuits and cookies industry in India, valued at INR 145bn (~USD 2.41bn) in FY 2014, has been growing at a CAGR of
~10% over the last three years. ValueNotes estimates that the industry will be worth nearly INR 279bn (~USD 4.65mn) by FY
2019, growing at a CAGR of ~14%.

2.1 Nature and Size of the Industry

History and Evolution of the
industry

The origin of the word "biscuit" is from Latin via Middle French and means "cooked
twice" (similar to the German Zwieback). Some of the original biscuits were British
naval hard tack. That was passed down to American culture, and hard tack (biscuits)
was made through the 19th century.

Key Consumers of this industry

and their changing needs

Biscuits were assumed as sick-man's diet in earlier days. Now, it has become one of the
most loved fast food products for every age group. Biscuits are easy to carry, tasty to
eat, cholesterol free and reasonable at cost.
States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra
Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most
industrially developed states, hold the maximum amount of consumption of biscuits.
Key customer trends- High price elasticity, low brand loyalty, flexible to try new brands

Evolution: http://extension.psu.edu/pests/ipm/schools-childcare/schools/educators/curriculum/contents/shorthistory
Industry: http://www.croplife.ca/urban-pesticides/the-benefits-of-industrial-pesticide-use#sthash.6TUViezZ.dpuf

make the game very competitive.

Stage in the Industry Life cycle

Maturity Stage with little or no Innovations made recently.

Total Available Market Size

(National and Global)

Global Market Size: $ 104 billion

National Market Size : INR 145bn (~USD 2.41bn) in FY 2014
Indian Biscuit Industry is the third largest in the world.

2.2 Key Growth drivers for the Industry

Key Growth drivers
1. High Domestic Rivalry
2. Highly competitive and
Concentrated Market

Rationale
1. Higher quality, lower cost and quick turnover of production and increased
competitiveness in the global market.
2. Apart from Big 3( Britannia ,Parle , ITC ) there are around 150 medium to small
biscuit factory in India.

2.3 Identification of Critical Success Factors (CSF)

Critical Success Factor identified
CSF 1: Competitive Pricing

CSF 2: Packaging and shelf space

CSF 3: Supply Chain and

Manufacturing operations
CSF 4: Product Quality

Rationale
Price Value Quotient requires the right balance between offering of the product and
level at which it is priced.
Smaller SKUs considering the current low consumption levels along with the pricesensitivity, theres a need to introduce smaller SKUs to induce usage and attract a
larger Consumer base.
Strategically located in retail outlets to maximize visibility and thus, sales.
Since majority of these biscuit purchases are impulsive decisions, these products must
have a unifying packaging scheme that establishes a brand image
BIL has been focusing on developing a competitive edge in manufacturing by deploying
Cost Efficiency and Operational Excellence programs across the value chain and is also
working on scaling up some of the existing manufacturing units
One of the biggest complaints amongst Biscuit-eaters was Breakage.
Purchasers would be irritated if they purchased a pack of biscuits that were almost

CSF 5: Research and development

CSF 6: Brand competitiveness and

awareness

inedible because the product had basically been reduced to a sack of crumbs.
As a result, successful performance in the industry requires producers to emphasize
producing a quality product.
Research and Development (R&D) team continues to play a very vital role in companys
goal to deliver profitable growth by developing superior organoleptic products, while
keeping the focus on value engineering of the product and packaging.
It is critical to educate the consumer and raise awareness about the quality, value and
usage of product. High Decibel Advertising Many brands have been able to work
towards the top of their respective categories, through their heavy expenditure on
advertising on different platforms

2.4 Market Analysis based on CSFs

BIL is market leader in the Indian bakery and biscuit market. Its portfolio of brands includes Tiger, Good Day, Marie Gold and
50:50. BIL has been seeing growth of around 27% per year, compared to the industry growth rate of about 20%. The
company was built up and was known for many years as the Biscuit King. The company has been voted one of Indias 100
most trusted companies, as listed in the Brands Trust Report.
CSF 1: Competitive Pricing
Competitive pricing is the sole pricing strategy which Britannia uses.

Britannia products are much better in quality and are good in price as well.
The pricing strategy along with distribution has been so strong, that people buy these products even on Railway
stations and while travelling, instead of buying local snacks.
The pillar brands - Good Day, NutriChoice, MarieGold, 50-50 and Milk Bikis continued their strong growth through
product superiority, impactful advertising, activations and by staying price - competitive.
CSF 2: Packaging and shelf space
The packaging team delivered differentiated packaging for Nutrichoice and Good day chunkies innovations in the
market with embossed cartons for better shelf display and premium appeal.
CSF 3: Supply Chain and Manufacturing operations
BIL follows the FMCG channel of distribution wherein it appoints distributors at select locations. These distributors are
then responsible for handling dealers, retail showrooms and Big bazaar and D mart.

The distribution in urban areas is fantastic with Britannia being present almost everywhere. However, the rural
penetration of the company is still less because of the challenges of distribution in rural area.
They increased operating control on capacity with the successful completion of Jhagadia Factory expansion and
acquisition of a Contract Manufacturing unit in Chennai.
Two more Greenfield factories are under construction in Perundurai, Tamil Nadu and Bidadi.
APO Planning tool has been further consolidated with focus on integrating the challenging demand-supply scenario
with optimum inventory management to better serve the market.

CSF4: Product Quality

Company is committed to provide superior quality and safe products of better nutritional value to consumers.
Three of BIL factories (Manna Foods Private Limited, Madurai, J B Mangharam Foods Private Limited, Gwalior and
Britannia Industries Limited, Jhagadia) were recognized for excellence in quality by CII and were recipients of National
Award for Food Safety-2014.
CSF5: Research and development
In 2014 new launch and restage of two pillar brands - Tiger Glucose and Bourbon biscuits.
R&D team developed truly differentiated, highly indulgent and best tasting Good Day Chunkies with 30% melting
chocolate chips and range of healthier cookies NutriChoice Heavens made with oats, cranberry, almond and banana.
Special iron and folic acid fortified biscuit was developed earlier to address the iron deficiency anemia in children.
overall R&D expenditure, as a percentage of sales, has been on the rise having increased from 0.12% in FY12 to 0.21%
in FY15.
R&D Expenditure as % of gross sales.

Innovations by Britannia in past 5 years

CSF 6: Brand competitiveness and awareness

The strongest asset for the promotion of Britannia products is the product itself. It has amazing brand equity due to
presence in the market for last many decades. Thus, a pull is created directly by the product.
. The company uses most of the usual methods of advertising, including billboards, magazines, tv ads and point of
purchase advertising. Britannia has high advertising spends for products like Good day and Bourbon which are almost
stars for the Britannia brand.
Companys parent brand Britannia strengthened its consumer connect by associating with big properties like Filmfare
and Cricket.

2.5 Industry Benchmarks

Size of industry:

Britannias distribution and sales per total outlet versus other consumer companies

Compared to other consumer companies, Britannias realisation per outlet is much higher owing to its higher proportion of direct
reach to overall reach. This also indicates that the new distribution strategy adopted by the company has resulted in increased
throughput per outlet. Sales per outlet is close to double that of Daburs and is 2/5 of HULs.

Industry Insights

The biscuit industry is Rupees 25000 crore market growing at a rate of 14% CAGR
Britannia with a total revenue of BIL is 78.58 billion (INR) is market leader in this industry beating Parle-G by a margin of 8%.
For Britannia, big brands like Good Day and NutriChoice have been the growth drivers in recent quarters, each gaining about 1%
share in overall biscuits market
Companys pillar brands - Good Day, NutriChoice, MarieGold, 50-50 and Milk Bikis continued their strong growth through product
superiority, impactful advertising, activations and by staying price- competitive
The two biggest strength areas of company - Indulgence and Health saw heightened activity
Good Day Chunkies brought the worlds best cookie experience to India and NutriChoice Heavens made Health more delightful
IPL partnerships and activations, competitive pricing strategy and new advertising initiatives also made sure that our brands
Good Day and NutriChoice continued their leadership within their respective categories
Companys parent brand Britannia strengthened its consumer connect by associating with big properties like Filmfare and
Cricket.
BIL has been seeing growth of around 27% per year, compared to the industry growth rate of about 20%.
The Indian biscuit market is largely dominated by value (glucose and cream) biscuitssuch as ParleG and Tigerthat account
for 46% of the overall market. Britannias market share here rests at 8-9%
In the remaining 54% of the cookies market, which includes premium and Marie biscuits, Britannia has market leadership

PESTEL Analysis
Category

Description

Key factors for analysis

Rationale

Political

Government
influence on
the industry
environment

Government binging down Excise

duty and liberalizing distribution
licenses.

The Excise Duty on all Value Added food products like

Nutritional and health foods, high value Ready to
Cook/serve products to be brought down to a
maximum of 8% from 16 %.
Production and Distribution licenses have been
liberalized.

Economic

Economic
factors that
influence the
industry
environment

Lack of technological upgradation.

Increase in per capita income a
stable and growing GDP.

There is a lack of technology up gradation in

manufacturing, packaging etc., along with inadequate
financial credit and support particularly for the
medium and small scale biscuit units.
Increase in per capita income in India
Indias GDP growing at an average 8%

Social

Social factors
that influence
the industry
environment

Increased per capita

consumption.
Largely young population present
in the country.
Change in lifestyle with more
number of women joining the
workforce.

Increase in per capita consumption by all segments of

the market
India is 3rd largest producer of biscuit in the world
Large proportion of the Indian population is relatively
young - in the age group of 16- 25years. Increase in
the population of working women and increasing
prevalence of nuclear double income families,
especially in urban areas.
Positive Perception among the people regarding
products (biscuits)

Technological

Technological
factors that
the industry
environment

Improved innovation and R&D

expenditures made in the
industry.

There was a lack of innovation and technology in

production, but has been improving from past five
years.
Improved Research and development activities in the
industry

Environmental

Environmental
factors that
the industry
environment

Primarily agriculture based

economy with population shift
trend towards urban areas.

Primarily agriculture based industry

Currently witnessing a slow shift towards urban sector
lately.
Population in the country is also boosting the sales of
the industry

Legal

Legislation
that affects

Legislation that directly influences

the various factors relating to the

Taxation, both Central Excise Duty as also State Sales

Tax, other miscellaneous levies i.e. turnover tax, local

industry
environment

industry

area tax, mandi taxes, purchase tax, octroi etc ,has

been a major deterrent in the growth of the biscuit
industry.
The CII Study Report has identified Biscuit as one of
the products that should treated as "Merit Good for
the purpose of liberal tax policy both by the Centre
and States.
Zero duty import of capital goods and raw material
for100 percent export oriented units.
The excise duty on packaging materials and
packaging machineries used for the processed food
industry should come down to 8%.
Packaging material for match sticks is exempted from
excise duty.

2.6 Porters Five Forces Analysis

Porters Five Forces

Description

Key factors for analysis

Rationale

Buyer Power

Buying power
of the farmers
and
government
agencies

High bargaining power.

Low switching power.
Low loyalty in case of biscuits.
High likelihood of trying new product.

Availability of a wide range of options from

different taste and price categories.
Availability of many biscuits from low, moderate
prices
Availability of biscuits from non-organized sector.
Loyalty of the buyers to biscuits that have brand
identity makes them more powerful in the case of
new entries.

Supplier Power

Manufacturing
and logistics
cost

Low bargaining power of suppliers.

In the case of major players bargaining power of

suppliers is very low.
The ingredients are widely available basic
commodities such as wheat, sugar etc.
Storage and logistics cost will remain same or can
be predicted.

Existing
Competition

Number of
firms in the
same sector

High rivalry among strong dominant

players in the market.
Weaker, yet profitable unorganized

Major players dominate the Indian market.

High competition among the players in the
industry to capture maximum market share.

and their
muscle power
to determine
market trends

sectors.

Unorganized sector cannot compete with major

players in the case of Advertising

Threat to new
entrants

Investment In
manufacturing

High entry barriers in case of organized

sector.
Low entry barriers in case of unorganized
sector.

Capital intensive manufacturing, advertising and

distribution.
Heavy competition from major players.
Low barrier to unorganized sector as it relatively
costs less to set up a local bakery.

Threat to
substitutes

Content of
product

High threat of substitution from a wide

range of options available in packaged
food category.

Substitute threat is more in the case of biscuits

Growing packaged industry and bread industry
Availability of wide options from local kiranas and
bakery.
Traditional Indian homemade snacks.

2.7 Strategic Group Mapping

A strategic group is a concept used in strategic management that groups companies within an industry that have similar
business models or similar combinations of strategies. Since Britannia, Sunfeast and Parle are major brands in India major
focus lies on three of them only smaller brands like Anmol, Priyagold also exist. Strategic group can be done on several basis
but a few areas has been covered here

Extent of product (or service) diversity: Three of the companies have nearly similar diversity of product although
sunfeast lags behind parle and Britannia a bit. Smaller brands mentioned above have their own separate group in this
regard.

Extent of geographic coverage: Coverage of Britannia is wider than parle and Sunfeast. Smaller brands have far less
coverage than major players.

Number of market segments served: Three of them cater to almost all the segments of the market. Same goes for
smaller brands as stated above.

Distribution channels used: Again approach followed by the companies is very similar in nature.

Extent of branding: Since Britannia is an older company the extent of branding is better than Sunfeast and brands like
Anmol and Priyagold.

Marketing effort: Marketing effort of Sunfeast is higher than others since its a comparatively new brand in market and
is trying too increase awareness among the consumers. Brands such as Anmol and Priyagold have their different group
as they dont have celebrity endorsement and other premium marketing tactics like bigger counterparts.

Product (or service) quality: As far as quality is concerned according to perception of consumer Parle and Britannia
stand out from Sunfeast in terms of quality. Other players are considered even more lower in this regard.

Pricing policy: All of the companies have a very similar pricing policy and there is not much to differentiate in this
regard

2.8 Competitive Landscape

Biscuits continued to be one the fastest moving packaged food categories from retail channels. It was the most common
snack along with tea and coffee in India, with sweet biscuits being particular popular, such as Britannia and Parle G. Sweet
biscuits was at a mature stage in the products lifecycle, and is well accepted amongst consumers, easily available, affordable
by everyone and a good snack. Hence, it maintained its leading position as the highest sales generator amongst biscuits.
Britannia Industries Ltd maintained its leadership of biscuits with 35% value share in 2014. Britannia is a household name,
and extremely well trusted brand in India. Furthermore, the company had an extremely strong retail network and is readily
available across both rural and urban India.

Value propositions ( Low Cost, Differentiation, Niche)

Consumption of biscuit and other bakery products, probably even as a breakfast item ) is a eating culture of the country
The unorganised sector consist of several local brands and unbranded offerings from bakeries
Britannia Tiger, for lower end market, offer value not only in terms of price but also it is crisp and nutritive
Effective advertising campaign and huge network of reatiling was utilised to reassure customers about the quality of the
tiger products

Competitive Strength Assessment (Normal and Weighted)

Strength Measure/ CSF

CSF 1: Competitive Pricing
CSF 2: Packaging and shelf space
CSF 3: Supply Chain and Manufacturing
operations
CSF4: Product Quality
CSF5: Research and development
CSF 6: Brand competitiveness and awareness
Total

Britan
nia
Weig
Britan Weight Parl
ht
nia
ed
e-G
0.1
7
0.7
8
0.1
8
0.8
8
0.25
0.15
0.2
0.2
1

8
9
9
8
49

2
1.35
1.8
1.6
8.25

ParleG
ITC
Weight
Weight Priya
ed
ITC ed
Gold
0.8
6
0.6
8
0.8
6
0.6
5

8
8
7
8
47

2
1.2
1.4
1.6
7.8

8
7
7
4
38

2
1.05
1.4
0.8
6.45

5
6
5
6
35

2.9 Market Segmentation

Criteria
DEMOGRAPHIC SEGMENTATION
Age

Kids
Matured People
Young People
Income
Low
High
BEHAVIORAL SEGMENTATION
Benefits
User Status
Usage Rate
Occasion
PSYCHOGRAPHIC SEGMENTATION

Key Products and/or Services

Fruit Rolls, Tiger & Treat

Good Day, Cream Cracker
Little Hearts, Cream Biscuits
Tiger, Marie
Good day, NutriChoice
Little Heart Biscuit & Time Pass for Lovers.
Little Heart Biscuit & Time Pass for Lovers.
Marie Gold is for High Usage Rate Customers.
Snack Biscuit, Fruit Rolls for occasion purposes.
Britannia has adopted itself according to the convenience and lifestyle of the Indian
consumers so Britannia came up with a different and new product line.

Priya
Gold
Weight
ed
0.8
0.5
1.25
0.9
1
1.2
5.65

NICHE SEGMENTATION

Britannia Slice Cakes and Britannia good day are designed for the people who actually also
wants some food characteristics in a biscuit. Different cream biscuits are also made for the
people who love to have a biscuit with cream.

2.10 Buying Criteria Analysis of the Industry

Parameter

Details

End-user Segments

Significance Attached (Low,

Medium, High)

Gender

Dependence of buying criteria

on gender of buyer

Male
Female

Low
Irrespective of gender of buyer
the gender criteria doesnt
decide buying

Occupation

Impact of occupation on
buying criteria

Students
Salaried
Self employed
Professional

High
Majority of buyers are those
who have a permanent source
of income

Awareness

Is awareness of different brand

essential for buyers

Publicity

Requirement of advertisement
and publicity

Television
Newspaper
Hoarding
Others

High
According to statistics
awareness of Britannia brand is
higher thus is a deciding factor
in purchase of biscuit
High
Television and radio play an
important role in deciding
brand purchased

Variety

Dependence on variety

Healthy
Snacks
User Status
Usage rate

Medium
This plays a moderate role on
buying of the brands products

Packaging

Dependence on packaging

Colourful
Dull

High
The way product is packed
plays a huge role in purchasing
of the product

2.11 Key trends and future developments

Key Trend

Impact on Industry (Low, Medium,

High)

Certainty of Impact (Low

probability, medium probability,
high probability)

Consumers will shift to healthier

versions for regular consumption
Packaged foods in east and northeast
India continue to be dominated by
domestic and local players
Busier and hectic work schedule may
lead to more snacking
Growing desire of experimentation and
hybrids in bakery industry my lead to
development of new products

Medium

High

High

High

High

Medium

High

High

2.12 Future Forecast

Consumers will shift to healthier versions for regular consumption; however, since it is not a proper meal, and generally
consumed along with tea or coffee, the sale of biscuits whether healthier versions or not will continue to remain steady
and unaffected by the growing health and wellness trend.

Packaged foods in east and northeast India continue to be dominated by domestic and local players. As consumers prefer
to eat at home and prepare their own meals, packaged food manufacturers do not have a very strong hold in northeast
India. Furthermore, eating habits and cuisine remain very different in east and northeast India, where the primary diet
consists of rice. However, the majority of the population continues to consume unpackaged rice.

Value sales in east and north east India are expected to grow at a constant 2014 price value CAGR of 7% over the forecast
period. Growth will be fuelled by pasta sauces, olive oil and nut and seed based spreads. These packaged foods continue
to have a niche presence in east and northeast regions, with sales being limited to cities and growth opportunities thus
being quite high.

We are increasingly seeing the snackification of breakfast as consumers lead busier lives and their diets need to keep up.
Indeed, one third of Indian working class consumers say there is not enough time to have bread or baked goods at home
in the morning. New formats need to target on-the-go breakfast consumers, for example breakfast biscuits or drinks have
had success here. Bakery brands are looking to gain a share of these new formats by making their products more portable
and snackable

Experimentation has become a key driver in the bakery market and a way to spark interest with younger consumers in
particular. One way in which brands are experimenting is through hybrids. Sweet bakery hybrids at retail started to appear
in Japan in 2014, followed by Europe in 2015. Given that one quarter of Indian cake buyers say they are interested in new
formats of cake, such innovation could find appeal, thus companies may need to come up with new product line.

3 Company Overview
3.1 Company background

Britannia Industries Limited (Britannia or 'the company') is engaged in the manufacturing and distribution of bakery and dairy
products such as biscuits, bread, cakes and rusks, milk, butter and cheese. The company primarily operates in India. It is
headquartered in Bangalore, India and employed 2,386 people as of March 31, 2014. Britannia Industries Ltd maintained its
leadership of biscuits with 35% value share in 2014. Britannia is a household name, and extremely well trusted brand in India.
The company recorded revenues of INR61,854.1 million (approximately $1,131.9 million) in the financial year ended March
2013 (FY2013), an increase of 12.8% over FY2012. The operating profit of the company was INR3,474.9 million
(approximately $63.6 million) in FY2013, an increase of 39.5% over FY2012. The net profit was INR2,595 million
(approximately $47.5 million) in FY2013, an increase of 30% over FY2012.
LOGO
Red denotes Energy and Vitality
White denotes Purity
Green stands for Nutrition and Freshness

3.2 Timeline with key milestones and their strategic impact

1892

Established with an investment of INR 295.

Operated under the name of V.S. Brothers.

1910

With the advent of electricity, operations were mechanised.

1918

C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and The Britannia Biscuit
Company Limited (BBCo) was launched.

1921

Industrial gas ovens were imported to increase production.

1924

The Mumbai factory was set up, and Peek Freans UK, acquired a controlling interest in BBCo.

Biscuits were in high demand during World War II, which gave a boost to the companys sales.
1954

Development of high quality sliced and wrapped bread in India was pioneered by the company.

1955

Britannia launched Bourbon biscuits.

1963

Britannia cakes hit the markets.

1979

WEF 3rd October, the company name finally was changed to the current Britannia Industries Limited.

1982

The American company Nabisco Brands, Inc. acquired the parent of Peek Freans and became a major foreign
shareholder.

1983

Sales cross 100 crores.

1986

The popular good day brand was launched.

1989

The executive office of the company moves to Bangalore.

1993

Little Hearts and 50-50 find their place on the market shelves.

1997

Britannia incorporates the Eat healthy Think better corporate identity.

Britannia launched its dairy products.

1999

Britannia Khao World Cup Jao- a major success. Profit up by 37%. More than 33,00,000 distribution outlets.

2000

Britannia was voted in top 300 small companies by Forbes Global.

2001

BIL ranked one of Indias biggest markets.

2004

Britannia was accorded the status of being a SUPERBRAND.

2005

Re-birth of Tiger. Swasth Khao, Tiger ban jao- becomes the popular chant.

2011

Received most respected company award from Businessworld.

3.3 Vision, Mission, Goals, and Strategic Themes

VISION
To dominate the food and beverage market in India with a distinct range of Tasty yet Healthy Britannia brands.
Every third person, in India, should be a Britannia customer.
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 customer.
To be one of the best biscuit company.
OBJECTIVE
Short Term- To improve image to shareholders.
To improve internal processes and controls.
Long Term- To be the lowest cost producer in the market.
To become largest volume player in the bakery industry.
GOAL

To improve profitability.
To provide better customer service.
To reduce carbon emissions.
MARKETING STRATEGIES
A strong quality of the product and customer satisfaction.
A growing relationship with customer and customer retention.
Focus on competitors activity.
A growing emphasis on global thinking and local marketing planning.

3.4 Key Product and Service Portfolio

Britannia is engaged in the manufacturing and distribution of bakery and dairy products such as biscuits, bread, cakes and
rusks, milk, butter and cheese.The company has a portfolio of top selling food brands. Britannia produces and distributes
premium brands such as 50:50, Good Day, Little Hearts, Milk Bikis, Marie Gold, Maska Chaska, NutriChoice, Pure Magic, Treat
and Tiger.
Glucose- Tiger, Milk Bikis.
Cream- Bourbon, Treat, Milk Bikis.
Cookies- Britannia cookies, Good day.
Health Digestive- Marie gold, Nutri choice.
Others- 50-50, Time Pass, Little Hearts, Nice Time.

Products

Punch Lines

50-50
Good Day
Little Hearts
Marie Gold
Tiger
Treat

Very Very Tasty Tasty

Ho Gaya Re Good-Day
Direct Dil Se
Tea Time Biscuit
Eat Healthy Think Better
Lovable Devils

Complete Product Portfolio

3.5 Core Competencies of the firm

PORTERS 5 FORCES MODEL

Potential Entrants- High end biscuit varieties, Traditional Indian snacks, breads, packaged snacks, bakery products.
Existing Competitors- Glucose segment: Parle-G, Sunfeast, local brands. Others- Marie, Bourbon.
Substitutes- Snacks- Roadside chat shops, Haldirams Rs.10 offerings etc. Confectionary- Patties, Local bakery, Cookies,
Rusk etc.
Bargaining power of Suppliers- Wheat, sugar, other commodities, increasing price.
Bargaining power of Customers- Other low price biscuits, same cost bakery items, homemade snacks.

Strong and Vast Distribution Channel

3.6 Business Model of the organization

Key
Partners

Key
Activities

Value
Proposition
s

Customer
Relationshi
ps

Who are our Key Partners?

Who are our key suppliers?
Which Key Resources are we
acquiring from partners?
Which Key Activities do
partners perform?
What Key Activities do our
Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
What value do we deliver to
the customer?
Which one of our customers
problems are we helping to
solve?
What bundles of products and
services are we offering to
each Customer Segment?
Which customer needs are we
satisfying?

What type of relationship does

each of our
Customer Segments expect us
to establish and maintain with
them?
Which ones have we
established?
How are they integrated with

Motivations for partnerships

Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities

Categories
Production
Problem Solving
Platform/Network
Characteristics
Newness
Performance
Customization
Getting the Job Done
Design
Brand/Status
Price
Cost Reduction
Risk Reduction
Accessibility
Convenience/Usability

Customer
Segments

Key
Resources

Channels

Cost
Structure

the rest of our business model?

How costly are they?
For whom are we creating
value?
Who are our most important
customers?
What Key Resources do our
Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue Streams?
Through which Channels do our
Customer Segments want to be
reached?
How are we reaching them
now?
How are our Channels
integrated?
Which ones work best?
Which ones are most costefficient?
How are we integrating them
with customer routines?
BIL follows an intensive
distribution strategy. The
inherent costs involved are that
the cost involved in distributing
to multiple locations can be
high.
Key resources required are
physical assets such as
manufacturing facilities,
buildings, vehicles, machines,

Mass Market
Niche Market
Segmented
Diversified
Multi-sided Platform
Types of resources
Physical
Intellectual (brand patents, copyrights, data)
Human
Financial
Channel phases
1. Awareness
How do we raise awareness about our companys products and services?
2. Evaluation
How do we help customers evaluate our organizations Value Proposition?
3. Purchase
How do we allow customers to purchase specific products and services?
4. Delivery
How do we deliver a Value Proposition to customers?
5. After sales
How do we provide post-purchase customer support
The business is more Cost Driven than Value Driven as it focuses on leanest
cost structure, low price value proposition, maximum automation, volume
driven and also focuses on selling to the BoP segments.
BIL has been consistently achieving consumption driven growth. It enjoys
economies of scale on account of bulk buying and higher pricing power on
their reputed brands.
Economies of scope have been realized in this industry and firm because of
the large number of related products provided by the company.

systems, point-of-sales
systems and distribution
networks. Of these, the
manufacturing facilities are
capital intensive and the
distribution network is the
most expensive.
Key activities are production,
marketing and sales. Marketing
activities are the most
expensive.

3.7 3rd Generation Balanced Scorecard (Amalgamation of 1st Generation BSC and Activity
System Map)

Financial Perspective: Grow revenues, increase profitabilities and eliminate waste. Industry growth, secure base and expand
globally.
Customer Perspective: Create awareness; establish brand and image, foster loyalty. Be a low cost supplier and tailored
products.
Internal Business Processes Perspective: Set market standards, differentiations and become segment leader. Maintain lowest
costs, consistent production and distribution process.
Learning and Growth Perspective: Manage brand and diversify customer base, adapt to evolving environment. Link strategy
to reward system and foster a culture that supports innovation.

Britannias ruralurban dual distribution structure

3.8 SWOT Analysis

STRENGTH

Strong Brand Portfolio

o Only company in India that has offerings in bakery products across the segment for all income groups due to which
its possible for them to acquire large share of wallet of consumers.
o Holds nearly 30% market share in the Indias biscuit category.
High Brand Recall
o High shelf visibility due to its presence across range of bakery products like biscuits, rusk, cakes & dairy products like
milk, butter & cheese etc.
o Focused marketing & advertising campaigns resulted into positive word of mouth & high TOMA (top of mind
awareness).
Long serving name in the Indian market
o Leading food company in India with over Rs. 6000 crores in revenues, delivering products in over 5 categories through
3.5 million retail outlets to more than half the Indian population.
In depth product portfolio
o Different offering for different income groups.
Market penetration and distribution
o Strong market presence due to robust distribution system.

WEAKNESS
Over dependency on the biscuit business
o Britannias 75% revenue comes from biscuit business. Although they are market leader in the same but over
dependency on the same may affect their long term existence in the business.
Various brands got commoditized over time
o Brands like Bourbon & glucose biscuits of Britannia got commoditized over time. Parle also introduced Parle bourbon
biscuits which may create confusion.
Low Overseas presence
o Apart from India, Britannia has presence only in Dubai and Oman, and that too through subsidiaries.
Struggling Dairy Business
o Dairy business contributes only 5% of the companys overall revenues.
OPPORTUNITY
Emerging Dairy Industry
o With organoleptic (flavor, taste & color) features shaping the dairy industry, improving dairy products can help the
company to improve their market share & reposition itself in dairy market.

Changing lifestyle & demand for healthier food products

o Improvement in literacy rate, health awareness, changing lifestyle,& increase in disposable income are shaping the
demand for healthy food products.
Overseas Market
o Expanding its business to other overseas market can help the company to emerge as a global player in the food
products.

THREAT
Competition in the market
o Increasing number of players in the market (Local Players- Anmol, Priya and National Players- ITC, Parle). Also, there is
a threat from counterfeit products.
o Lower price offering from competitors.
Local dairies and bakeries
Rise in cost of Raw Material
o Increase in price will result in decrease in profitability.
Buyers Power
o With highly diversified consumer goods market where there are lots of brands claiming different sorts of benefits, its
very difficult for consumers to stick to a particular brand & hence results into brand switching.

3.9 Competitor Analysis (identify competitors)

3.9.1 Based on Critical Success factors

3.9.2 Based on Financial indicators

Margins sustain expansion

Robust PAT Growth

Robust Free Cash Flow generation

Topline growth to remain strong

Profitability Ratio Analysis

ROCE : Initially, BILs ROCE follows an irregular pattern, rising one year and falling the next. However, from 2010 onwards the
ROCE has shown an upward trend. Although the Capital fell in 2005, the company maintained the same till 2012, after which
it saw an increase to 239.1 and 239.9 in the last two years. The PBIT has fluctuated over the years, which lends fluctuation to
the overall ratio.
ROE : Similar to the ROCE, ROE also rises one year and falls the next till 2010 from when the ROE has shown an increasing
trend. Equity rose till 2009 after which the companys equity fell to 3962.5 from 8245.4, because the company decided to
increase its issue of dividend to twice the value of that in 2008, due to which reserves also decreased. Equity has risen after
this period. PAT fluctuates throughout the entire time period.
PAT/ no of shares: This ratio also follows the same pattern as the ROCE and ROE. PAT/No. of shares increase one year and
decrease the next. 2008 showed a sharp increase and 2010 saw a very sharp fall in the ratio. This is because in 2010, the
number of shares increased from 23890163 to 119450815. After 2010, PAT/No. of Shares has been steadily increasing.
Dividend / share: Dividend per shares rises gradually from 2004 to 2008. The ratio then registers a very steep spike in
2009, as dividend issued was doubled over the previous year. There is another steep fall immediately after, in 2010. This is
because in 2010, the number of shares increased from 23890163 to 119450815. After this, Dividend/Share has been rising
steadily.

PAT/Sales : PAT/Sales registered the first fall in 2007 where it fell to 0.0452 from 0.085. It rose to 0.073 the next year and
again fell to 0.056 in 2009 and 0.0335 in 2010. After that, the PAT/Sales has been gradually increasing.
Solvency Ratios Analysis
Equity/ TA: Equity/TA saw a irregular pattern till 2008. In 2010, the ratio sharply fell to 0.2624 from 0.608. After that, the
ratio has been steadily rising. This is because equity rose till 2009 after which the companys equity fell to 3962.5 from
8245.4, because the company decided to increase its issue of dividend to twice the value of that in 2008, due to which
reserves also decreased. Till 2010, BIL was largely equity driven but after 2010, it has been using debt to finance its
operations.
Reserves/ TA: Reserves/TA follows the exact same trend as Equity/TA ratio. This is because equity rose till 2009 after which
the companys equity fell to 3962.5 from 8245.4, because the company decided to increase its issue of dividend to twice the
value of that in 2008, due to which reserves also decreased.

Liquidity Ratios Analysis

Working Capital: Working Capital rises in the 2004-2008 time period, peaking in 2008 at 1493.2. The Working Capital falls in
2009 and 2010, rises in 2011, and has since seen a decline with Working Capital being in the negative in 2014. Negative
working capital shows that the current liabilities are greater than the current assets. Majority of the current liabilities are due
to creditors. Negative Working Capital does not seem to be an issue as the company is still able to show profitability, which
can be shown from the increase in ROCE during 2010-2014, with 2014 showing an ROCE of 22.84535223.
Liquid Ratio: Liquid Ratio follows an irregular pattern, rising one year and falling the next.
Absolute Ratio: Absolute Ratio increased from 2004-2007 and then fell in 2008-2010. After that, the ratio has shown a
cyclical trend.
Market Price of Britannias shares fell steeply in 2010, from 1599.5 to 370.55 because the company had issued bonus
debentures in 2010. Some of the existing Shareholders of the company were wondering whether the company has taken the
right decision by issuing the bonus debentures. They could not come to a satisfactory answer as to why the company
declared bonus debentures for the first time in its history instead of issuing bonus shares as it had announced in the past.

4 Future Growth Strategy for the organization

Britannia Industries
RANK 2015: 61
RANK 2014: 118
MARKET CAP FY15 APRIL-SEPT: Rs 32,534 crore
TOTAL INCOME: Rs 7,607 crore
NET PROFIT: Rs 622 crore
ROCE: 58.8%
SO WHAT: Jumps 57 slots to get into Top 100; market cap rises 159.7%

4.1 Portfolio Analysis

PLC of Britannia Biscuits
Introducti
on
Stage

Tiger
50-50
Good Day
Marie Gold

Growth
Stage

Sales- Increases in every product

Competitors- Parle-G products
Stability- Stable in the market
New features- Packaging, Quality, Quantity

Maturity
Stage

There are many competitors in the market

4.1.1 Based on BCG Matrix

The product brands in the Star category are Good Day, Nutrichoice and Tiger. They have high relative market share and
market growth potential. The product brands in the Cash Cow category are 50:50 and Marie Gold. They have high relative
market share but their market growth potential is limited. The Question Mark brands for Britannia are Little Hearts and Pure
Magic. They have low relative market share but their growth potential is high. The Dogs in Britannias brand portfolio is Milk
BIkis, Jim Jam + Treat and Bourbon. Their market growth potential and relative market share are low. Star brands should be
promoted, Cash Cows should be harvested, Question Marks should be promoted or divested as per the call of the
management and Dogs should be divested.
As of February 4, 2016, Britannia Industries Ltd is cutting underperforming biscuit brands and pack sizes from its large
portfolio as the company looks to increase its market share and margin gains by aiming its product innovation efforts and
advertising spending on five key brands. Britannia, which has 13 biscuit brands, has identified five so-called power brands
Good Day, NutriChoice, Tiger, 50:50 and Marie Goldaround which the company will lead its innovation and marketing
efforts. By consolidating brands, BIL is also consolidating their investments. All the power brands operate in each of the large
biscuit categories. They are trying to take away monies from their smaller, less productive brands and putting the money
back into their power brands.

4.2 Companys Strategic Roadmap for future

Near Term (<- 2 years)

Mid Term (2-5 years)

Long Term (5-10 years)

Growth Areas

Rural Focus

New distribution strategy, launches

and renewed focus on rural areas

Rural focus, Global Expansion

High Level Tasks

Reduce input costs and cost

rationalisation efforts

Managing talent and re-jig the

distribution network.

Reducing margin, Better distribution

networks

Potential Benefits to be achieved

Margin expansion to continue

Increase in bottom line

Increase in market share and

revenue

Rewards

Increase in the EBITDA margin.

Market cap rise, top-line growth and

rise and Increase in turnover.

Larger talent pool, better revenue

stream and better access to
resources

Risks

Biscuit industrys sales growth may

drop

Continued weak demand and

increasing competition

Financial risk and cultural

differences

Key Success Factors

Cost minimization and rural focus

New distribution strategy and rural

focus

Global distribution network and a

strong marketing strategy.

Key Risks

Increased competitive intensity: Rising competitive intensity (especially from players like Patanjali) can
potentially result in volume pressures. Also, it can result in increased A&P spends and investments towards the
brand resulting in margin pressure. Maintaining market share becomes challenging in such a scenario.
Raw material prices: Rise in the raw material prices like wheat, flour, RPO, milk can lead to pressure on the gross
margins. Inability to pass on the pricing pressure to consumers due to higher competition can result in further
pressure.
Unorganised segment: Softening of the raw material prices leads to cropping up of many unorganised players
which can lead to pressure on market share.
Rural slowdown: Biscuit is a highly penetrated category and slowdown, particularly in rural areas, will lead to
slowing of the category growth rates.
No recovery in urban growth: Delay or no recovery in urban growth will lead to slowing of the fast growing and
higher margin premium segment and can potentially lead to price wars in that category.
Failure in new innovations and segments: Britannia has a strong pipeline of new innovations and it also plans
to solidify its hold in the dairy, cake, rusk and international markets. However, failure of new launches and
disappointing entry in new segments cannot be ruled out completely.
Regulatory hurdles: Any debacle like that of Maggi (FSSAI issuing notice against Maggi) can potentially impact
the brand name and the category growth itself.

States with lower GDP per capita where Britannia can move up the value segment in the
biscuit portfolio led by distribution
expansion
In light of this huge distribution gap with
Parle, we envisage Britannia to potentially
surpass industry growth in next 45 years.
Currently, while Parle has retail presence in close
to 5.8mn outlets, Britannia has 3.6mn outlets. This
gap of 2.2mn outlets is large enough to sustain
Britannias growth momentum. Filling this gap will
help the company garner ~12.7% sales CAGR over
ensuing 4 years.

Correlation of GDP with industry and Britannia

Given that biscuit is also the largest category in terms of
impulse sales, growth will certainly receive a boost once
GDP recovery kicks in. Britannia will benefit more because
the average multiplier effect of biscuits sales growth of
Britannia to GDP is better than overall biscuit industry.
While the biscuit industry has an average multiplier of
0.9x to GDP, Britannias is close to 1.0x GDP. Also, with
recovery in GDP, growth rate of biscuits in the higher price
or premium category will see better growth compared to

rest of the portfolio.

Exhibit 1 (BIL Financial Ratio)

Profitability
ROCE
ROE
PAT/ no of shares
Dividend per share
PAT/Sales
Expenses/Sales
COGS/Sales
OPEX/Sales
Dep/Sales
Amortisation/sales
Interest/Sales
Solvency
CE/TA
Debt/TA
Equity/TA
Reserves/TA
PBIT/Interest
Liqudiity
Working Capital (CA-CL)
Current Ratio= CA/CL
Liquid Ratio = (CAStock)/CL
Absolute Cash Ratio
=Cash/CL
Average Debtors/Sales
Average
Creditors/Purchases
Average Stock/ COGS
Market Based Ratio
Price to Book Ratio
Price to Earnings Ratio

2010

2011

2012

2013

2014

5.232315
0.294032
48.76903
29.15426
0.033496
0.997197
0.76709
0.966384
0.010792
0
0.001213

9.870657
0.321937
12.16317
7.554574
0.033742
0.982933
0.780198
0.961799
0.010356
0
0.008767

12.15739
0.359088
15.63321
9.878543
0.037158
0.977368
0.754708
0.947829
0.009416
0
0.007575

15.47135
0.364721
19.56648
9.950988
0.041045
0.971017
0.743056
0.938476
0.010018
0
0.006623

22.84535
0.431133
30.83573
14.05536
0.057719
0.952234
0.719946
0.912778
0.009892
0
0.000849

0.549097
0.286659
0.262438
0.246616
29.62085

0.536229
0.270872
0.265357
0.25131
6.246623

0.557555
0.253795
0.30376
0.289806
7.629104

0.487774
0.146927
0.340848
0.328138
9.801802

0.45889
0.002955
0.455934
0.443182
100.7463

302.9
1.098446

631.6
1.183104

86.9
1.018568

44.2
1.009276

-1513
0.766007

0.226307

0.280918

0.201765

0.313628

0.198639

0.075988
0.013296

0.083348
0.015827

0.066108
0.012633

0.135314
0.014912

0.101732
0.00978

0.040558
0.100569

0.06631
0.092634

0.083607
0.10079

0.076294
0.078295

0.099454
0.079534

165.8632
32.79746

37.78124
30.46493

43.53591
37.90008

53.64782
26.79582

71.52255
27.34977

Refrences
http://goodmorningishan.blogspot.in/2011/08/marketing-strategy-of-britannia.html
http://www.livemint.com/Companies/7Kb068wLD1Mruc0PlCBTGO/Varun-Berry-charts-his-strategy-for-Britannia.html
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http://www.moneycontrol.com/news/results-boardroom/expect-rs-2k-cr-revenuebiscuit-cakes-biz-britannia_4161741.html
http://www.marketing91.com/marketing-mix-britannia/