STRATEGIC MANAGEMENT

GROUP 5
Ali Imam Rizvi – 23DM028
Apoorvi Mishra – 23DM041
Arsh Ansari - 23DM044
Akshat Pratap Singh – 23DM024
Aranya – 23DM042
Market Overview
Parle: A Titan in the Indian FMCG Industry
Parle Products Ltd. is a household name in India, synonymous with biscuits and synonymous
with quality and affordability. Founded in 1929, Parle has become a true FMCG giant, not
just in India, but across the globe.
Parle Products Ltd. reigns supreme in the Indian FMCG industry, particularly the biscuit
segment. Its iconic brands, like Parle-G and Frooti, are household names, synonymous with
quality and affordability. Let's delve into the size, growth, segments, and competition
surrounding Parle's market dominance.

Market Share and Revenue Growth:

Dominant Market Share: Parle boasts a 40% market share in the Indian biscuit market, a
testament to its widespread popularity and brand loyalty.
Consistent Revenue Growth: The company has witnessed consistent revenue growth,
surpassing a significant milestone in 2022 by crossing $2 billion in annual revenue. This
makes Parle the first packaged food company in India to achieve this feat.
Employee Strength: Parle's success is driven by a dedicated workforce of over 10,000
employees. These individuals, spread across 21 manufacturing units in India, are the
backbone of the company's operations.

Market Landscape:

Dominant player: Parle holds a commanding 40% market share in the Indian biscuit market,
making it a formidable force.
Increasing competition: International players like Mondelez and local competitors like
Britannia are constantly innovating and challenging Parle's dominance.
Shifting consumer trends: Health consciousness, premiumization, and variety seeking are
influencing consumer choices.

Strategic analysis:

Based on these factors, Parle's strategy appears to be a multi-pronged approach with elements
of growth, stability, and defense:

Growth:
Product diversification: Expanding beyond Parle-G (its core product) with brands like Hide &
Seek, Monaco, and Frooti, catering to different segments and tastes.
Premiumization: Launching premium biscuit lines within existing brands like Monaco,
tapping into the growing demand for higher-quality offerings.
Rural market focus: Increased focus on rural expansion through affordable variants and
improved distribution networks.
Innovation: Regularly introducing new flavors, formats, and ingredients to keep the brand
fresh and exciting.
Stability:

Maintaining core strength: Retaining the iconic status of Parle-G through nostalgia
campaigns, ensuring affordability, and focusing on rural penetration.
Strong distribution network: Leveraging its extensive network across India to maintain
market reach and brand visibility.
Cost efficiency: Optimizing production processes and resource management to maintain
affordability and competitive pricing.

Defense:
Combating Competition:
Parle faces stiff competition from both domestic and international players, including:
Britannia: Britannia Industries Ltd. is Parle's main competitor in the Indian biscuit market,
with popular brands like Good Day and Marie Gold.
ITC Ltd.: ITC's Sun feast brand offers a range of biscuits in different segments.
Mondelez International: This global giant holds a strong presence in the premium segment
with brands like Oreo and Cadbury.
Parle's Strategic Edge:
Despite the competition, Parle maintains its leadership position through:
Strong brand recognition and loyalty: Parle-G enjoys immense brand loyalty and nostalgia
among consumers.
Widespread distribution network: Parle boasts an extensive network reaching even remote
corners of India.
Affordability: Parle's products remain accessible to a large segment of the population, making
them a staple in many households.
Product innovation: Parle constantly introduces new flavours, formats, and varieties to keep
up with changing consumer preferences.
Parle's future success hinges on its ability to:
Maintain its core strengths: While diversifying its product portfolio, Parle must not lose sight
of its core values of affordability and quality.
Adapt to changing consumer trends: Health consciousness and premiumization are growing
trends, and Parle needs to cater to these demands.
Strengthen its rural presence: The rural market offers immense potential for growth, and Parle
needs to further penetrate this segment.
ORGANIZATIONAL STRUCTURE
gr

GROWTH PATH
Parle Products stands as a titan in the Indian FMCG industry, particularly the biscuit segment.
To maintain its dominance and drive future growth, the company can explore multiple
pathways. Here is a breakdown of some key approaches:
Product Expansion and Innovation:
 Premiumization: Expand offerings within existing brands like Monaco with premium
biscuits catering to health-conscious and quality-seeking consumers.
 Sanctification: Leverage the growing demand for healthy snacking alternatives by
introducing innovative biscuit lines with fruits, nuts, and seeds.
 Rural-focused products: Develop affordable and locally relevant biscuit variants
specifically for rural markets, considering taste preferences and dietary needs.
 Beyond biscuits: Explore adjacent categories like bakery items, nutritional bars, and
healthy snacks to diversify the product portfolio and tap into new markets.
Market Penetration and Distribution:
 Rural market focus: Enhance distribution networks and marketing efforts in rural
areas to maximize penetration and leverage the high growth potential.
 Modern trade expansion: Strengthen presence in modern trade channels like
supermarkets and hypermarkets to cater to changing consumer shopping habits.
 E-commerce foray: Partner with e-commerce platforms and develop dedicated online
storefronts to reach tech-savvy consumers and facilitate convenience shopping.
 Export growth: Leverage the PLI scheme for food processing and Parle's strong brand
recognition to expand export reach and market share internationally.
Brand and Differentiation:
 Emotional marketing: Strengthen brand loyalty through nostalgia campaigns that
capitalize on Parle-G's iconic status and emotional connection with consumers.
 Digital engagement: Increase brand awareness and build deeper connections with
consumers through social media campaigns and interactive online experiences.
 Sustainability initiatives: Emphasize eco-friendly practices and responsible sourcing
to appeal to environmentally conscious consumers.
 Community engagement: Partner with local communities and support social causes to
build brand goodwill and positive associations.
Acquisitions and Strategic Partnerships:
 Acquiring regional players: Consider strategic acquisitions of smaller regional biscuit
companies to expand their reach and distribution networks.
 Partnerships with ingredient suppliers: Partner with agricultural or technology
companies to secure consistent supply of high-quality ingredients and optimize
production processes.
 Distribution partnerships: Collaborate with established logistics or e-commerce
players to improve efficient distribution and last-mile delivery.
 Joint ventures for international expansion: Partner with international companies to
leverage their expertise and market knowledge for smoother entry into new markets.

SWOT ANALYSIS
Strengths:
 Dominant market share: Parle boasts a 40% market share in the Indian biscuit market,
solidifying its position as a leader.
 Strong brand recognition: Iconic brands like Parle-G and Frooti enjoy immense brand
loyalty and nostalgia among consumers.
 Extensive distribution network: Parle's reach extends to even remote corners of India,
ensuring product availability across diverse markets.
 Affordability: Parle's products cater to a wide range of income levels, making them
accessible to a large segment of the population.
 Cost efficiency: Optimized production processes and efficient resource management
allow Parle to maintain competitive pricing.
 Diversification: Beyond biscuits, Parle offers confectionery, rusks, cakes, and snacks,
mitigating risks and catering to broader consumer needs.
Weaknesses:
 Heavy reliance on core brands: Parle-G's dominance can overshadow other offerings,
hindering diversification efforts.
 Limited premium presence: Parle may lack presence in the premium segment
compared to competitors like Britannia and Mondelez.
 Slow innovation: Some criticize Parle's innovation pace as slow compared to its
competitors, potentially leading to product fatigue.
 Rural-urban gap: While strong in rural markets, Parle may need to adapt its approach
to cater to evolving urban consumer preferences.
 Marketing focus on nostalgia: Overreliance on nostalgia campaigns for Parle-G might
not resonate with younger generations.
Opportunities:
 Premiumization: Growing demand for premium offerings creates space for Parle to
expand its portfolio in this segment.
 Health and wellness trend: Capitalizing on the growing health consciousness, Parle
can introduce healthier biscuit options with added nutrients.
 Rural market growth: The vast potential of the rural market presents an opportunity
for Parle to further penetrate and tailor offerings to local preferences.
 E-commerce boom: Leveraging online platforms can widen Parle's reach, cater to
tech-savvy consumers, and boost convenience.
 International expansion: Parle's strong brand recognition can be leveraged to expand
its reach beyond India and tap into new markets.
Threats:
 Intensifying competition: International players like Mondelez and domestic
competitors like Britannia pose significant challenges to Parle's market share.
 Changing consumer preferences: Evolving tastes and health concerns require Parle to
constantly adapt its product offerings and marketing strategies.
 Rising input costs: Fluctuations in ingredient prices and other input costs can squeeze
Parle's margins and impact affordability.
  Counterfeiting and quality concerns: Maintaining product quality and combating
counterfeiting threats are crucial for brand reputation and consumer trust.
 Economic slowdown: Potential economic downturns can affect consumer spending
and negatively impact Parle's sales.

PESTEL Analysis of Parle Brand in the FMCG Industry

P - Political:
Government policies: FSSAI regulations and changing food safety norms can impact
production processes and costs.
Taxation: GST rates and potential future changes can affect product pricing and affordability.
Subsidies and incentives: Government initiatives for the food processing industry can present
growth opportunities for Parle.
Political stability: A stable political environment fosters consumer confidence and economic
growth, benefiting the FMCG sector.
E - Economic:
Economic growth: India's growing economy presents a vast market for Parle's products.
Inflation: Rising input costs and inflation can squeeze Parle's margins and impact its pricing
strategy.
Fluctuating currency: Currency fluctuations can make importing ingredients and exporting
products more expensive.
Rural development: Increased disposable income in rural areas presents a significant growth
opportunity for Parle.
S - Social:
Changing consumer preferences: Health consciousness, rising disposable incomes, and
premiumization trends require Parle to adapt its offerings.
Urbanization: Growing urban population leads to different consumption patterns and
demands for convenience.
Social media influence: Effective social media engagement can strengthen brand image and
reach new consumer segments.
Evolving family structures: Smaller families and busy lifestyles create demand for convenient
and quick food options.
T - Technological:
Automation and AI: Implementing automation in production can improve efficiency and
reduce costs.
E-commerce and online platforms: Leveraging e-commerce can expand reach, access new
markets, and offer convenient shopping experiences.
Food technology advancements: Innovative technologies in food processing and packaging
can offer Parle new product development opportunities.
Sustainability concerns: Consumers are increasingly conscious of environmental impact,
requiring Parle to adopt sustainable practices.
E - Environmental:
Climate change: Changes in weather patterns and agricultural yields can impact ingredient
availability and costs.
Water scarcity: Water conservation practices are crucial for sustainable production and brand
image.
Waste management: Parle needs to address packaging waste and promote responsible
disposal practices.
Consumer preference for eco-friendly products: Offering sustainable packaging and
environmentally conscious product lines can resonate with consumers.
L - Legal:
Labor laws and regulations: Maintaining fair labor practices and adhering to labor laws is
important for ethical production and brand reputation.
Intellectual property protection: Protecting Parle's brands and product formulations from
imitation is crucial.
Food safety regulations: Stringent food safety regulations require Parle to maintain high
quality standards and ensure product safety.
Data privacy laws: Complying with data privacy regulations regarding consumer information
is essential.

Porter's Five Forces Analysis of Parle Brand in the FMCG Industry

Applying Porter's Five Forces framework to Parle provides insights into the competitive
landscape of the Indian FMCG biscuit market:

1. Threat of New Entrants:

High Barriers to Entry: Large-scale manufacturing, established distribution networks, and

brand loyalty pose significant barriers for new entrants.
High Capital Investment: Setting up production facilities and marketing campaigns requires
substantial financial resources.
Government regulations: Complying with FSSAI norms and other licensing requirements
adds complexity and cost.
2. Bargaining Power of Suppliers:

Moderate: Parle's significant volume purchases give it some leverage with ingredient
suppliers.
Multiple suppliers: Diversified sourcing reduces dependence on any single supplier.
Alternative ingredients: Availability of substitutes like wheat flour for other grains limits
supplier power.
3. Bargaining Power of Buyers:

Strong: Consumers have a wide variety of biscuit brands and substitutes to choose from,
increasing their bargaining power.
Price sensitivity: Affordability is a key factor for Indian consumers, making them price-
sensitive.
Rise of private labels: Private label offerings from supermarkets can exert competitive
pressure on Parle's pricing.
4. Threat of Substitutes:

High: Bakery products, snack bars, cookies, and confectionery compete with biscuits for
consumer spending.
Health consciousness: Increasing focus on health leads consumers to choose healthier
alternatives like fruits and nuts.
Regional preferences: Local snacks and sweets can challenge Parle's dominance in specific
regions.
5. Competitive Rivalry:

Intense: Major competitors like Britannia, ITC, and international players like Mondelez pose
severe competition.
Product differentiation: Differentiating through brands, flavours, innovation, and marketing is
crucial for success.
Price competition: Intense competition often leads to price wars, squeezing margins
 Growth Market
Category Products Strategy
Rate Share

* Parle-G biscuits * Hide & Seek Invest heavily to maintain market

Stars High High
biscuits * Frooti mango drink share and expand further.

* Glucose biscuits * Utilize the cash generated to

Cash Cows Butterfingers biscuits * Poppins Low High invest in other categories and
candies support Stars.

* Baker's Choice bread * Appy

Question Invest selectively based on
Fizz drink * Kaccha Mango High Low
Marks potential and market response.
candy

Consider divesting or phasing out

* Melody toffees * Mango Bite these products.
Dogs Low Low
candy * Parle wafers

BCG MATRIX

Financial Health Analysis

Parle Agro Industries Ltd. Financial Health Analysis (FMCG Industry)

Parle Agro Industries Ltd. (Parle) is a major player in the Indian FMCG industry, known for
its biscuits, confectionery, and snacks. Here is an elaborate analysis of its financial health,
including a table summarizing key metrics:
Financial Highlights:
 Revenue: Parle's revenue has grown steadily over the past few years, reaching Rs.
17,134 crores in FY23 (YoY growth of 12.5%). This growth is attributed to increasing
demand for its products, expansion into new markets, and successful product
launches.
 Profitability: Parle's profitability has also improved in recent years. Its operating
profit margin stood at 15.8% in FY23, up from 14.2% in FY22. This improvement is
due to cost control measures and efficient operations.
 Debt: Parle's debt-to-equity ratio has remained relatively low, at around 0.45 in FY23.
This indicates a healthy financial position and strong debt servicing ability.
  Return on Equity (ROE): Parle's ROE has been consistently above 20% in the past
few years, reaching 23.1% in FY23. This indicates strong shareholder returns and
efficient use of capital.

Key Metrics (FY23):

Metric Value

Revenue Rs. 17,134 crores

Operating Profit Rs. 2,713 crores

Operating Profit Margin 15.8%

Net Profit Rs. 1,842 crores

Debt-to-Equity Ratio 0.45

Return on Equity (ROE) 23.1%

REFRENCES:
https://economictimes.indiatimes.com/parle-industries-ltd/stocks/
companyid-2047.cms
https://iide.co/case-studies/swot-analysis-of-parle/
https://www.mbaskool.com/pestle-analysis/companies/18106-parle.html
https://readitenjoyit.wordpress.com/2018/09/27/bcg-matrix/
https://www.moneycontrol.com/financials/parlesoftware/ratiosVI/PS13