Biscuit Industry: Comprehensive Report

Biscuit Industry
COMPREHENSIVE REPORT
Soundhar P (18mb40) | Ravishankar M (18mb33)| 19/10/19

Industry: Biscuits industry
Parle: Britannia products:
Establishment: 1929 Establishment:1892
Headquarters: Mumbai Headquarters: Kolkata
Vision statement: “To be the part Vision statement: To dominate

of lives of every Indian” the food and beverage market in
India with a distinctive range of
Mission statement: “To Nourish, “Tasty Yet Healthy” Britannia
Strengthen and Delight millions” brands.
Values: An in-depth Mission statement: To dominate

understanding of the Indian the food and beverage market in
consumer psyche has helped us India through a profitable range of
develop a marketing philosophy “Tasty yet Healthy” products by
that reflects the needs of the making every Indian a Britannia
Indian masses. We have made it a consumer. “We want to be part of
tradition to deliver both health and our consumer-at home out of
taste, with a value-for-money home, a natural part of his life”
positioning that allows people Values:
from all classes and age groups to Leadership
enjoy Parle products to the fullest. We have the courage to shape a
better future for all our
stakeholders.
Ownership
We hold ourselves accountable for
consistent, sustainable results by
focusing on opportunities &
eliminating obstacles, internal or
external.
Passion for learning
We apply thought, creativity &
sound business judgment to meet
aggressive goals & continually
invest in people, products &
processes.
Respect
We value all stakeholders, our
communities & the environment
and treat them with dignity and
respect.
PAGE 1
OUR ANALYSIS:
On comparing both the companies the vision, mission and values of Parle is simple,
they want to be the leader in the Indian market they give importance to strengthen their
products in order to give value for money. Britannia also want to be the leader in the market
they also give importance to leadership and innovation.
ENVIRONMENTAL ANALYSIS:
To analyse the biscuit industry environment we use broad factor analysis i.e. PEST
Political  Taxes by the government (GST 5% to18%)

 Conductive environment for business
 Trade regulations & restrictions
 Health policies etc.
Economical  Inflation rate

 Consumer spending
 Economic growth of 12000 crores in biscuit industry
 Third largest producer after china &USA.
Technology  Technology upgradation

 Improved research and development
 Quality products with new innovation
Social  changing lifestyle

 Distribution and advertising has impact on social
changes
 Positive perception among the people
PAGE 2
Porters model:
Threats of new entrants: Relatively

medium threats to enter because Bargaining power of buyers: High
minimum setup cost to enter the bargaining power of buyers because
industry. But there is nearly 70% of many biscuits are available different
the market share is hold by the top 2 flavours, different prices etc.
companies.
Rivalry: It has more

competitors and
products in the industry
so the rivalry is high.
Bargaining Powers of Suppliers: Low

bargaining power of suppliers because Threat of Substitutes: more substitutes
there are more players in the market. such as bread industry, high packaged
Inputs such as wheat, sugar also play food industry, homemade snacks etc.
major role in this model.
Five generic strategy matrix:

Parle industry & Britannia industry: Both performs cost leadership &
differentiation strategy. In Parle industry Parle G biscuits are produced under cost
leadership strategy likewise tiger biscuits in Britannia industry. To capture more
market share the both company uses differentiation strategy and produces different
products.
PAGE 3
Five generic strategy matrix:
Parle & Britannia

Cost leadership Differentiation
Integrated cost
leadership/differentiation
Focused cost Leadership Focused Differentiation
SWOT MATRIX:
Strengths: Weakness:
 Brand building capabilities  Dependence on retailers and
 Diversified product range grocery stores
 The depth of distribution  Lack of technology upgradation.
 Low and mid-Price range of
products
 Industry catering into masses.
Opportunities: Threats:
 Changing lifestyle  Fluctuations in prices of raw

 Growing demand for nutrite materials, transportation costs&
biscuits distribution.
 Positive perception among people.  Emerging local bakery products.
 Increased substitutes.
PAGE 4
Value chain analysis:
It is the process of identifying activities (primary and supportive) which adds
value to the final product. Here we analyse the value chain on the whole of the
industry players.
Logistic cost:
Logistics cost is the total expenditure done on a single product from the beginning
of procurement to selling it to end customer. logistic cost include procurement of
raw materials cost, transportation cost, storage cost, taxes and fees, external
services cost, energy consumption cost etc. So in this the logistic cost is huge.
Supply chain management:
Supply chain management is one of the most important aspects of running the
right quantity of goods at the right place at the right time. Supply chain should
consider 360degree approach which includes: Purchase Reporting & Tracking,
planning to Dictate Product Mix Models, Tele based Channel Support-Inbound
and Outbound logistic, Demand planning, Introduction & Implementation of New
Trade Offers to boost Sales in sagging periods, Managing Personal Relationship
Portfolio Rewards Redemption –Sourcing, Delivery and Logistics. So the supply
chain is one of the important part to be consider for this industry.
Distribution channel:
Distribution channel majorly consists of following steps manufacturers to

intermediaries and intermediaries to the consumer zone. Here the intermediaries
include distributers, wholesalers, stockiest and importers. The consumer zone
includes the supermarkets and retailers.
Competitive advantage of top 2 companies:

Parle:
 Largest selling brand in glucose segment (nearly 70% of share)

 Low profit margin and high volume sales
PAGE 5
Britannia:
 Good distribution network

 Wide range of products
 In cookies segment (good day) nearly 65% share.
Strategy grouping:
Strategic Group Analysis looks at players’ positions in the competitive

environment and the underlying factors that determine a company’s profitability, as
well as the competitive dynamics of an industry. In this strategic grouping the key
factors considered are preference of customers and the breadth of the product in
the industry.
high
parle
Same strategic
group
Britannia
p
r
ITC
e
f anmol
e Priya gold
r
e unibic
n
c cremica dukes
e
s
horlicks
oreo
low
low Breadth of the product high
PAGE 6
The closer strategic group on the map the stronger competitive rivalry.
Firms within groups are direct competitors.
The gap in the strategic grouping may lead to business opportunities.
Strategic choices
The strategic choices used in the industry are corporate level strategy and
business level strategy. The corporate level strategy the factors like cost of
diversification and market penetration of the products are considered in this
industry. In business level strategy the factors like cost leadership and
differentiation of the products are taken into account.
CSR activities of biscuit industry (parle &Britannia):
Eradicating hunger, poverty and malnutrition promoting education, the

differently abled and livelihood enhancement projects; training to promote rural
sports, nationally recognized sports, Paralympics sports and Olympic sports; Green
plantation; contributions or funds provided to technology incubators located within
academic institutions which are approved by the Central Government; rural
development projects; slum area development.
PAGE 7
References:
https://economictimes.indiatimes.com/markets/expert-view/still-hopeful-of-govt-lowering-18-
tax-on-biscuits-costing-less-than-rs-100-a-kg-mayank-shah-parle-
products/articleshow/70769128.cms
https://www.indianmirror.com/indian-industries/2019/biscuit-2019.html
https://www.myassignmenthelp.net/porters-five-forces-model
http://www.parleproducts.com/policy.pdf
http://britannia.co.in/pdfs/statutory_disclosures/Britannia%20Industries%20Limited-
%20CSR%20Policy.pdf
https://business.mapsofindia.com/top-brands-india/top-biscuit-brands-in-india.html
PAGE 8

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Biscuit Industry

Soundhar P (18mb40) | Ravishankar M (18mb33)| 19/10/19

Parle: Britannia products:

Establishment: 1929 Establishment:1892

Headquarters: Mumbai Headquarters: Kolkata

Vision statement: “To be the part Vision statement: To dominate

Values: An in-depth Mission statement: To dominate

Political  Taxes by the government (GST 5% to18%)

Economical  Inflation rate

Technology  Technology upgradation

Social  changing lifestyle

Threats of new entrants: Relatively

Rivalry: It has more

Bargaining Powers of Suppliers: Low

Five generic strategy matrix:

Parle & Britannia

Focused cost Leadership Focused Differentiation

 Changing lifestyle  Fluctuations in prices of raw

Supply chain management:

Distribution channel majorly consists of following steps manufacturers to

Competitive advantage of top 2 companies:

 Largest selling brand in glucose segment (nearly 70% of share)

 Good distribution network

Strategic Group Analysis looks at players’ positions in the competitive

low Breadth of the product high

Firms within groups are direct competitors.

The gap in the strategic grouping may lead to business opportunities.

CSR activities of biscuit industry (parle &Britannia):

Eradicating hunger, poverty and malnutrition promoting education, the

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