Analysis Of Britannia Industries Limited Marketing Essay

summary Of Britannia Industries Limited Marketing EssayAn outline On The away Factors alter The Comp exclusively And The Role And meaningance Of StakeholdersBritannia Industries Limited (BIL), formerly k at presentn as Britannia, was consecrateed in the year 1892. Britannias credit line was flourishing. In 1910, Britannia mechanized its operations, and in 1921, it became the first f localizernity east of the Suez Canal to use gas ovens. In 1979 it was renamed to Britannia Industries Limited, with an Indian shareholding of more than 60%. After few years, in 1997, Britannia make its de take out in the dairy farm products market. Britannia is not only k outrightn for the graphic symbol of its products but excessively for the innovative approach towards them and the marketing. In 2002, Britannias New note Division formed a joint venture with Fonterra, the worlds second largest dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. Britannia was rated One amongst the Top 200 Small Companies in the orb (200 Companies for 2002 (2002) Forbes.com) and was awarded The Economic Times as The Second Most Indias Trusted Brands (Dettol is to the highest degree trusted brand (2002) The Times of India). Britannias market is not only particular to India but overly extends to few countries in Middle East, Seychelles, Singapore, Ghana and USA. Today, the company is operations extend from manufacturing bakery products wish well biscuits and breads to the mathematical product of dairy products standardised cheese and butter.Aim of the ReportTo analyse the macro and micro outside(a) environment with the aid of bastards like PESTEL and Porters cardinal Forces respectively.To spot of stakeholders and the importance of stakeholders in influencing the strategies with reference to corporal amic up to(p) Responsibilities.Macro External Environment abstractMacro external environment here includes the factors such(prenominal)(prenominal) as issues colligate to politics, economical reforms and achievements, social behaviour, technological enhancements and inventions, environmental assortments and environmental concerns and legislation and legislative reassigns. All these factors bear a signifi brush asidet effect on any sedulousness and business. A business has take into consideration all such effects and then formu deep its strategies and policies to work along with them and prosper.PESTEL analysis tool suffices in determining the effect of all such factors on an attention and businesses. With the help of PESTEL analysis we result be seeing the affects of such factors on Indian Bakery and Dairy Industry.PESTEL analysis is a technique for identifying and listing the political, economic, social, technological, environmental and legal factors in the general environment most pertinent to an organisation. (Boddy, D (2005). Management An Intoduction. 3rd ed. UK Pearson Education. 88.)Type of FactorsEffecting FactorsPolitic alEconomical societalTechnologicalEnvironmentalExemption on Customs on lollipop Raw Material Import deficit of MilkNeed for healthful Eating HabitsCloning of LivestockChange in the Climatic Conditions bath on BiscuitsRise in carbohydrate Production and Duty eject prick ImportsProblems with Cloned LivestockNew be on PackagingRemoval of Import Duty on Dairy ProductsGlobalizationIncentives to instal Cold retention FacilitiesRequirement for LogisticsPoliticalExemption on Customs Duty on Sugar Raw Material Importimputable to the famine in the production of excoriation the deadline for the exemption on customs duty duty on raw sugar imports has been extended by the g overnment to April 1, 2011 (Dey, A Jha, Dilip K (2010) Duty-free sugar imports extended till April 2011, phone line Standard). Since sugar is a major input in the bakery, the impairment of sugar highly influences the price of inputs of the bakery industry. Exemption on customs duty will help in purchasing sugar at lower appeal, which in acquire will control the cost of production.VAT on BiscuitsThe VAT of 12.5% on Biscuits, being the only abuted nourishment item to pull such high VAT pass judgment, will affect the pricing of the product (Bhushan, R (2009) Biscuit prices to rise by 10%, The Economic Times). Price of the biscuits magnate need to be increased due to the high VAT rates which may result in switch of brands due to the highly warring market.Removal of Import Duty on Dairy ProductsThe whole-sale price found inflation indicates that the draw prices have moved up by 14.73% over the suffer year. Worried about the rising prices governing body announced the removal of duty on Skimmed Milk Powder (SMP) and some otherwise dairy products (Govt removes import duty on dairy products (2010), Business Standard). The imports at cheaper rate would help in reduce the cost factor for dairy products.Incentives to Build Cold Storage FacilitiesWastage of food items due to lack of co olness memory facilities lead to a loss of Rs. 500 billion every year. The political relation announces schemes and incentives to attract investments in cold storage warehousing (Union Budget 2010 Cold-storage incentives to attract fresh funds (2010), The Economic Times). Increase in the number of cold storage facilities would help in preserving products better and reduce the wastage cost.EconomicalShortage of MilkEven though the milk production has risen by 4.6% compound annual average growth rate, it still cannot match up with the increasing demand. The demand for milk has been growing at a fast rate than the growth rate of milk production resulting in the shortage of milk supply (Milk output would stagnate (2010) The Economic Times). India cannot meet its pass judgment demand if the demand and supply rise at the self very(prenominal)(prenominal) rate. For the same the reason, the milk prices are on a constant rise. Price of milk increased by 12.6% to 13.6% (Goyal, K (2010) In dias Food-Price Inflation Holds Near 11-Year High- Business Week). This can drive an increase in the input cost for the dairy products and which in turn can lead to hike in price or lower profit margins. If the company increases the price of its products, it may affect the sales as it might lose on consumers.Rise in Sugar Production and Duty Free Sugar ImportsThe total sugar production in the first six months ending September 2010 is pass judgment to be 22% more than the output in the unchanged phase last season, the total production expected is at 16.7 million (Press Trust India (PTI) (2010) Sugar output rises 22% in first half of 2009-10, Business Standard). Due to the shortage in the production of sugar the deadline for the exemption on customs duty on raw sugar imports has been extended by the government to April 1, 2011 (Dey, A Jha, Dilip K (2010) Duty-free sugar imports extended till April 2011, Business Standard). The increase in sugar production and the duty exemption on raw sugar can help in purchasing sugar at lower prices and this in turn can help in producing goods at lower prices.GlobalizationGlobalization a universal phenomenon is affecting each and every industry. The world is coming closer, the communication gap is end and the businesses are going global. This can serve as an opportunity to broaden the business to a global level but on the other hand there is a threat of new entrants from international market.Requirements for LogisticsLogistics in India suffer due to the poor infrastructure and other limitations. in that respect is a high demand for sophisticated third party logistics so the home(prenominal) logistics service providers are trying to improve their service. International participation is also expected in the logistics industry (Pandey, S Basu, A (2010) Logistics cos surprise up supply chain to meet rising demand, The Economic Times). Sophiscticated logistics administration will help in proper supply chain worry and o n clip delivery of goods, which help in maintaining the shelf career of goods on meeting the demand on time.SocialNeed for well-preserved Eating HabitsStudies say that Indians are more habituated to Coronary arterial blood vessel Disease (CAD), which is the major independent risk factor causing cardiovascular diseases, due to the tenuouser calibred arteries found in Indians (Isalkar, U (2009) Indians more prone to heart disease, The Times of India). This suggests that Indians should move towards more healthy food and diet. This could be a new area to explore for Britannia with its new health associated products like Nuti-Choice biscuits and Actimind flavoured milk.Problems with Cloned LivestockCloned animals are supposed to be suffering from large-offspring syndrome. The mother oxen face a problem in giving birthing to the cloned animals as they are larger than normal. Also these cloned animals suffer from health issues (Gogoi, P (2007) The wooing against cloning, BusinessWee k). It is morally wrong to clone animals as they cause problems to the mother during the birth and moreover the cloned livestock suffer from health issues which might make shaky to consume the produce from them.TechnologicalCloning of LivestockIndia, a late entrant in cloning research, is now moving with a wide pace in cloning technology. Hand guided cloning technique, a technique very different from the conservative cloning practice has been a successful venture (Mahalakshmi, BV Chowdhary, S (2009) Cloning Glory, The Financial Express).New Age PackagingThe new packaging systems help in protecting food from micro-organisms by creating shelter layer. It uses new technologies like oxygen scavenging function, atmosphere control, biodegrability and so on and is low cost (Han, J Packaging Innovations, Bakers Journal). The packaging technology helps in preserving food for longer by protecting them from micro-organisms with the help of new technologies, thusly resulting in longer shel f life of the food. The advantage of low cost packing and longer shelf life could be very practiced for the company in increasing its profit margin.EnvironmentalChange in the Climatic ConditionsClimate plays an of the essence(predicate) role in the agriculture process. The change in the rainfall pattern has been a matter of concern now in India. The agriculture celestial sphere in areas which are monsoon dependent suffered seriously due to the change in the rainfall pattern. The sector suffered a massive loss in terms of total output (Bhosale, J (2009) Farmers worry over climate disturbances, The Economic Times). The loss in crop will affect the input supply and this might delay or cause problems in the production. So the industry might not be able to meet the demands resulting in the loss of customers.LegalRaising the Norms for the Probiotic FoodThere is a need for setting the standards for probiotic food. Clinical tests should be conducted on the probiotic foods to begin w ith they could reach the market for sale. The Indian Council of Medical and enquiry has submitted the proposal for the same to the government (Das, S (2009) Probiotic food likely to come under clinical trial ambit, The Financial Express).Strict norms will help in ski lift the quality standards but on the other hand the cost and time of production might subsequently increase.Micro External Environment AnalysisFactors that influence the micro external environment are opponent Rivalry, flagellum of New Entrants, Threat of Substitutes, Buyers Power and Suppliers Power. These factors play a vital role in determining the current situation of the business and to plan strategies accordingly.With the help Porters 5 Forces we will be analysing these factors and their immediate effect on the company.Five forces analysis is a technique for identifying and listing those aspects of the five forces most pertinent to the profitability of an organisation at that time. (Boddy, D (2005). Manageme nt An Intoduction. 3rd ed. UK Pearson Education. 83.)Competitor RivalryBIL has a market share of 38% and has been growing at 27%, compared to the industry growth rate of 20% (Saxena, R (2007) battle-scarred Britannia on expansion spree, Business Standard) and has many competitors based on the genius of product.Parle and ITC (Sunfeast) pose a great competition to BIL (Biscuit Industry India (2010), Market Research India). BIL earning major of its income from the biscuits (Britannia Annual Report 2007-08 (2008)), and Parle and ITC are the other major players in biscuit market.BIL is also into the production of dairy products, where the two major players in market are Amul and Nestle. Amul is the loss leader in the dairy industry.There is also a high level of competition from the unorganised baking sector. boilers suit rivalry is high.Threat of New EntrantsThe entry on a small cuticle dairy industry and in the unorganised baking sector is easy. still on the other hand to enter the l arge scale dairy industry and organised baking sector a long amount of investment is required in terms acquiring assets and to establish supply and distribution chains. presidential term regulations pertaining to food norms and others may also be to be unattractive.Looking at the latest trends, the bakery industry is expected to earn huge revenues which might attract new entrants (Vijay, N (2008) Indian Bakery sector foresees high growth and increasing interest in product offering, FnBNews.com).So the threat of new entrants is moderate.Threat of SubstitutesSavoury snacks, crisps, cereals, fruits and other fast food can be substituted for biscuits.Dairy products are equivocal to be replacing with other products as they key ingredients of majority of peoples diet.So the threat is a very moderate threat of substitutes.Buyers PowerThe buyers of these products could be a retailer or the consumer.Both the dairy and bakery industry are price sensitive, so a little increase in price migh t lead the consumer to shift other brand or product.So the buyers power is calculated to be very strong.Suppliers PowerThe major supplies for a bakery industry include wheat, sugar and other agriculture products. And the major supplies for dairy products are milk.Its difficult to bargain with the suppliers of the above mentioned inputs as the price of these inputs is majorly influenced by the production of these inputs. The prices tend to be high as the demand for these products is rising at much faster rate than supply.The collateral supplies include the packaging material.The secondary supplies can be easily substituted with the affordable ones to save on cost.Overall the suppliers power is assessed to be moderate.Conclusion of Five Forces AnalysisThere is an existence of major players in the market with a moderate level of threat of new entrants and substitutes.The suppliers power is moderate but the buyers power is measured to be strong.So the rivalry is suggested to be high.S takeholders and merged Social Responsibilities (CSR)Freedman (1984) defines a stakeholder as any individual or group who can affect, or is affected by, the achievement of the organisations objectives. Further in addition to that, Clarkson (1995), stated that the government and the other communities that effect the working of the business and the market also form as a part of stakeholders. Stakeholders, except the employees, have a high power over the strategic change ideas (Hayes, J (2007). The Theory and Practice of Change Management. 2nd ed. UK Palgrave Macmillan. 153).Internal StakeholdersThe inbred stakeholders are the ones associated with the company internally. For BIL its internal stakeholders would beThe ShareholdersThe Board of Directors, andThe EmployeesCurrently, nearly 51% of shares are held by Corporate Bodies and the rest 49% is held by the frequent (Statement showing shareholding pattern (2009), Britannia Industries Limited). The board consists of 11 members (Compa ny Overview, Britannia Industries Limited) and employees nearly 2000 people (Britannia Industries Ltd. Overview, MarketLine).External StakeholdersThe external stakeholders are the ones who are not immediately associated with company but influence the decision making of the company. To BIL the external stakeholders are as followsCustomersSuppliersContractorsGovernmentRegulatory Agenices (like Food Safety and Standards Authority of India, etc.), andSocietyBritannia being the leader in the baker industry of India has a huge amount of customers to cater. Britannia has to fall out up the tastes and quality preferences of its customers. The government plays an important in influencing the market by creating and changing the policies. BIL has to adhere to the rules and regulations formulated by the regulatory agencies. The suppliers and contractors form an important part of a business. Britannia completely relies on its suppliers and contractors for its raw materials.Corporate Social Resp onsibility (CSR)For years corporate entities followed the practice of providing goods and services and maximizing wealth. But the trends have changed over the period of years. The companies are now expected to be more socially responsible. The company now has to be responsible to the stakeholders, ordination and environment. They are expected to pay back to the environment and society for all the affects that are caused due to its operations (Idowu, S Filho, W (2009) Global Practices of Corporate Social Responsibility. Berlin Springer. 1-2).BIL believes in working with the society and the culture. It gives a premier importance to the nation and its policies. It believes in being a good corporate citizen by not just adhering to the rules and regulations but also by share the association to improve the quality of life. BIL involves itself in initiating and providing support to community health and family welfare, water management, vocational training, educating people and encoura ging the application of modern techniques and technologies. BIL believes in respectable behaviour (Code of Conduct, Britannia Industries Limited).BIL is taking steps toward conserving the environment by employing new process and upgrading the technology. It is trying to reduce its carbon footprints by recycling the waste heat. It has now filed for carbon reduction benefits (Britannia Annual Report 2007-08 (2008)).BIL has taken steps towards helping the society by joining the commissariat program with Global partnership for Improved Nutrition (GAIN) and the Nandi Foundation. Along with these organisations BIL will is providing mid-day meals in schools and provide nutrition to the deprived (Britannia Annual Report 2007-08 (2008)).