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A PROJECT REPORT ON

Growth Of Britannia In year 2001-2010

SUBMITTED IN PARTIAL FULFILLMENT OF BACHELORS OF MANAGEMENT STUDIES

Anna Leela Co llege of COMMERCE

UNIVERITY OF MUMBAI

ACADEMIC YEAR

`2010-2011

SUBMITTED BY: Rahu l Dnyan es hwar Shelar

PROJECTGUIDE: PROF. Uma Ragavan

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DECLARATION

This is to ce rti fy that th e p roj ec t rep ort entit led Growth Of Britannia is sub m itt ed by me in

partia l f u lf illme nt o f th e req uir eme nt of Bachelor s o f Mana geme nt Stu d ies in th e academ ic ye ar

2010-2011. T he inf or mation it comp rises of is tru e an d ori gina l as pe r my rese ar ch an d

ob se rvation .

Signatur e o f th e s tu de nt

(Rahu l.D.Shelar)

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INDEX:

INTRODUCTION

REASON FOR GROWTH

HISTORY

BUSINESS

MARKETING STRATEGY

PROMOTIONAL STRATEGY

COMPETITORS

MARKET POTENTIAL

SWOT ANALYSIS

WEBLIOGRAPHY

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Intro duction :

Indian Biscuits Industry is the largest among all the food industries and has a turn over of around 3000 INR 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 coversaround 80 percent of the total bakery products in India. Biscuits stands at a higher valueand production level than bread. This belongs to the unorganized sector of the bakeryIndustry and covers over 70% of the total production.

The Federation of Biscuit Manufacturers of India (FBMI) has confirmed a bright future of Indian Biscuits Industry. According to FBMI, a steady growth of 15 percent per annum inthe next 10 years will be achieved by the biscuit industry of India. Besides, the export of biscuits will also surpass the target and hit the global market successfully.

REASONS FOR GROWTH:--

Econo m ic libe ra lization, increase in pe r cap ita income , variou s tax rel ief p o licies , easyaccess ibi lity o f f inan ce , laun ch o f new pro ducts an d e xcitin g d iscount offe rs m ade by de a le rs a llto ge th e r hav e res u lted in to a stu pe ndou s growth o f In dian Biscuit industr y.

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History:

It was started way back in 1892 with an investment of Rs. 295. Initially, biscuits were

manufactured in a small house in central Kolkata. Later, the business was acquired by

the Gupta brothers and operated under the name of V.S. Brothers. In 1918, C H Holmes,

an English businessman in Kolkata was taken as a partner and The Britannia Biscuit

Company Limited (BBCo) was launched. The Mumbai factory was setup in 1924

and Peek Freans , UK acquired a controlling interest in BBCo. Biscuits were in big

demand during World War II, which gave a fillip to the companys sales. The company

name was changed to the current Britannia Industries Limited in 1979. In 1982 Nabisco

Brands Inc., USA became a major foreign shareholder

Kerala businessman K. Rajan Pillai secured control of the group in the late 1980s,

becoming known in India as the 'Biscuit King'. In 1993, the Wadia Group acquired a

stake in ABIL, UK and became an equal partner with Groupe Danone in Britannia

Industries Limited. In what The Economic Times referred to as one of [India's] most

dramatic corporate sagas. Pillai ceded control to Wadia and Danone after a bitter

boardroom struggle, [4] then fled his Singapore base to India in 1995 after accusations of defrauding Britannia, and died the same year in Tihar Jail .

Growth and profitability

The company is a growing and profitable one. Between 1998 and 2001, the company's

sales grew at a compound annual rate of 16 per cent against the market, and operating

profits reached 18 per cent. More recently, the company has been growing at 27 per

cent a year, compared to the industry's growth rate of 20 per cent. At present, 90 per

cent of Britannias annual revenue of Rs 2,200 crore comes from biscuits

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Business

Dairy products

Dairy products contribute close to 10 per cent to Britannia's revenue. Britannia trades

and markets dairy products, and its dairy portfolio grew at 47% in 2000-01 and by 30%

in 2001-02. Britannia holds an equity stake in Dynamix Dairy and had outsourced the

bulk of its dairy products from its associate. Its main competitors are Nestle India, and

the National Dairy Development Board (NDDB),and amul(GCMMF)

Joint venture with New Zealand Dairy

O n 27 O ctober 2001, Britannia announced a joint venture with Fonterra Co-operative

Group of New Zealand, an integrated dairy company from procurement of milk to making

value-added products such as cheese and buttermilk. Britannia planned to source most

of the products from New Zealand, which they would market in India. The joint venture

will allow technology transfer to Britannia.Britannia and New Zealand Dairy each holding

49% of the JV, and the remaining 2 per cent held by a strategic investor. Britannia has

also tentatively announced that its dairy business would be transferred and run by the

joint venture.

The authorities' approval to the joint venture obliged the company to start manufacturing

facilities of its own. It would not be allowed to trade, except at the wholesale level, thus

pitching it in competition with Danone, which had recently established its own dairy

business.

Biscuits

The company's factories have an annual capacity of 433,000 tonnes. The brand names

of biscuits includeV

itaMarieGold , Tiger , Nutrichoice Junior ,Good Day , 50 50 , Treat , Pure Magic , Milk Bikis ,Good Morning , Bourbon , Thin Arrowroot , Nice , Little

Hearts and many more.

Tiger , the mass market brand, realised $150.75 million in sales including exports to

countries including the U.S. and Australia, or 20% of Britannia revenues in 2006.

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The company alleged that Danone has violated its intellectual property rights in the Tiger

brand by registering and using Tiger in several countries in 2006 without the consent of

the Britannia Board. Managing Director Vinita Bali claims the company found out in 2004

Danone launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore,

Pakistan and Egypt when it attempted to register the Tiger trademark in some of thesecountries. Whilst it was initially reported in December 2006 that agreement had been

reached, it was reported in September 2007 that a solution remained elusive. In the

meantime since Danone 's biscuit business has been taken over by Kraft, the Tiger brand

of biscuits in Malaysia has been renamed Kraft TiGER Biscuits beginning September

2008.

Britannia initiated legal action against Danone in Singapore in September 2007. The

dispute was resolved with Danone paying Rs 220 million to utilise the brand,

and Britannia securing legitimate right to use the Tiger brand worldwide.

O wnership and relationship between major shareholders

The Wadias' Kalabakan Investments and Groupe Danone have two equal joint venture

companies, Wadia BSN and UK registered Associated Biscuits International Holdings

Ltd., which together hold 51 per cent stake in Britannia. The ABIH tranche was acquired

in 1992, while the controlling stake held by Wadia BSN was acquired in 1995. It was

agreed that, in case of a deadlock between the partners, Danone is obliged to buy the

Wadia BSN stake at a " fair market value ". ABIH which has a separate agreement signedin 1992 and is subject to the British law.

Wadia was to be Danone's partner in the food and dairy business, and product launches

from Groupe Danones were expected but never materialised despite the JV being in

existence for over 11 years in India. Under the 1995 joint venture agreement, Danone is

prohibited from launching food brands within India without the consent of the Wadias. In

addition, the partners agreed there would be the right of first refusal to buy out the

remaining partner in the event of the other wishing to sell its holding.

In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone

invested in a Bangalore-based bio nutrition company, Avesthagen , in O ctober 2006 in

violation of the government's Press Note 1, 2005, which requires a foreign company to

obtain the consent of its Indian joint venture partner before pursuing an independent

business in a similar area, including joint ventures based purely on technical

collaboration. Danone argued that Press Note 1 did not apply to it as it did not have a

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formal technology transfer or trademark agreement with Avesthagen, and that its 25 pct

holding in Britannia was indirect. Wadia also filed a case in the Bombay High Court for a

breach of a non-compete clause in that connection. The court ordered Danone not to

alienate, encumber or sell shares of Avestagen.

In September 2007, the Foreign Investment Promotion Board of India rejected Danone's

claims that it does not need a non-compete waiver from the Wadias to enter into

business in India alone.

In June 2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in

Bangalore.

After a prolonged legal battle, Danone has finally agreed to sell its stake in Britannia and

get out of this line of business. Danone will sell its 25.48% stake to Leila Lands, which is

a Wadia group entity based in Mauritius. The deal is valued to be at $175200 m. Withthis buy-out, Wadia's will hold a majority stake of 50.96%. The year witnessed

unprecedented commodity inflation, particularly in sugar, wheat and milk products, in

the latter half of the year, coupled with a fiercely competitive environment. This

restrained your Company s ability to correct selling prices and had a high adverse impact

on margins and profitability. Consequently, whilst your company added Rs 2817 MM to

gross sales, Profit from Operations declined by Rs 778 MM, excluding provisions for

certain one-off items aggregating Rs 258 MM for certain disputes relating to a long term

lease, excise duty demand and obligation arising from a past acquisition. Net cash flow

from operating activities was Rs 2353 MM, achieved by a disciplined approach tomanaging working capital. Exceptional items for the year include Rs 329 MM towards

amortization of VRS costs and provision of Rs 200 MM for losses arising from Sri Lanka

operations and closure. Earnings Per Share was Rs 48.77.

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The tables below show trends in performance across key parameters:

PERFORMANCE ANALYSIS:

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MARKETING STRATEGY:

Marketing is not Euclidean geometry a fixed system of concept. Rather

marketing is one of the dynamic fields with in the management arena. Themarket faces continually a new challenge everyday and companies must

respond to it positively. Therefore it is not surprising that new market idea keep

surfacing to meet new market place challenges.

The market process is applicable to more than goods and services. Anything

related to market including ideas, events, policies, prices and personalities

comes under market strategy. However it is important to emphasize opportunity

in the market through market strategy.

Following strategies adopted by the organization.

A strong quality of the product and customer satisfaction:

Customers always believe in good quality product. in my survey I found that in

percentage term more people is quality conscious and not price conscious.

Customer satisfaction is very important part of the organization that at any cost

they have to fulfill.

A growing relationship with customer and customer retention:

Nowadays a good relation with customer is very important for organization. Sale

is totally depending on the relation with the customers. Customer's retention is

also a major aspect for growing business. It means keep the old customer and

try to make new customer.

F ocus on competitors activity:

Every organization should must be careful about it's competitors step, becausethey can disturb the growing sales process of the organization.

A growing emphasis on global thinking and local marketing planning:

Companies are increasing by pursuing market beyond their borders. When they

enter other countries they must follow the tradition of that country and also they

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make plan for local market that which type of product has more demand and how

can it run in the market.

P romotional Strategy

Under the market strategy promotional idea is very important.O

rganizationprovides some schemes or rebates to retailers or consumers. They make

advertisement according to convenient of the people and the feature of the

product.

So on the basis of marketing strategy a organization runs in the market. It is

several types of which makes helpful to increase sales and turnover of the

organization.

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COM P ETITORS

Generally all organizations have competitors in the market. A particular

organization always comprises with other same business and according to

market share we clarify the brand of product is giving more challenge to my

product.

I found many products which can be compared with Britannia Biscuit. As a

conclusion I found that particularly in my provided area Britannia is really doing

well and its performance is on surprising level. During the field work and after

intensive study it was found that main competitor of P RIYAGOLD biscuits is

BRITANNIA as the market leader.

In my provided area the share of the market is as follows.

BRITANNIA 48%

PRIYAG O LD 20%

PARLE-G 16%

PURE F OO D 8%

O THERS 8%

When we compared with other businesses then we follow the quality, price,

distribution system, promotional strategy etc. of the competitors Britannia in this

area is doing well.

So this is the comparison with other biscuits brands. According to our findings we

found that BRITANNIA is the market leader followed by BRITANNIA biscuits.

These two biscuits companies the lion's share in the 2,200 crore biscuits

industry.

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SWOT

ANALYSI

S O F

BRITANN

IA

Strength

y Fulfill one of our Basic

Requirement among Air , Water ,

Food, Shelter

y Widely accepted in all Generations

y Easily available in various formsy Provide good Instant Remedy for

hunger in the form of readymade

foody Preserves the non seasonal food

and makes it available all

throughout the year

Weakness

y Decreases nutritional valuey Increases the cost of food product

y Industry and technology requires

high investmenty Regular usage of processed food

can cause alteration in health

Opportunities

y Increase economy of Indiay Generate employment opportunityy Good quality of Goodsy

Provide competition to foreigncompanies

y Improve living standard

y Provide goods to nation at cheaper

ratey Inflow of foreign reserve and funds

for the govt.(taxes)

Threats

y Many companies are result

oriented

y Increase in pollution

y Sometimes provide poor quality of

product for more profity Lack of technology

y Unable to utilize all the resources

efficiently

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Webliography:

htt p:// www .britannia .co .in/c omp an yove rview_ov e rview .ht ml

htt p://e n .wikiped ia .or g/ wiki/Britannia_ Industri es

htt p:// www .thu mp. in/c at eg or y/ bran d/ britannia