Case Study on Britania

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CASE STUDY|
BRITANIA|
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Makeover of Britannia

"Our markets are poised for exciting times. As a successful organisation, we must not only keep pace with consumer expectation, but also anticipate them. Our new identity is to lay the base to project our future as a successful 'food' company, a company that provides high quality and tasty, yet healthy foods and beverages"- Nusli Wadia, Chairman, Britannia Industries Limited.

"I conform to the view that there are three kinds of companies - those that watch things happen; those that make things happen; and those that wonder what happened. We certainly wish to make things happen.....My personal commandment is Do unto others what you don't wish Done unto you. It's not the big who swallow the small, it is the fast who swallow the slow"

- Sunil Alagh, CEO, Britannia Industries Limited.

Makeover of Britannia: A Path Less Travelled

An old maxim goes, 'Why does something when it ain't broke?' This may be the credo of most firms, but not of the food major, Britannia Industries Limited (BIL). In 1997, BIL, whose business seemed to be doing well, instead of concentrating on it, virtually charted a new course by seeking to reinvent itself. It built a new corporate identity and adopted a colourful and identifiable logo with a new base line - 'Eat Healthy, Think better.' From being a manufacturer of baked products, BIL kicked off a diversification exercise to become a comprehensive foods and beverages company making cheese and other dairy products, in addition to its bakery products. BIL seemed to be doing something radical by venturing into totally new areas, while this puzzled many, some analysts felt that it was BIL was doing this out of compulsion. They reasoned that the 16% growth rate of BIL sales, which was just 8% in real terms when corrected for inflation, though good by the standards of a mature market, was not good enough for a growing market like India, specially in the foods segment. Others felt that BIL's makeover decision may have been influenced by the threat of potential competition. They also felt that with the organised biscuit market in India being commoditised, and the major chunk being controlled by the unbranded segment, reliance on biscuits alone could be detrimental to its long-term interests. However, some analysts were of the opinion that the diversification of BIL into relatively new areas was risky, and that it should have concentrated on its core competence, the biscuit business. By the end of 2000 the exploits of BIL seemed to have fructified, at least in the short-run. In a survey conducted by A&M, BIL emerged as the number one food company well ahead of competitive brands like Nestle and Cadbury. BIL's dairy business seemed to be doing reasonably well. In the cheese segment it stood second with about 35% market share. In the bakery segment also it was doing well, with its biscuits business making significant inroads. Its positioning plank, 'Eat Healthy, Think Better' also seemed to have struck the right chord with its customers. Said Sunil Alagh (Alagh) "Our brand today represents family trust, quality with a contemporary, youthful image."

'Food for Thought'

BIL, since its inception had been mainly involved in the manufacture of biscuits, which contributed around 85% of its revenues (1997). The biggest problem then, for the 80-year-old BIL was that its name was strongly associated by customers with biscuits (or more broadly bakery products). With the de-reservation of biscuits from the small sector and commoditisation of the Rs 3500 crore biscuit market, coupled with cutthroat competition after the entry of multinationals and stagnating net...
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