Q 1). What are the industry's dominant economic features?
Ans: India is second largest biscuit manufacturer in the World after USA and has a turnover of around 8000 crores. Our product is Parle-G. The main economic features are – * It is a very price sensitive industry. Relatively low pricing products * The Industry is now facing problems from increase in raw material prices. With the Governments introduction of VAT at 12.5%, margins have had pressure. * Access to distribution channels. Most firms have a strong relationship with the major grocery store chains and a new firm in the biscuit industry may have difficulty in finding a place to sell the product Q 2). What kinds of competitive forces are industry members facing? Ans: The BIG 4’s of the biscuit industry in India are Britannia , Parle, PriyaGold & ITC. Besides these, there are around 150 medium to small biscuit factory in India today. 65% of the industry is playing in organized sector and 35% in unorganized sector. The major competitive forces playing are :
* Steep Hike in cost of production, price hike of petrol/diesel * Economies of scale. The most efficient level of production in an industry is at the point in which the average total costs are at a minimum. * Competitive pricing
* High bargaining power of buyer.
* Low bargaining power of supplier.
* Threat of new entrants are low
* Parle –G is a market leader and enjoys strong brand loyalty. So it is tough on the part of competitors to topple the leader and develop the brand equity as is shared by Parle G but threat from competitors is always there as Britannia is not lagging behind much. * The industry is expected to grow at 15% so great competition is there to grab a share of the growth.
Q 3). What factors are driving industry changes and what impacts will they have? Ans: The factors driving industry changes are –
•R& D and continuous product innovation
•Age, lifestyle and...