Britannia bakes fresh strategy to fight regional players

Britannia bakes fresh strategy to fight regional players

Author | Source: Business Standard | Saturday, Feb 25,2006 8:29 AM

Britannia bakes fresh strategy to fight regional players

The Rs 1,600 crore FMCG major Britannia is making every effort to stave off the stiff competition from strong regional players in the biscuits market. The company is tightening its operational effectives, creating a focus and bringing in improved efficiency into its operations.

Driving all these is Vinita Bali, CEO, Britannia. A year after taking charge of the firm, Bali in an interview to Business Standard said: “There are a whole plethora of small and local players. They may be small on an all India basis, but pretty significant in the local context. When we take the dynamic biscuit industry in perspective, local competition is large and they constitute quite a large scale when put together.”

While most of the players saw a decline in their marketshare, Brittania has not only held on to its share since last April but in the period to December 2005 gained by 1 per cent.

“We were losing share, but now we are witnessing acceleration in growth. There is no magic wand for this. We are making the entire system efficient in having to wake up every morning and execute flawlessly. This is important and critical,” Bali detailed.

Britannia is adopting the ‘segmenting the opportunity’ strategy and is not doing a uniform marketing activity across the country.

High leverage in specific markets, creating a plan to focus on the specific opportunity and the ability to profitably commercialise those opportunities is the gameplan.

“The biscuits industry allows low price realisation. We took a comprehensive view of our supply chain and despite increase in fuel, sugar and wheat prices our operational ratios have improved without a price increase across our product range in the recent past. This is due to productivity enhancement and how well the price package and channel mix is maintained,” noted Bali.

The company, which is expected to touch a topline of Rs 1,750 crore for the current fiscal is also “re-energising and restaging its brands”. The six power brands — Tiger, Marie, GoodDay, 50:50, Treat and Milk Bikis — are all Rs 100 crore plus brands and each of them is being constantly innovated upon.

“You can really expect on an average a new variant every other month,” Bali noted.

Speaking on the intense competition from the likes of ITC Foods and Parle, Bali said: “Competition in any market segment is good and the entire market expands.

In fact, competition helps us become smarter in how we want to do things and how we leverage our resources.”

She further added that the industry is highly elastic and anybody can go and buy market share.

“They can dominate the media and spend resources. The success of a business, however, lies in whether you are building a brand, whether you are really building up a credible portfolio to sustain growth. We are here to generate profitable growth and not growth at any cost,” she stressed.

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