SWOT Analysis Of Parle-G

By: Siddharth Singh Tyagi Roll no. A-57 BBA(M&S-II)

Semester-III

PROFILE
Parle-G World's Largest Selling Biscuit
A long time ago, when the British ruled India, a small factory was set up in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely. Despite the odds and unequal competition, this company called Parle Products, survived and succeeded, by adhering to high quality and improvising from time to time. A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having already established a reputation for quality, the Parle brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which later went on to become leading names for great taste and quality. It was called Parle Gluco Biscuits mainly to cue that it was a glucose biscuit. It was manufactured at the Mumbai factory, Vile Parle and sold in units of half and quarter pound packs. Parle-G has been a strong household name across India. The great taste, high nutrition, and the international quality, makes Parle-G a winner. No wonder, it's the undisputed leader in the biscuit category for decades. Parle-G is consumed by people of all ages, from the rich to the poor, living in cities & in villages. While some have it for breakfast, for others it is a complete wholesome meal. For some it's the best accompaniment for chai, while for some it's a way of
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getting charged whenever they are low on energy. Because of this, Parle-G is the world's largest selling brand of biscuits.

HISTORY
Biscuits were very much a luxury food in India, when Parle began production in 1939. Apart from Glucose and Monaco biscuits, Parle did offer a wide variety of brands. However, during the Second World War, all domestic biscuit production was diverted to assist the Indian soldiers in India and the Far East. Apart from this, the shortage of wheat in those days, made Parle decide to concentrate on the more popular brands, so that people could enjoy the price benefits. The incredible demand led Parle to introduce the brand in special branded packs and in larger festive tin packs. By the year 1949, Parle Gluco biscuits were available not just in Mumbai but also across the state. It was also sold in parts of North India. By the early 50s, over 150 tonnes of biscuits were produced in the Mumbai factory. Looking at the success of Parle-G, a lot of other me-too brands were introduced in the market. And these brands had names that were similar to Parle Gluco Biscuits so that if not by anything else, the consumer would err in picking the brand. This forced Parle to change the name from Parle Gluco Biscuits to Parle-G. Parle-G was the only biscuit brand that was always in short supply. It was heading towards becoming an alltime great brand of biscuit. Parle-G started being
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advertised in the 80's. It was advertised mainly through press ads. The communication spoke about the basic benefits of energy and nutrition. In 1989, Parle-G released its Dadaji commercial, which went on to become one of the most popular commercials for ParleG. The commercial was run for a period of 6 years. Parle-G grew bigger by the minute. Be it the packs sold, the areas covered or the number of consumers. It became a part of the daily lives of many Indians. It wasn't a biscuit any more. It had become an icon. The next level of communication associated the brand with the positive values of life like honesty, sharing and caring. Thankfully today, there's no dearth of ingredients and the demand for more premium brands is on the rise. That's why, we now have a wide range of biscuits and mouthwatering confectionaries to offer.

SWOT ANALYSIS
A SWOT (Strengths, Weaknesses, Opportunites, and Threats) is a tool used to provide a general or detailed snapshot of a company's health. Why use a SWOT Analysis? In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces an objective analysis of a company's position vis a vis its competitors and the marketplace. Simultaneously, an effective SWOT analysis will help determine in which areas a company is succeeding, allowing it to allocate resources in such a way as to maintain any dominant positions it may have.

Positive points of Parle-G:

Strengths & Opportunities
Over the years, Parle has grown to become a multimillion US Dollar company. Many of the Parle products biscuits or confectionaries, are market leaders in their category and have won acclaim at the Monde Selection, since 1971. Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the total confectionary market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and Krackjack and confectionery brands, such as, Melody, Poppins, Mangobite and Kismi, enjoy a strong imagery and appeal amongst consumers.
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Be it a big city or a remote village of India, the Parle name symbolizes quality, health and great taste! And yet, we know that this reputation has been built, by constantly innovating and catering to new tastes. This can be seen by the success of new brands, such as, Hide & Seek, or the single twist wrapping of Mango bite. In this way, by concentrating on consumer tastes and preferences and emphasizing Research & Development, the Parle brand grows from strength to strength.

Negative points of Parle-G:

Weaknesses & Threats
HLL and ITCs entry into biscuits will affect Parle After testing the waters with niche offerings in untapped segments of the biscuit market, heavyweights Hindustan Lever and ITC have now forayed into the mass biscuit market. While ITC has launched its glucose brand, Sunfeast, HLL has decided to differentiate its product, Modern Energy Biscuits, by using wheat and soya as ingredients. Importantly, both ITCs and HLLs new offerings are priced at Rs 4 for a 100 gram pack, the same level as Parle G and Britannias Tiger glucose biscuits. Given HLLs and ITCs massive distribution reach, this new development would clearly have a significant impact on the market shares of both Parle and Britannia. In case the taste of the new products do not go down
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very well with consumers, the already established players may get some breathing space, but it will be only a matter of time before that gets corrected and the pressure will soon be back on. Structurally, the entry of players such as HLL and ITC in the mass biscuit market is bound to affect the dominance of Britannia in the biscuits market. Whats more, competition from regional players such as Surya Foods, known for its Priya Gold range of biscuits, has also increased. It certainly doesnt help that the company has just had a change in leadership. Further, since the company has hived-off its dairy division, overall growth rates would clearly be lower than what investors have been used to for a while. As far as profitability goes, much depends on the companys ability to further reduce costs, unless there is a further reduction in excise rates. Given the increase in competition, taking price hikes may still be some time away. In such a scenario, Britannias long-term growth rate would turn out to be much lower than earlier estimates. Its no wonder then that the stock has underperformed the market and peers in the FMCG sector by a huge margin during the current rally. The stock still gets a discounting of around 14 times FY04 earnings, which, considering that growth rates will drop, gives the feeling that the stocks underperformance will continue. ITC Ltd has posted a 21.8% rise in net profits to Rs 323.51 crore for the October-December 2002 quarter (Q3) compared to the corresponding period of the previous fiscal. Net sales during the quarter was reported at Rs 1,647.60 crore, up 12.2% over the corresponding of the previous period. In the nine months ended December 2002, ITCs net profits were up 16% to Rs 1,047.93 crore.
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ITC said: "The companys corporate strategy aims at creating multiple drivers of growth anchored on its core competencies." Its current focus is nearly exclusively on four business groups: FMCG, hotels, paperboards, paper & packaging and agri-business. ITC

BIBLIOGRAPHY
The information mentioned above was taken from: www.parleproducts.com