Lina D’souza 18PGDMBFS25

Manikanta Ranjan 18PGDM026

Rohit Joshi 18PGDM

BUSINESS
MODELING

30/08/2019
 Table of contents

Contents
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Table of contents ..................................................................................................................................................1
BUSINESS MODEL COMPARISION OF MONDELEZ AND HALDIRAM (SNACK INDUSTRY) ......................................2
GLOBAL MARKET ...............................................................................................................................................2
INDIAN SNACKS INDUSTRY................................................................................................................................3
BUSINESS MODEL CANVAS – MONDELEZ .............................................................................................................4
Key Partners: .....................................................................................................................................................5
Value proposition: .............................................................................................................................................5
Customer Relationships: ...................................................................................................................................5
Customer Segment: ..........................................................................................................................................5
Key Resources: ..................................................................................................................................................6
Channels: ...........................................................................................................................................................6
Cost structure:...................................................................................................................................................6
Revenue Stream: ...............................................................................................................................................6
BUSINESS MODEL CANVAS – HALDIRAM ..............................................................................................................7
KEY PARTNERS:..................................................................................................................................................8
KEY ACTIVITIES: .................................................................................................................................................8
VALUE PROPOSTION: ........................................................................................................................................8
CUSTOMER RELATIONSHIPS: ............................................................................................................................8
CUSTOMER SEGMENTS: ....................................................................................................................................8
KEY RESOURCES: ...............................................................................................................................................9
CHANNELS: ........................................................................................................................................................9
COST STRUCTURE: .............................................................................................................................................9
REVENUE STREAMS: ..........................................................................................................................................9
PULSE OF THE BUSINESS .................................................................................................................................... 10
PROFIT MODEL ................................................................................................................................................... 11
FOR MONDELEZ ............................................................................................................................................. 11
FOR HALDIRAM .............................................................................................................................................. 11
BUSINESS MODEL INNOVATION: ....................................................................................................................... 12
 BUSINESS MODEL COMPARISION OF MONDELEZ AND HALDIRAM
(SNACK INDUSTRY)

GLOBAL MARKET
In the last few decades, your taste buds, your brain, your hormones, and your kitchen has been
hijacked by the food industry. The improving consumer lifestyle, rapid urbanization, high disposable
income, are increasing demand for on the go convenience foods, thereby fuelling the ready-to-eat
food market growth. The global market for snack food is expected to reach USD 762 billion by 2024,
growing at a CAGR of 5.34%, during the forecast period, 2019-2024. Snack food has emerged as an
alternative to full-fledged meals with the paradigm shift in consumer behaviour patterns.
Globally, the number of independent working women, double-income families and nuclear families
are increasing. This demographic change increases the demand for convenience food by many folds.
Snack food products are largely consumed in the developed regions due to high commercialization
and urbanization. The market is expected to growth with a high CAGR in developing countries across
the globe. Europe represents the largest market for snack food products, followed by North America.
INDIAN SNACKS INDUSTRY
The Indian food service sector has seen exceptional growth during the past decade and continues to
expand at a fast pace. This can be attributed to a high percentage of young and working population
with rising disposable incomes.
After 1995, India has seen a massive change in Snack food market. The meaning of snack has been
redefined from chips and cookies to beverages, mini-meals and even three items on the plate. There
is a rise in demand of snacks market which drives manufactures to grow and operate in this segment
lucratively. The food industry has expanded at the rate of 15.6% over the last few years. The
consistent growth rate presently outlooks for driving growth in future too.

The consumers are looking forward for healthier and flavourful options in the food market. There is
an increase in the consumer interest towards snacks as there are various brands in this segment with
newer technology and more benefits giving them refreshing and quick meals.

The fast-expanding retail network and the convenience and ease of acquiring it, contributes towards
the rapid growth of the industry. In addition, there are no such regulations and Government policies
regarding the establishment of such companies in India which motivates the manufacturers to set up
its unit. India snacks market is dived between organized players and unorganized market. At present
Unorganized market is dominating the India snacks market. But this scenario is expected to change
during the forecast period of 2018-2024. There is a large number of players working in the Indian
snacks market. Their presence is limited within a town, city or a particular area. They do not think too
much for expansion. As a result, their main focus to develop snacks items according to the consumers
taste in a particular area. This helps them to be popular in that region.

We are going to compare Mondelez (MNC) with an Indian family business Haldiram in the snack’s
food category.
 BUSINESS MODEL CANVAS – MONDELEZ
Business Model Canvas of Mondelez International
Key Partners Key Activities Value Proposition Customer Relationships Customer Segments
Investors Supply chain management To build the best snacking company in the world Quality Massive Markets with speacial focus on kids
Multi billion dollar partnership Production Quality Customer Service
with Jadega Foods Inc. which Food Processing Leading brands Price
also controls a majority of dart Quality Assurance Flavour & taste Presence
insdustries Distribution Brand Awarness
Acquisitions Operations Convenience
FDA & similar Branding Tradition
Providers of raw materials Marketing
Advertising agencies & Media
Distribution Network Key Resourses Channels
Mondelez's portfolio includes About 1,07,000 people around the Retailers
several billion dollar brands world Kiosks
Annual revenue of about $130 billion Supermarkets & distributors
Operates in approx. 165 countries Website
Distribution network Salesforce
logistic resources Social Media
Facilities
Stores
Brand Awarness

They have he scale and resources of a

global powerhouse but also the speed
and agility of a fresh new start-up
Cost structure Revenue Streams
Investing in Bric Market Licensing
Raw material costs Sale of goods:
Packages Baby Food
Advertising Coffee
Distribution & Logistics Dairy Products
Employees Breakfast Cereals
Operations Confectionery
Taxes Bottled Water
Ice cream
Pet foods
Key Partners:
Mondelez has a varied set of key partners for its organization. There are usually three reasons for
creating a partnership:
o Economies of scale
o Reduction of risk and uncertainty
o Acquisition of resources or activities

Given the key partners of mondelez, it achieves all the above-mentioned reasons. The investors and
multi dollar partnerships are a source to attain economies of scale, while the other brands under
the label are a source of reduction of risk and uncertainty, whereas providers of raw materials and
rest of the acquisitions are a source for acquisition of resources or activities.
Key Activities:

Key Activities can typically be broken down into three broad categories:

o Production
o Problem Solving
o Platform/Network

Mondelez consists supply chain management, production, food processing, quality assurance,
distribution, operations, branding, advertising as its key activities.
To achieve the value proposition, i.e., to be the best snacking company in the world mondelez
works tirelessly on its supply chain management and distribution network. Since it involves
production as the main activity it tags along other activities like food processing, branding and
advertising.

Value proposition:
The value proposition describes the value that you deliver to each customer segment. The Value
Proposition answers the question, “why will customers buy from us?”.

Mondelez answers this question through various segmentation products, it has many multi million
dollars sub brands which have a unique value proposition of its own. But on a broad scope, it serves
the snacking needs of the masses.

Customer Relationships:
The Customer Relationships building block answers the question of how you get, keep, and grow
customers. Mondelez through its traditional approach provides customer service to its customers.
The brand awareness of mondelez makes it a necessity to provide just and quick customer service.

Customer Segment:
One really important point to get across here is that customers don’t exist for you, but rather you
exist to serve your customers. Mondelez is a snacking company making the target segment
universal. It serves to all ages and genders making the scope as wide as its possible, but their special
focus is on kids.

Key Resources:
Broadly speaking resources can fall into one of four categories

o Physical
o Intellectual
o Human
o Financial

About 1,07,000 people around the world, annual revenue of about $130 billion, operates in approx.
165 countries, strong distribution network and logistic resources, they have the scale and resources
of a global powerhouse but also the speed and agility of a fresh new start-up.

Channels:
Channels refer to how your products or services are sold to customers. Broadly speaking you can
either have your own channels or partner with someone else. Partner channels could include a
multitude of options, from using a wholesaler to working with affiliates to sell your products or even
using Google Adsense. Mondelez uses a lot of channels to reach to the customers, few channels are
through retail, kiosks, supermarket & distribution, online sales.

Cost structure:
It should be straightforward to determine most important and most expensive costs. Mondelez
incurs the basic costs like any manufacturing company namely the raw material costs, packaging,
advertising, distribution & logistics. This is not limited to these costs, mondelez also invests money
in BRIC market as a hedging activity

Revenue Stream:
Mondelez generates money through various streams namely licensing, sale of goods such as baby
products, coffee, dairy products, breakfast cereals, confectionery, bottled water, ice cream, pet
foods.
 BUSINESS MODEL CANVAS – HALDIRAM

Key Partners Key Activities Value Proposition Customer Relationships Customer Segments
Supply chain management
Production Quality
To build the best snacking company in Has a wide array of products ranging
FDA & other authorities Operations Customer Service
the world from sweets to nameeks to cater to all
Providers of raw materials Branding Price Presence
Quality segments of the market right from
Advertising agencies & Media Marketing Brand Awarness
Leading brands children to elderly people. (Age group
Distribution Network Sales & Distribution Convenience
Flavour & taste 10-65+)
Food Processing Tradition
Quality Assurance
Channels
Retailers
Kiosks
Key Resourses Supermarkets & distributors
About 1200 employees Website
Annual revenue of about $800 million Salesforce
Operates in approx. 80 countries Social Media
Distribution network
logistic resources
Facilities
Stores
Brand Awarness
They have the scale and resources to
become a global player with current
distribution network across 80 countries
Revenue Streams
Licensing
Cost structure Sale of goods:
Raw material costs Namkeens
Packages Sweets
Advertising Exotic Chocolates
Distribution & Logistics Savouries
Employees Dry Fruits
Operations Biscuits
Taxes Ready to Eat packets
KEY PARTNERS:
Haldiram’s one of the major partners which give them a competitive advantage is their distribution
network which has helped them reach out to every nook and corner of the country, along with helping
them cater to international customers as well
They also rely heavily on the local sourcing of raw materials, especially for the savouries which are
made from ground moth lentils which grow in abundance in the Bikaner region of Rajasthan, but very
low elsewhere in the world
They still rely very heavily on traditional marketing, focusing more on channel management as a key
to make sure their products are on the shelves

KEY ACTIVITIES:
Their primary activity is production and distribution of the variety of products in their portfolio, which
they have purposely kept inhouse, as they understand the cyclical and non-cyclical demand patterns
and have the ability to adapt accordingly
This primary focus on production has led them to naturally focus on allied activities like supply chain
management, food processing and quality assurance
This is due to the fact of their vast product assortment of more than 500 in their portfolio

VALUE PROPOSTION:
Their key value proposition is to provide snacking options to all customer segments across various
product categories which has seen them diversify into sweets, namkeens, exotic chocolates and dry
fruits etc. which have then become healthy revenue streams

CUSTOMER RELATIONSHIPS:
Customer relationships for Haldiram’s are mainly driven by the quality of the products, as they are
low-medium involvement products
Brand Awareness plays a major role in maintaining the customer relationships as the brand recall is
one of the most important factors while choosing off the shelf products
This is reflective of their position of being the No.1 snack company in India, beating the likes of
PepsiCo, and also being 55th on the most trusted brand list in India
Their brand strength in terms of customer relationships is also reflective of the fact that their less
denomination products are used as currency replacements

CUSTOMER SEGMENTS:
They have more than 500 products catering to mostly all age groups (Age group: 10-65+), with
product positioning in sweets, namkeens etc
KEY RESOURCES:
Sales & Distribution is one of the important in resources for them, which gives them the competitive
advantage and the scale to reach out to their audiences present across more than 80 countries
generating about $800 Mn. in revenue
They have around 1200 employees across their distribution, logistics and store networks including
their restaurant business
Product Innovation is their mainstay as it also gives them the competitive advantage in understanding
the customer preferences

CHANNELS:
The major channels for distribution are the retailers, distributors, modern trade outlets and
supermarkets as in the case of most of the FMCG products
They also do have offers on their website, but their focus is still majorly on the offline route to the
market which they have mastered to even reach the last mile connectivity in the remotest of locations

COST STRUCTURE:
Their major costs come from the distribution and logistics which is an inherent cost in most of the
FMCG category
This is followed by the costs of raw materials, packaging, employees, operations etc.
This industry also suffers from the issue of expired products in terms of perishable items which also
add to the costs, as there is significant opportunity loss in this case

REVENUE STREAMS:
Due to their diverse product portfolio, Haldiram’s has multiple revenue streams, which are primarily
divided into three business lines – Savouries, Sweets and the restaurant business
These three lines are inclusive of the sales of goods viz. namkeens, sweets, exotic chocolates,
savouries, dry fruits, biscuits and ready to eat packets
Licensing also acts as another revenue stream for them
PULSE OF THE BUSINESS
In an age of start-up companies, fast-paced technology advancements, and companies testing out
business models new to the game, finding the appropriate sales package has become an evolutionary
role within an organization. While customer attrition has been taught to mean weak business models,
some companies that follow this model are still making money. How? They are closing a truck load of
deals, at incredibly low rates. Other start-ups make much smaller quantities of deals with higher costs
and pay closer attention to customer satisfaction in order to preserve a high margin.

Jeff Bezos in his wired interviews says, “There are two ways to build a successful company. One is to
work very, very hard to convince customers to pay high margins. The other is to work very, very hard
to be able to afford to offer customers low margins." He has chosen low margins. There multiple
revenue models based on which the pulse of the business is defined. Here we will discuss about Thick
pulse and Thin pulse businesses.

• Thin Pulse businesses are those where the ticket

Thin Pulse ticket/ margin per transcation is low and the volume
of transaction is high

• Thik Pulse businesses are those where the ticket

Thick Pulse ticket/ margin per transcation is very high and the
volume of transaction is low

Thin Pulse businesses are a great way to attract cost-conscious customers because you’re able to
offer them a low price, and you aren’t concerned with running through your customer pool.
One interesting fact about these types of businesses is that it is the most common form in our
consumer-based society. By the way, the number one company in the world uses this business model
is Wal-Mart.

Large retailers like Haldiram that sell mass quantities of items, regardless of quality, may take
advantage of low profit margins because they are able to offer additional attributes to customers that
keep loyalty and membership high. Large retailers also have a larger pool of consumers. In order to
sustain a low profit margin, you need to have high product turnover.
Thick pulse businesses make fewer sales/transactions than a thin pulse business because the cost of
their product is not marked down. The key with high profit margin companies lies in the product itself.
An extreme example of this type of business is a shipyard. The following are examples of thick pulse
businesses:
• Aircraft manufacturing – Boeing
• Heavy Equipment manufacturing – Caterpillar, Komatsu, Hitachi & Volvo
• Military Equipment manufacturing
• Large Industrial/Commercial Contractors – Bechtel, Fluor & Kiewit
• Heavy Transportation – shipping lines, railways
Notice that in this model, although it is a low volume company, low volume is reflected only in the
physical quantity, not the rupee value.

PROFIT MODEL

FOR MONDELEZ
BRAND PROFIT - The brand profit model works when a company
derives profit from their brand equity and the value the market
places in their name. This model works
when a company invests large capital into
marketing and advertising efforts, in order
to build a high brand perception. By
spending the time building the brand name they able to charge
larger rates on their products because consumers are willing to pay
a much larger rate just for their brand. This model is appropriate in
a market that values style, luxury, and mainstream names. This
works best with a company in the retail sector that is constantly
rolling out new products into the market. This also works best in a competitive industry where the
perception of the public is everything.

FOR HALDIRAM
LOCAL LEADERSHIP PROFIT - The local leadership profit model
consists of a company that expands smartly; focusing locally and
gradually branching outwards slowly growing
their network. In order to work the company
must employ a persistent and consistent
expansion strategy, sticking with their model
as they gradually expand. Once established in a region, building a
strong customer loyalty and relationships with suppliers, they will
move to the next region. This gives them a huge advantage in
buying power, lowers recruiting and marketing costs because their
stores become so well known in a region, these factors allow for a
very large price advantage compared to competitors.
BUSINESS MODEL INNOVATION:
• From understanding the product offerings and product placements, we see that Haldiram’s is
enabling growth strategies by applying the Industry Model (IM) and the Revenue Model (RM)
innovation

• In terms of the Industry Model (IM) innovation, they are moving into newer industries – seen
by their entry into the exotic chocolates space, redefining existing industries – introduction of
newer product variants, and also creating entirely new value chains – seen by their entry in
the sweets (gifting option) space

• In terms of the Revenue Model (RM) innovation, they are applying the Product to service
model as part of their restaurant strategy, thereby adding additional revenue streams for
themselves
Thank you