SWOT ANALYSIS

Britannia Industries Limited (Britannia or 'the company') is a bakery and dairy product manufacturer
and distributor. The company's principal strengths are improved liquidity, a focus on quality, and
profitability, while its reliance on single geography remains a source of concern. The company's
growth prospects are projected to be enhanced by the growing worldwide bread market, savory
snack market, and relationship with Dunzo. However, the company's operations may be harmed by
tough competition, counterfeit goods, and strict laws.

Strengths Weakness

Focus on quality Dependence on a single geography

Liquidity position
Profitability
Opportunities Threats

Partnership with Dunzo Competitive environment

Growing global bakery market Stringent regulations
Savory snacks market Counterfeit products

Strength

Focus on quality
Britannia puts a premium on maintaining high-quality standards throughout its operations, as quality
becomes increasingly important in keeping consumers. It follows strict quality management
principles to ensure that its clients receive high-quality services. Compliance with the highest quality
improves the company's brand image and increases client confidence in its services. The company's
quality and environment department is constantly working to standardize management systems,
add criteria and behavior models, and put these standards into practice to achieve process
integration. The company biscuits, cake, and rusk manufacturing units are ISO 22000 certified; the
company’s consumer care cell is certified with ISO 10002:2018 and few factories are AIB certified.

Liquidity position
Britannia has an edge since it has more liquidity, which allows it to take advantage of market
possibilities. The company's current ratio was 1.4 at the end of FY2020. The current ratio of the
company was higher than that of its competitors Hindustan Unilever Limited (1.3) and Mondelez
International (1.3). (0.5). This was owing to an increase in total current assets from INR35,263.4
million in FY2019 to INR36,749.7 million in FY2018, a 4.2 percent increase over the previous year.

Profitability
During the year, the company's profitability increased. The company's operating income in FY2020
was INR15,715.4 million, down from INR16,413.6 million in FY2019. Improving operating
performance demonstrates the company's capacity to effectively manage costs. The company's
focus on profitability is also reflected in its strong operating results. In FY2020, the company's net
income increased from INR11,591.2 in FY2019 to INR14,026.3. Improving profitability allows the
company to deliver higher returns to its owners, which helps investors gain trust in the company.

Weakness

Dependence on a single geography

The corporation is concerned about geographic concentration. Even though the company operates
both in and outside of India, it is the India division that earns most of its revenue. Dependence on
India could have an impact on the company's operational and financial performance, as well as
increase its business risks, by exposing it to the country's economic and geopolitical risks, which
could affect demand for its products, disrupt the supply chain, and limit the company's future
market share and growth opportunities. This also obstructs the company's intentions for
international expansion. The India segment accounts for 95.5% of the company’s revenue in FY2020,
while another segment contributes 5.5%.

Opportunity

Partnership with Dunzo

Strategic efforts could assist the organization to improve its operational capabilities while also
expanding its geographic reach. The company teamed with Dunzo, an online delivery platform, in
April 2020 to deliver all its products to customers' homes. This aids the corporation in maintaining an
unbroken supply of essentials during the country's closure due to the Covid-19 outbreak. The
organization will be able to take advantage of the increased demand for home delivery because of
this partnership.

Growing global bakery market

Britannia manufactures and distributes bakery items such as biscuits, bread, cakes, and rusks, and
the market is being influenced by increased awareness of the health benefits of bakery products.
Hectic lifestyles, rising demand for sugar-free bakery items, and preferences for organic and
organically baked goods, as well as a growing economy, urbanization, changing eating habits, and a
young population, are all contributing to market expansion. The global bakery and cereal industry is
expected to rise to US$599,451.2 million by 2022, according to an in-house research report. Bakery
items are predicted to be consumed in the amount of 142,528 million kgs by the end of 2022.

Savory snacks market

The brand continues to benefit from the worldwide savory snack market's expansion. The rapid
growth of population, higher per capita consumption, urbanization, a growing middle class,
improved technological standards, and an increase in the number of snacking occasions all
contribute to the global expansion of the savory snack market.

Threat

Competitive environment
In the industry, the company faces fierce competition based on goods quality, innovation, service,
brand awareness, loyalty, and price. National, regional, and local businesses compete with the
company. Danone SA, ITC Ltd, Hindustan Unilever Ltd, Kellogg Co, Nestle India Ltd, Parle Products
Pvt Ltd, and Mondelez International, Inc. are among its significant competitors. Some of the
company's competitors have more financial, marketing, and other resources, allowing them to
engage in more aggressive marketing and expansion operations.

Stringent regulations
As a food producer and marketer, the corporation is subject to a variety of government restrictions
regarding production procedures, product quality, packaging, labeling, storage, and distribution. The
Prevention of Food Adulteration Act, 1954; The Fruit Products Order, 1955; The Meat Food Products
Order, 1973; The Vegetable Oil Products (Control) Order, 1947; The Edible Oils Packaging
(Regulation) Order, 1998; The Milk and Milk Products Order, 1992; and The Essential Commodities
Act, 1955 are all included in the Food Safety and Standards Act, 2006. The Ministry of Agriculture's
Department of Animal Husbandry, Dairy, and Fisheries oversee ensuring that the Food Safety and
Standards Act of 2006 is followed. In India, the company makes and sells a variety of milk and milk
products. The act established some regulatory criteria for milk and milk products in areas such as
quality control, packing, certification, marking, and labeling. Every company must get a certificate of
registration to operate in the country, according to the Milk and Milk Products Order, 1992. The
corporation must spend a large amount of money to comply with the requirements, and any non-
compliance could result in fines and other penalties that could harm the company's reputation.

Counterfeit products
The counterfeit goods that are flooding the market may hurt the company's sales and profit margins.
Customers may purchase counterfeit products with fraudulent labels that contain low-quality
products, eroding consumer confidence and tarnishing the genuine company's brand image.
Counterfeiting and piracy are anticipated to cost G20 countries about US$125 billion per year,
according to the International Chamber of Commerce (ICC). The duplicated goods harm the
company's financial performance and brand image because of their low pricing.
PESTLE ANALYSIS
Britannia's PESTLE Analysis examines the brand's business strategies. Britannia's PESTLE Analysis
looks at how political, economic, social, and technical (PEST) aspects, as well as legal and
environmental factors, affect the company's operations. The PESTLE Analysis identifies the various
extrinsic circumstances that have an impact on the brand's business. PESTLE analysis is a framework
that is essential for firms like Britannia since it helps them analyze market trends and continuously
improve their business. PESTEL analysis is another name for PESTLE analysis.

Political Factors
Britannia is a large FMCG company with a diverse product portfolio. A variety of political factors
influence the FMCG industry as a whole. Raw materials, manufacturing, and selling of Britannia's
products necessitate appropriate government policies, such as GST regulations, as well as associated
government incentives. Foreign equity investment of up to 100 percent in single-brand retail and 51
percent in multi-brand retail has been approved. Even the union government's production-linked
incentive scheme can provide a significant boost to the export of its products on the global market.

Economic Factors
A variety of economic factors influence consumer purchasing power and overall profitability for
Britannia. During the pandemic lockdown, individuals typically favored well-packaged, trustworthy
consumer goods such as Britannia. Even now, when the situation improves, people prefer and trust
brands for everyday consumer products such as biscuits. Consumer decisions are influenced by the
overall economic conditions, which include the employment rate, wages, inflation, and pricing.
People currently seek out trusted brand names, keeping hygiene and confidence in mind. They
usually keep stock for themselves and buy in bulk at a discounted price. With falling inflation and
unemployment, it enjoys a strong market position, with increased consumer demand for its
products.

Social Factors
Age, gender, family size and structure, region, education level, and population density are some of
the socioeconomic elements that influence consumers' lifestyles and demand for consumer goods
from companies like Britannia. People prefer to acquire more packed items when they migrate into
urban areas and cities. Children typically can persuade their parents to purchase items such as
cookies and cakes. Consumers' preferences and purchasing decisions are influenced by society.
People nowadays demand safe and hygienic foods as pandemics spread. All of these factors make it
appealing to a wide range of market consumers. If the proper STP is implemented, it can be
beneficial for the company.
Technological Factors
In the modern world, digital technologies such as AI, cognitive intelligence, and handy smartphones,
are emerging and FMCG firms such as Britannia are well-positioned. Online ordering and selling of
consumer items are catching up as E-commerce websites and applications draw a large number of
new and existing customers. With a diverse and expanding product portfolio that includes Biscuits,
Bread, Cake, Rusk, Dairy, and so on, it has a competitive edge on E-commerce platforms. Whether in
the supply chain, sales, or customer service, technological considerations are critical. As E-commerce
websites and applications gather a big number of new and existing clients, online ordering and
selling of consumer items are catching up. It has a competitive advantage in selling through product
bundling on E-commerce platforms because of its extensive and developing product portfolio, which
includes Biscuits, Bread, Cake, Rusk, Dairy, and so on. Whether in supply chain management, sales,
or customer support, technological considerations are crucial.

Legal Factors
It can be influenced by a variety of legislative variables in any country where it has a corporate
presence. Some factors, such as the length of time required for judicial procedures and the delay in
enforcing rules promptly, might influence the firm. Even a country's laws governing monopolies and
restrictive trade practices are significant factors that can be both an opportunity and a threat in
different ways. Britannia may be affected by consumer protection laws as well as intellectual
property rights protection. Consumer petitions and a variety of other government challenges can
have an impact on FMCG companies. Britannia's functional level strategies must be legally bound for
the company to continue to grow.

Environmental Factors
Companies are routinely scrutinized by environmental bodies such as the NGT for anti-
environmental activities and practices that cause environmental disruption. Customer activism is
also having an impact on corporate operations and products. Plastic packaging for products is also
prohibited in numerous nations. This occasionally results in excessive costs and, as a result, has an
impact on the company's sales and revenues. There are numerous ethical difficulties in marketing
efforts that might have an impact on the business environment. As public awareness of waste
management grows, Britannia is obligated to use environmentally acceptable procedures in all of its
operational nations. These environmental problems are unavoidable for the corporation to consider
nowadays, as individuals and competitors alike have become more environmentally sensitive.

Conclusion
To summarise, the preceding Britannia PESTLE Analysis reveals the different factors that influence its
business performance. This understanding aids in determining the importance of external business
aspects for any brand.