MANAGERIAL ECONOMICS

MINI PROJECT
By,
Anjum Samira
Mohammed Saqlain Khan
Joysee Jenee Toppo
Sabrina Nalakath
Rohan Bhajanka
 BRITANNIA ( Monopolistic company)

 Britannia is an Indian food-products corporation based in Bangalore, India.

 Started in 1892, in a non descript house in Calcutta, with an initial investment of Rs. 295.
 It sells its Britannia and Tiger brands of biscuit throughout India.
 The company’s principle activity is the manufacture and sale of biscuits, bread, rusk, cakes and
diary products.
 First bakery company in India to remove transfats from its biscuits.
 Britannia innovates for strong presence in health and nutrition space living upto its credo “Eat
healthy and Think better”.
 NIKE (Oligopoly Company)

 Nike is an American multinational corporation, established in Eugene, Oregon in 1964 as Blue

Ribbon Sports.
 It is engaged in designing and worldwide marketing and selling of footwear, apparel,
equipment and accessories.
 It owns Converse, Hurley, Umbro and Jordan brands.
 Nike is the world’s leading supplier of Athletic Shoes and apparel and also a major
manufacturer of sports equipment.
 It also holds substantial popularity in the leisure and casual products.
 OBJECTIVES OF STUDY
Britannia (Monopolistic)
• Help people enjoy life through healthy
snacking.
• Make delicious and enjoyable food.
• Make accessible to all people, anytime,
anywhere and everyday.
• To be the lowest cost producer in the market.
• To become largest volume player in the bakery
industry.
Nike (Oligopoly)
• To make a profit for the shareholders.
• To bring inspiration and innovation to every
athlete in the world.
• Minimize environmental footprint, transform
manufacturing and unleash human potential.
• To improve quality and convenience of
footwear, clothing, through introduction of
new technologies and development.
• To promote products as fashion wear, not just
sports wear.
 MARKET STRUCTURE
Britannia (Monopolistic)
• One seller controlling the production
• Absolute product differentiation
• Freedom of entry and exit in the market
• Imperfect competition
• Economic profits in short run only, normal
profits in the long run
• Lack of perfect knowledge
• Less control over price
Nike (Oligopoly)
•Many sellers in the market
•Similarity of products
•High barriers to entry in the market
•Prefers not to compete through price wars
rather compete in other ways such as
advertising product differentiation and barriers.
•Potential for economic profits in both short
run and long run.
•Well known producers.
•High price setting power.
Monopolistic graph for Britannia Oligopoly graph for Nike
 MARKET SHARE
Britannia (Monopolistic)
• Between 1998 & 2001, the company’s sales
grew at a compound annual rate of 16%
against the market, and operating profits
reached 18%.
• More recently the company has been growing
at 27%, a year, compared to the industry’s
growth rate of 20%.
• At present 90% of Britannia’s annual revenue
of Rs 22 billion comes from biscuits.
• Britannia has an estimated market share of
38%.
Nike (Oligopoly)
• Nike’s shares jumped more than 6% in early
trading, hitting a record of $92.79.
• The stock had last hit an intraday high of $90
on April 18.
• It closed Tuesday, ahead of the earnings report,
at $87.18
• Nike shares have climbed more than 17% this
year, giving the company a market cap of about
$136.6 billion.
 BRITANNIA PRODUCTS

Vita marie Gold

Fruit cake
Britannia toned milk
Bourbon

Tiger glucose Britannia Curd

Whole wheat bread

Good day
Little hearts

Britannia ghee
Britannia 50 50

Pure magic
Britannia butter
Britannia rusk
 NIKE’S PRODUCTS

 Nike produces a wide range of sports equipment such as track running shoes, jerseys,
shorts, cleats, baselayers etc. for a wide range of sports including track and field, baseball,
icehockey, tennis, basketball and cricket etc.
 PRODUCTION PROCESS

Britannia (Monopolistic) Nike (Oligopoly)

Making dough by mixing the ingredients Cutting of leather & rubber parts

Sewing the cut parts on the sole of the shoe

Fermentation

Preparing the sole through stock fitting

Giving the shape
Preparation attachment of shoe uppers to the sole (by means of
lasting)
Baking the Raw biscuits
The shoe heel is sharped into the final form

Testing
Finishing

Packaging & supply

Attaching of accessories (like company ribbons)
 REVENUE
Britannia (Monopolistic)
• Biscuit maker Britannia industries Ltd on
Wednesday reported a 11.82% jump in profit for the
year at 294.27 crore for the quarter ended March 31.
• Total income for the fourth quarter stood at 2860.75
crore up 10.8% from the same quarter in the
corresponding year.
• For the full year the company reported consolidated
revenue of Rs 11,261.12 crore while net profit stood
at Rs 1,155.46 crore.
Nike (Oligopoly)
• NIKE revenue for the quarter ending Aug 31, 2019
was $10.660B ,a 7.16% increase year-over-year
• NIKE revenue for the 12 months ending August
31,2019 was $39.829B, a 6.85% increase year-
over-year.
• NIKE annual revenue for 2019 was $39.117B, a
7% increase from 2018.
 PRICING STRATEGY
Britannia (Monopolistic)
• Competition pricing: Britannia set a price which is
reasonable when compared with competitors.
• Product line pricing: Pricing the different products within
the same product line @ different price points.
• Bundle pricing: Bundles a group of products at a reduced
price when providing the family packs.
• Value-based pricing: Provide in the good quality product &
good service for the good price.
• Mainly focuses on the middle class & lower middle class
families. Therefore, the britannia products will range from
Rs5 to Rs 40 only.
• The pricing strategy along with the distribution has been so
strong, that people buy these products even on railway
stations while travelling, instead of buying local snacks.
Nike (Oligopoly)
• Value-based pricing strategy: By using this strategy,
Nike considers consumer perception about the value of
its customers.
• This value is used to determine the maximum prices
that consumers are willing to pay for the company’s
sports, shoes, apparel & equipment.
• Premium pricing strategy: It involves high prices,
based on a premium branding strategy that establishes
Nike products as higher in quality & value than
competing products.
• Therefore, Nike successfully uses its pricing strategies
to maximize its profits while emphasizing high value in
profiting its products and brand.
 MARKETING STRATEGIES
Britannia (Monopolistic)
• A strong quality of the product & customer
satisfaction.
• A growing relationship with customer &
customer retention.
• Focus on competitors activity.
• A growing emphasis on global thinking and
local marketing planning.
• Promotional strategies such as making
advertisement according to the convenience
of the people and the features of the
product.
Nike (Oligopoly)
• Product design & quality innovation.
• Use IT and social media for customer
connection & engagement.
• Focus on inspiring customers & athletes.
• Sustaining competitive advantage based on
costs i.e; the company minimizes the
production costs to maximize profitability
or reduce selling prices.
 DEMAND FACTORS
Britannia (Monopolistic)
• Income level: Income of the customer who wants quality
biscuits in low price.
• Age & population: Fruit rolls are demanded by the
children whereas Good day, marie gold etc are basically for
more mature people. Little hearts are demanded more by
youngsters.
• Consumer taste & prefernces: A consumer has his own
choices for biscuits they eat what they like most and it all
depends on their own taste & preference and utility to
spend money.
• Cost: Britannia biscuits form a common product
irrespective of rich & poor consumers. They are available
for a price as low as Rs 5 making it affordable for all
sections of the society.
• Expectations: When people expect that the value of
britannia’s biscuits will rise, their demand for it rises.
Nike (Oligopoly)
• Changes in income levels: This factor indicates that people
would like to consume more money when the number is higher.
As their income level increases so does their demand for it.
• Taste & preferences: The factors such as quality, design, brand,
fashion & preference in sports shoes have affected the consumer
before purchasing Nike shoes and those factors have caused
changes in the demand curve.
• Changes in price of related goods-Non price determinant:
There are several football shoe industries that might affect the
demand of Nike football shoe. For instance, Adidas is a
competitive substitute to Nike where if the price of adidas shoe
increases the demand for Nike’s shoe decreases.
• Advertising: If NIKE were to make a successful advertising
campaign for football shoes, they will attract new consumers
and encourage existing ones to increase their demand for Nike.
 SUPPLY FACTORS
Britannia (Monopolistic)
• Cost of production: The cost of producing biscuits is
cheaper making it affordable for everyone.
• Technology: Some of the trends impacting Britannia
industries are E-commerce & related infrastructure
development, property rights & protection of
technology, technology transfer & liscensing issues for
britannia biscuits etc.
• Government policies: The govt is adhering to all rules
and regulations under WTO norms.
• Climate change: If the supply chain is not flexible it
can lead to failure of shipments from one part of the
world getting delayed because of sudden climate shift.
Nike (Oligopoly)
• Cost of production: The cost to make the shoes will be
higher which means there will be less amount of shoes
produced, but the price will go up because they will not
have as much product as they did while making shoes for a
cheaper price in Asia.
• Technology: Increasing R&D investment among firms,
rapid technological obsolescence, widespread use of
mobile technology.
• Government policies: Improving employment law,
expanding consumer law and expanding health & safety
regulations in developing countries.
• Weather conditions: Climate change affects supply
chains and the appropriateness of Nike sports shoes and
apparel in certain regions.
• Goal of producers-profit: In order to achieve profit, they
manufacture superior products, maintaining the integrity
of the global operation in area of design of the product.
 CONCLUSION

Britannia is a monopolistic company because of its differentiated products, there are no

barriers to entry or exit in the market, has limited market power, less control over price and it
is a non-price competition (advertising).

Nike is an oligopoly because there are multiple producers creating the same type of products,
high barriers to enter into the market and has a lot of price setting power.

Britannia had projected the profit at Rs 282 crore. The consolidated revenue rose 6% YoY to
Rs 2,677 crore for the quarter ended June 2019.

Nike reported revenue of $10.2 billion in Q4 2019, making a growth of 4% over $9.8 billion
in Q4 2018.