Britannia Industries is a renowned company set up in India, which is manufacturing a wide range of baked items. The company has initiated its operations as a small scale bakery, however with the repeated expansion of the company, Britannia has included dairy items in its product portfolio. Currently, Britannia is regarded as one of the leading suppliers of baked and dairy items, achieving more than 35% of the market share in the Indian food industry (being a leader in the baked goods and dairy based products). The organization has reported a revenue of Rs. 8500 crore in the fiscal year 2016 (Britannia Industries Limited, 2016). The BCG Matrix includes four categories, with each category denoting specific features. These features help in the classification of the products being manufactured by an organization into cash cows, stars, question marks or dogs. The following section outlines the BCG Matrix for Britannia Industries Limited.
Cash Cows
The first category that has been considered in the BCG Matrix is cash cows which includes all those products that serve as the financial foundation for an organization. These products have a high market share and are in high demand by the consumers which helps in securing a significant amount of profit. Even though the market offers limited room for further growth, the current level of development holds a promising future for these items as they are likely to remain in demand. As a result, these products are expected to remain a significant source of earning and financial gain. There are 3 products that can be identified as cash cow for Britannia, namely, Good Day, Marie Gold and treat. Good Day biscuit has received a change in terms of its packaging, branding and marketing which has resulted in higher sales of the product. Even before these changes, Good Day had been a key source of earning for Britannia. Shashidhar (2015) has further reported that in 2015, the company has added new items in the range of Good day such as Good Day chunkies which has helped in bringing in higher level of profits for the firm, making it a cash cow. Moreover, Chengappa (2015) has indicated that Marie Gold is one such brand manufactured by Britannia that has helped the company in dealing with competitive pressure from rival firms such as Parle. Treat is another biscuit manufactured by Britannia that is a cash generator as it has a high demand among the Indian consumers.
Stars
The second category is related to those products which are not cash cows in the present scenario but can become a cash cow as they are bringing in significant sales and revenues. These products have two main defining features. Firstly they have a high market share, secondly they seem to have further chances of development in terms of increased sales and market share. The stars make a good option for financial investment as the company can gain significant return on the resources invested in this domain. Britannia has several products that are stars for the company, a few of the examples being Tiger, 50-50 and little hearts. Shah (2013) has identified Tiger biscuit playing a significant role in strengthening the financial performance of Britannia. The decision to reshape the brand has been a supporting step in strengthening the position of this product in the BCG matrix.
Question Marks
The question marks on the other hand, depict products that are not performing up to the managerial expectations. These products have more of an uncertain future, rather than a clear course of development as evident in case of stars. There is a chance that continued investment in this area may bring in positive results for the organization. However, the decision to invest in these products needs to be taken after careful analysis as the outcome of investment is uncertain and these products have the risk of becoming a financially burden for the firm. The potential for market growth is one motivator that could encourage the management to work on strengthening these items. There are some products for Britannia that have an uncertain future in the product portfolio of the company. Two such product are Bourbon and pure magic that have not been able to capture the market in a successful manner. Bourbon has not been able to deal with the competitive pressure from the rival company Parle’s biscuit range, resulting in lower sales (Jaiswal, 2010). Dalal (2012) has shared the observation that the launch of a premium brand in the form of pure magic is likely to take time in creating a high demand in the specific market niche. The company has been investing in the brand, assuming that despite the high cost of advertising, pure magic will eventually become a source of stable revenue for Britannia. However, the product is a question mark in the current scenario as it holds the potential to grow but it is not supporting Britannia in terms of financial gain.
Dogs
The dogs include the products that have a poor performance in terms of sales and revenues. These items are regarded as cash traps as the investment is not bringing in the desired results for the organization. The low market share and limited growth chances in the industry makes these products a financial burden for a company. Lastly, Britannia has some products that can be positioned as dogs in the BCG matrix due to the poor performance evident from their sales and revenues. Nutrichoice is one such example which is an underperforming products for Britannia as it is currently facing set back due to the packaging issues of its digestive zero brand (Law, 2016). Due to the legal issues over packaging, the management has to consider the decision of redesigning the packaging and dealing with the potential loss of dealing with the stock that has been supplied in the market. The similarity issue would require Britannia to recall the digestive zero and replace it with the new packaging of the same brand which would incur a significant amount of financial resources.
References
Britannia Industries Limited. (2016). Annual Report. Retrieved from http://britannia.co.in/pdfs/annual_report/Britannia_Annual_Report_2015-16.pdf
Chengappa, S. (2015, July 7). Britannia noses ahead of market leader Parle. Business Line. Retrieved from http://www.thehindubusinessline.com/companies/britannia-noses-ahead-of-market-leader-parle/article7395885.ece
Dalal, M. (2012, August 6). Britannia net profit curbed by higher advertising expenses. Live Mint. Retrieved from http://www.livemint.com/Companies/Z5VFaz9nfaASmYC2p89U3I/Britannia-net-profit-curbed-by-higher-advertising-expenses.html
Jaiswal, K. (2010, July). A crumbling cookie. Business Today. Retrieved from http://www.businesstoday.in/moneytoday/stocks/a-crumbling-cookie/story/8785.html
Law, A. (2016, September 6). Court order packs up Britannia’s ‘NutriChoice Digestive’ biscuit. Business Line. Retrieved from http://www.thehindubusinessline.com/news/britannia-gets-court-injunction-on-nutrichoice-digestive-zero-packaging/article9076624.ece
Shah, A. (2013, May 27). Britannia shares surge to all-time high on strong earnings. Live Mint. Retrieved from http://www.livemint.com/Money/1WUcT7iD0fAhZ2eZphIryH/Britannia-shares-surge-to-alltime-high-on-strong-earnings.html
Shashidhar, A. (2015, November 8). A new recipe. Business Today. Retrieved from http://www.businesstoday.in/magazine/cover-story/bt-500-india-most-valuable-companies-2015-britannia-rank-61/story/224940.html