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Economics report on Britannia Industries

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Factors affecting demand and supply of Britannia Industries and its existing Market Structure.

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Economics report on Britannia Industries

  1. 1. ECONOMICS report ON BRITANNIA INDUSTRIES LTD.(FMCG) BHAVUK SHARMA 20DM059
  2. 2. A CONTENTS 1. EXISTING MARKET STRUCTURE 2. FACTORS INFLUENCINGDEMAND 3. FACTORS INFLUENCINGSUPPLY 4. CHALLENGESFACED BY BRITANNIA 5. REFERENCES
  3. 3. EXISTING MARKET STRUCTURE If we see the existing market structure of Britannia Industries Ltd. we can say that it falls in Oligopoly as Britannia largely operates in Biscuits segment, at present 90% of the annual revenue comes from its biscuits segment which is 22 billion rupees and its market share is 38%, which is very high and if we see the definition of Oligopoly, it says that in this market structure there are few number of firms and these firms have little impact on each other’s market share. For Britannia, it has two big competitors which are Parle and Cadbury’s Oreo. So we see largely there are three companies in the biscuits segment which enjoys the large market share which satisfies the condition of Oligopoly market of small no. of firms. Entry of more firms in biscuits segment like Sunfeast can take some share away from Britannia and if that happens then it will fall in perfect competition but it has very low chances as Britannia continues to grow.
  4. 4. FACTORS INFLUENCING DEMAND 1. Tastes and Preferences for Biscuits: If a consumer likes the biscuits of another company then for Britannia it will affect the demand for the product. 2. Good’s own Price: If Britannia has lower prices than its competitors then the demand will go up or vice-versa. 3. Price of Related Goods: As we talked earlier the major competitors of Britannia are Parle and Cadbury, so if prices of other companies go down the demand for Britannia biscuits will go up or vice-versa. 4. Personal Disposable Income: If the disposable income of a person is more he will purchase more products of Britannia. 5. Population: Britannia targets the people living in both urban and rural areas and if people develop needs then demand will increase.
  5. 5. FACTORS INFLUENCING SUPPLY 1. Price of Sugar: As we know sugar is very important input for making biscuits. If the price of sugar increases it will affect the supply or vice-versa. 2. Taxes on Inputs: The rate of GST will also affect the supply of making biscuits. If the rate of GST is higher than it will raise the cost of biscuits affecting the supply. 3. Climatic conditions: Changes in climatic conditions for e.g. in rainfall patterns, which badly affects crops which are the inputs for making a biscuit, hence affecting supply and delay in production. 4. Probiotic Food: ICMR has seen a need to set up some standards for probiotic food. Strict norms will help in raising the quality standards which in turn will raise the cost for production affecting supply.
  6. 6. CHALLENGES FACED BY BRITANNIA 1. Availability of Good Quality Milk: The biggest challenge that Britannia is currently facing is of good quality milk as it wishes to expand in the dairy products in which there is intense competition and Britannia has to come up with new strategies to face this challenge. 2. Shortage of Packaged Food: Due to this current pandemic Britannia fears shortage of packaged food as there is low movement of trucks from warehousing to retailers, permits to conduct activities which will result in production. So that is a challenge for Britannia. 3. Effect on Demand in Pandemic: Britannia’s profit fell by 4% in the June quarter as Britannia worries that this pandemic is affecting the demand for its products. So it will be a challenge for Britannia to come up with a better strategy to increase demand.
  7. 7. REFERENCES  https://www.business- standard.com/article/markets/britannia- industries-falls-nearly-4-as-worries-over- demand-slump-deepens- 119082100187_1.html  https://www.investopedia.com/terms/o/ oligopoly.asp#:~:text=Oligopoly%20is%20 a%20market%20structure,is%20two%20o r%20more%20firms.  https://www.livemint.com/
  8. 8. PLAG TEST REPORT

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