biscuit case study

1. BY :
APOORVA D MUNIKRISHNA
1st sem MBA
CASE STUDY
BISCUIT INDUSTRY

2. 1. Analyse cost price relationship in
biscuit industry?
Factors affecting cost :
 Raw Material – the cost of biscuit is mainly
affected by the cost of its raw materials i.e.
Maida , sugar, butter, wheat, oil, etc
 Labour – wages of labour affects the cost of
production.
 Machinery- is the fixed cost for the firm
 Power- basic for production of biscuit.
 Weather condition
 Technology
 Taxation
In order for a firm to be successful, it must
focus on both output & price. The quantity
of goods produced must meet public
demand, but the company must also be
able to sell those goods in order to generate
revenue.
The production of goods carriers a cost , so
companies want to find a level of output
that maximizes profit.

3. 2. Describe the general nature of
demand for biscuits in India?
 The biscuits industry in India is the
largest among all the food industries and
has a turnover of around `8000 crores.
India is known to be the second largest
manufacturer of biscuits, the firstbeing
USA.It is classified under two sectors:1.
Organized, 70% market share
2.Unorganized, 30% marketshare About
90% of Indians buy and eat biscuits. The
BIG 4’s of the biscuit industry in India
are
 Britannia
 Parle,& Priya Gold
 ITC
 Besides these, there are around 150
medium to small biscuit factory in India
today. The demand for the biscuits is
very high now a days . The biscuit
factories now a days targeted not only
children's but all levels of age people is
demand is equally distributed.

4. 3. What according to you were the
reason for changing cost price
structure of an Indian biscuit
industry. Justify your answer?
Biscuit is comparatively low margin food
product in the PMCG (packaged mass
consumption goods) sector. The
commodity is also price sensitive. The
price of the biscuits vary according to
the availability of raw materials and
internal factors or environment. When
the industries face a problem of
shortage of raw materials supply the
cost of the biscuits will increase and
hence be the reason for change in cost
price structure. As in the case study the
raw material price increases from 10-
20% higher hence the biscuit industries
decides to increase the cost of biscuits.
As the input cost pressure would imply
increase in prices of biscuits.

5. 4. Biscuits are highly price sensitive and
biscuits are under highly competitive
strategy. What are your comments
about this statement?
Despite being a mass consumption product
in India, the per capita consumption of
biscuits is 2kg. This is fairly low compared
to the per capita consumption of over 10kg
in the US and the UK and over 4.5 kg in the
south –east Asian countries. However,
industry experts believe that this segments
is set to grow at the rate of 15 to 20 cent
over the next few years. There is a huge
untapped opportunity for growth in this
segment. As now the market there are many
brands coming up with lots of desired
biscuits hence it is highly competitive
strategy . As the biscuits now a days is a fast
moving & consuming product from the
children group to old age group its having
lots of demand in the market . Like wise
there many brands with different taste
preferences designed – Britania, Parle, ITC,
Surya foods & Agro and Priya Gold etc are
in highly competitive in market .hence
according to me this two statements holds
enough weightage in selling their products
to consumers