VIVEK COLLEGE OF

COMMERCE
BUSINESS ENVIRONMENT

Parle G

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 Acknowledgement

Our Special thanks to prof.Geeta who has given us the

opportunity to present on this challenging project of Parle-G. It
has also given us immense knowledge of business.
The project is a comprehensive one ranging from fundamental
concepts.
I sincerely hope that this project will satisfy both teacher and
the thought.
I wish to thank Mr. Ajay Singh –Head HR Department.
 CONTENT

SO. NO TOPIC PAGE NO

1. BUSINESS 4
ENVIRONMENT

2. SWOT ANALYSIS 6

3. PROFILE 9

4. HISTORY 10

5. POLITICAL 11
ENVIRONMENT

6. ECONOMIC 12
ENVIRONMENT

7. SOCIAL 15
ENVIRONMENT

8. TECNOLOGICAL 16
ENVIRONMENT

LEGAL 17
9.
ENVIRONMENT

ECOLOGICAL 18
10.
ENVIRONMENT

BIBLIOGRAPHY 22
11.
 What is Business Environment..?

In the words of B.O.Wheeler, "Business environment is the total of

all things external to firms and individuals which affect their
Organization and operations".
Business is the product of the technological, political- legal,
economic, socio – cultural, global and natural factors amidst which
it functions. Three features are common to this web of relationship
between business and its environment. First, there is symbiotic
relationship between business and its environment and among the
environmental factors. Business is influenced by its environment
and in turn, to a certain degree, it will influence the external
forces.
The second feature is that these environmental factors are
dynamic. They keep on changing as years roll by, so does
business.
The third feature is that a particular business firm, by itself, may
not be in a position to change its environment. But along with
other firms, business will be in a position to mould the
environment in its favour, to a large extent.
In simple terms environment means things surrounding
the living being. Everything on this earth, whether living
or non-living is surrounded by an environment and so is
business. The environment of business is a sum total of
natural, economic, social, and political and other forces,
which constitute the surrounding of business.
A study of business environment is very useful to
anticipate opportunities and to plan resources to exploit
these opportunities successfully. It can also be used as an
early warning system to prevent threats or to turn
obstacles into opportunities

The total environment of business, for our purposes, include six

factors, viz.,
1 . GLOBAL
2.POLITICAL,
3. ECONOMIC,
4.LEGAL,
5. TECHNOLOGICAL,
6. NATURAL.
 SWOT ANALYSIS

What is a SWOT Analysis..?

A SWOT (Strengths, Weaknesses,
Opportunites, and Threats) is a tool used to provide a general or
detailed snapshot of a
company's health.

Why use a SWOT Analysis..?

In any business, it is imperative that the business be its own worst
critic. A SWOT analysis forces an objective analysis of a
company’s position vis a vis its competitors
and the marketplace. Simultaneously, an effective SWOT analysis
will help determine in
which areas a company is succeeding, allowing it to allocate
resources in such a way as to
maintain any dominant positions it may have.
 Positive points of Parle-G:
Over the years, Parle has grown to become amulti-million US
Dollar Company. Many of the
Parle products - biscuits or confectionaries, are market leaders in
their category and have won
acclaim at the Monde Selection, since 1971.Today, Parle enjoys a
40% share of the total
biscuit market and a 15% share of the total confectionary market,
in India. The Parle
Biscuit brands, such as, Parle-G, Monaco and Krackjack and
confectionery brands, such as,
Melody, Poppins, Mango bite and Kismi, enjoy a strong imagery
and appeal amongst
consumers.
Negative points of Parle-G:
HLL and ITC’s entry into biscuits will affect Parle After testing the
waters with niche offerings in untapped segments of the biscuit
market, heavyweights Hindustan Lever and ITC have now forayed
into the mass biscuit market. While ITC has launched its glucose
brand, Sunfeast, HLL has decided to differentiate its product,
Modern ‘Energy’ Biscuits, by using wheat and soya as ingredients.
Importantly, both ITC’s and HLL’s new offerings are priced at Rs 4
for a 100 gram pack, the same level as Parle G and Britannia’s
‘Tiger’ glucose biscuits. Given HLL’s and ITC’s massive distribution
reach, this new development would clearly have a significant
impact on the market shares of both Parle and Britannia. In case
the taste of the new products do not go down very well with
consumers, the already established players may get some
breathing space, but it will be only a matter of time before that
gets corrected and the pressure will soon be back on. Structurally,
the entry of players such as HLL and ITC in the mass biscuit
market is bound to affect the dominance of Britannia in the
biscuits market. What’s more,

competition from regional players such as Surya Foods, known for

its ‘Priya Gold’ range of biscuits, has also increased. It certainly
doesn’t help that the company has just had a change in
leadership. Further, since the company has hived-off its dairy
division, overall growth rates would clearly be lower than what
investors have been used to for a while. As far as profitability
goes, much depends on the company’s ability to further reduce
costs, unless there is a further reduction in excise rates.
 PROFILE
Parle-G World's Largest Selling Biscuit

A long time ago, when the British ruled India, a small factory was
set up in the suburbs of Mumbai city, to manufacture sweets and
toffees. The year was 1929 and the market was dominated by
famous international brands that were imported freely. Despite
the odds and unequal competition, this company called Parle
Products, survived and succeeded, by adhering to high quality and
improvising from time to time.
A decade later, in 1939, Parle Products began manufacturing
biscuits, in addition to sweets and toffees. Having already
established a reputation for quality, the Parle brand name grew in
strength with this diversification. Parle Glucose and Parle Monaco
were the first brands of biscuits to be introduced, which later went
on to become leading names for great taste and quality. It was
called Parle Gluco Biscuits mainly to cue that it was a glucose
biscuit. It was manufactured at the Mumbai factory, Vile Parle and
sold in units of half and quarter pound packs.
Parle-G has been a strong household name
across India. The great taste, high nutrition, and the international
quality, makes Parle-G a winner. No wonder, it's the undisputed
leader in the biscuit category for decades. Parle-G is consumed by
people of all ages, from the rich to the poor, living in cities & in
villages. While some have it for breakfast, for others it is a
complete wholesome meal. For some it's the best accompaniment
for chai, while for some it's a way of getting charged whenever
they are low on energy. Because of this, Parle-G is the world's
largest selling brand of biscuits.

HISTORY
Biscuits were very much a luxury food in India, when Parle began
production in 1939. Apart from Glucose and Monaco biscuits, Parle
did offer a wide variety of brands. However, during the Second
World War, all domestic biscuit production was diverted to assist
the Indian soldiers in India and the Far East. Apart from this, the
shortage of wheat in those days, made Parle decide to
concentrate on the more popular brands, so that people could
enjoy the price benefits. The incredible demand led Parle to
introduce the brand in special branded packs and in larger festive
tin packs. By the year1949, Parle Glucose biscuits were available
not just in Mumbai but also across the state. It was also sold in
parts of North India. By the early50s, over150 tonnes of biscuits
were produced in the Mumbai factory. Looking at the success of
Parle-G, a lot of other me-too brands were introduced in the
market. And these brands had names that were similar to Parle
Gluco Biscuits so that if not by anything else, the consumer would
err in picking the brand. This forced Parle to change the name
from Parle Gluco Biscuits to Parle-G. Parle-G was the only biscuit
brand that was always in short supply. It was heading towards
becoming an all-time great brand of biscuit. Parle-G started being
advertised in the 80's. It was advertised mainly through press ads.
The communication spoke about the basic benefits ofenergy
andnutrition. In1989,Parle-G released its Dadaji commercial, which
went on to become one of the most popular commercials forParle-
G. The commercial was run for a period of years. Parle-G grew
bigger by the minute. Be it the packs sold, the areas covered or
the number of consumers. It became a part of the daily lives of
many Indians. It wasn't a biscuit any more. It had become anicon.
Then ext level of communication as sociated the brand with the
positive values of life like honesty, sharing and caring. Thankfully
today, there's no dearth of ingredients and the demand for more
premium brands is on the rise. That's why; we now have a wide
range of biscuits and mouthwatering confectionaries to offer.

POLITICAL ENVIRONMENT

RELATING PARLE-G WITH THE POLITICAL ENVIRONMENT

Two basic political philosophies are in existence all over the world
viz., democracy and totalitarianism. Parle-G follows totalitarianism
as its basic philosophy. Totalitarianism is also called as
authoritarianism, individual freedom is completely subordinated to
the power of authority of the company and concentrated in the
hands of one person or in a small group which is not
constitutionally accountable to the employees. In this method,
final decision is taken by the head only but after negotiating with
everyone by conducting several meetings.
Parle-G biscuit is basically aimed for poor category of people as its
price is only Rs.4 since last 10 years which is affordable to any
class of the population. Therefore government should see that
such companies which provide economic help to the country
should not be disturbed in any sense. Infact government should
help in such a way that such companies grow even more which
can further improve the economic conditions of their domestic
countries. But in India the situation is totally opposite. Parle-G
pays excise duty which if it doesn’t pay can reduce its MRP even
lesser while other products such as cheese, jam, butter which are
consumed by middle or upper class people are exempted from
paying excise duty. In this way government in spite of many
requests is not giving its helping hand to Parle-G. “Constitution
has put several road blocks which have checked the pace of the
company’s economic development.”
Parle-G is totally in favour of the above statement as they say new
rules and policies depend on government to government. They
adopt various laws for their own mutual benefits.

ECONOMIC ENVIRONMENT

Economic environment refers to all those economic factors which

have a bearing on the functioning of a business unit. Any business
firm depends on the economic environment for all the inputs
needed and also to sell their finished goods. Thus, it can be said
that business depends on economy and economy does not
depend on the business. The major macro-economic factors which
have considerable influence on business are:
1)Growth strategy
2)Economic systems
3)Economic planning
4)Industry
5)Agriculture
6) Infrastructure
7) Financial and fiscal sectors
8)Removal of regional imbalances
9)Price and distribution controls
10)Economic reforms
11)Human resources
12)Per capita and national income

RELATING PARLE-G WITH THE ECONOMIC ENVIRONMENT

As part of the efforts towards a larger share of the global market,
Parle has initiated the process of getting ISO 9000 certification.
Parle-G had laid down its first factory in late 1929. this factory
used to manufacture only sweets and candies. But later by 1989
they also started producing biscuits. The four main contents used
in Parle-G biscuits are:
1) Wheat
2) Vanaspati
3) Sugar
4) Salt
PROCESS FLOW CHART
Raw material testing
Mixing
Moulding
Baking
Cooling
Packing
Producers exploit consumers by various tactics. Therefore, Parle-G
had started conducting consumer awareness so as to protect their
consumers from getting fooled. In these awareness campaigns
they suggested various means for

identification of original Parle products. Following are some

indications that will differentiate original from the duplicate ones.
There are errors in the spelling which can exploit people. GLUCO
biscuits are the original name but the duplicate name is GLUCOSE
biscuit.
On all the Parle-G products we find a Parle logo but in duplicates
there is no such logo found.The total work strength of Parle-G in
its Mumbai factory is 730 blue color workers out of which 70 are
female workers. Other than its labour staff there are 200 more
administrative staff. For maintaining cordial relationships between
management staff and labour staff there is one labour union at
present. Earlier there were two labour unions which divided the
labourers into two sections. This increased competition which
gave good productivity initially but later proved to be the cause of
industrial dispute in Parle-G. The two unions started internal
disputes which forced the company to reunite both the unions into
one union. This was the last case of industrial dispute occurred in
Parle-G. Since then there is no such case of industrial dispute.

Social ENVIRONMENT
Human welfare & quality of life are two sides of the same coin.
Both figure a good deal in everyday life and human beings
everywhere endeavor to improve their standard of living. A
comparison of standard of living in different countries has hitherto
been done on the basis of per capita GNP or GNI , converted to a
common currency vis – a-vis the dollar normally in India the per
capita GNP is computed in Rs and then converted into dollars. An
appropriate measure of the quality of the life of the populace of a
country should encompass not only physical aspects such as
education, health, longevity, etc. but should also reflect the state
of human right in the form of civil and political liberties.
 Parle planners have devised certain measures, which tend to
benefit the socially weaker section of the society more than better
off section. Such a system is referred to as a progressive system.
Basic items and basic necessities are price controlled under
advice of Bureau of industrial cost and prices (BICP-now
remodeled on the lines of tariff commission with much more
transparency in operations)
Parle also deter completions resulting in inefficiencies. Such price
controls are made possible through budgetary support. This in
turn has got so magnified that the fiscal deficit has shown a
conspicuous rise invoking comments from international financiers.
The fiscal deficit is estimated to be Rs 13.52 billion (4.4% of GDP)
in 2003-2004. Revenue deficit is estimated Rs 46 crore or 2.5% of
GDP as per the union budget 2004-2005.

Technological environment

Technological environment exercises considerable influence on

business .It is through business that technology reaches people.
Technological changes are very fast and to keep pace with them,
it is difficult to grow an enterprise if new technology is not
introduced in the place of old n outdated one’s. Goods produced
become competitive due to the application of new technology.
Cost reduction and quality improvement are also possible through
the use of modern technology. Moreover, today’s technology is
tomorrow’s junk. Technology includes the technique of production,
innovations and inventions that affect quality and quantity of the
production. Technology is the application of science (basic
science)to actual use in industry and also in other aspects of life

Technological environment is the result of technological

developments in the manufacturing activities. Manager says “a
firm which is unable to cope up with the technological changes
may hardly survive in this competitive world”. He also says “every
business unit has to study new technological developments
connected with its business and introduce them to extent
possible. Along with production, technology needs to be used for
correct and quick decision making”. He also says “technological
environment is the result of scientific and technological
developments taking place in the manufacturing activities.

Legal environment
The regulatory environment is comparatively new component of
total business environment. The government regulates business
activities and government rules and regulations create regulatory
environment .It is the result of government intervention in the
economic and business spheres. Regulatory environment creates
a framework of regulations and legal provisions within which
business units have to operate. What to do and what business can
do are decided by the regulatory environment. It is also called as
legal environment. Legal system of a company has profound
impact on major decisions concerning both investment and
operations in the company.

In brief, regulatory environment is the net results of

various laws , rules, procedures and regulations made by
the government from time to time in regards to the
formation and operations of business enterprise.

There are many laws in India which affect parle’s business directly
or indirectly. The important are noted below:

1. Industries (Development and Regulation) Act, 1951.

2. The Monopolies and Restrictive Trade Practices Act, 1969.

3. Foreign Exchange Management Act, 2000(FEMA).

4. The Indian Companies Act, 1956.

5. Consumer Protection Act,1986.(CPA)

6. Environment Protection Act, 1986.

7. SEBI.

Ecological ENVIRONMENT

Natural factors create some sort of special environment for the

business unit called natural environment. This factors are
uncontrollable. They include geographical factors such as weather
and climatic conditions. In addition , factors like
rainfall,minerals,natural resources which creates natural
environment which are considerable in influencing functions of
business enterprise. In brief , natural environment consist of
air,land,water and all natural resources found on the surface of
the earths in its bowels.
Going international is yet another trend followed by modern
business houses. Internationalization and globalization is fast
becoming imperative for modern business due to technological
innovations, crumbling trade barriers, global flow of capital and
technology, information explosion, intensity of market
competition, changing life styles and the demand for new
products. Production facilities are being set up in different
countries and products are being sold through a global network.
Gradually, business houses are exposed to global competition
which augurs well for consumers. Internationalization of business
is a means of sustaining a strong domestic base in terms of
technology, product, market and the capital over a longer period.
At the company level, globalization means two
things:
(a) The company commits itself heavily with several
manufacturing locations around the world and offers products in
several diversified industries.
(b) It also means the ability to complete in domestic markets with
foreign competitors. In the popular sense, globalization refers
mainly to multi-plant operations.

RELATING PARLE-G WITH THE ECOLOGICAL ENVIRONMENT

According to Parle-G, the term GLOBALISATION does not merely
mean imports and exports, but letting your presence felt all over
the world. Expansion and recognition are the main factors of going
global. The immense popularity of Parle products in India was
always a challenge to their production capacity. Now, using more
modern techniques for capacity expansion, they have begun
spreading their wings and are going global. Parle biscuits and
confectionaries are fast gaining acceptance in international
markets, such as, Abu Dhabi, Africa, Dubai, South America and Sri
Lanka. Even the more sophisticated markets like USA & Australia,
now relish Parle products. Parle-G continues to climb the stairs of
success.
Take a look at the global market where it is being exported. First
came the Middle East thenUSA followed byAfrica and
thenAustralia. An Indian brand, that's exported to almost all parts
of the world. After all that's what you would expect from the Parle-
G World's Largest Selling Biscuit.
Other international companies choose India as a global market
because labour in other countries is costly as compared to in
India. In India things are quite easier. Government has become
more liberal for MNC’s to enter Indian market which results in high
competition with the in-house companies. For example: China has
a huge impact on the Indian market. Cameras from Japan and
China are of hi-tech technologies which are available at the
cheapest rates. There is a huge gap between the prices of Indian
products and such other imported products. Another example is of
Intel-II. They have now started manufacturing chips in India which
further resulted as a tough competition to other Indian companies.
Another international biscuit making company is ITC which winded
up its business within a year due to tough competition laid by
Parle-G.
Parle-G has a strong base in India since 1939. it has now become
the largest biscuit selling company in entire India and is also
proved to be three times more

then the US based biscuit manufacturing companies. Parle-G has

40 factories working all over the country including 6 mother units.
These mother units are located at Mumbai, Rajasthan, Haryana,
Bangladesh, Bhuj and Uttaranchal.
Raymond Vernon had introduced a product- cycle theory in late
1960s, but this theory is still relevant till today. This theory
explains that how companies go global. Initially, small scale
companies produce attractive products and sell them in their
home markets. Sooner or later, foreigners come to know about
these products. As the popularity of these products increases they
start exporting them abroad. As the foreign demand grows, the
economies of foreign production changes. Eventually, the
company starts setting up their own plants globally. In this
manner various companies go global.
But Parle-G doesn’t agree with this theory laid by Vernon.
According to them there are four stages that the company should
follow for going global. They are: infancy, growth, maturity and
decline. Parle-G is yet at the growth stage of the theory for going
global. Going global for any company involves risk. Hence, Parle-G
recruits a special team for market surveys called a market
research team. This team keenly studies the culture, market
situation, fashions, preferences, habits and taste of the consumers
of the country they are going to enter. As Parle-G is meant for
poor class of population, other variety in biscuits made by Parle-G
are for middle and upper class people, they need to study all
levels of society to launch the product similar to their conclusions.
Supplying or launching a new product requires sample testing
before the same. According to Parle-G, company should behave in
the same manner and culture as of its host country. They need to
follow their laid rules and regulations and their local laws. Parle-G
will continue in its host countries the same performance appraisal
methods as in its home country. Because they follow the norm
which says that the employees are of same capabilities and
talents everywhere even though the working conditions are not
the same. Hence, they would appraise the performance of their
employees based on caliber and not based on the impression of
the host countries.

Managerial practice adopted by Parle-G:

Japanese organization
1)Life time employment
2) Slow evaluation and promotion
3) Non-specialized career paths
4) Collective decision making
5) Collective responsibility
They have already adopted the technique of 5’s which most
companies adopt viz., Seiri, Seiton, Seiso, Seiketsu, Shitsuke. The
exports of Parle-G are hardly 3% of its total production. But for
boosting their exports their target is to reach 5% of its total
production. Their main aim is to first fulfill the needs of domestic
market and then boosting their exports.
 BIBLIOGRAPHY

The information mentioned above was taken from:

1) www.parleproducts.com
2) www.wikipidea.com
3) BUSINESS ENVIRONMENT IN INDIA (Dr. BS KS CHOPRA)
EVEREST PUBLISHING HOUSE PUNE.