Imperial Tobacco Company of India Limited (ITC).

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INTRODUCTION

• ITC Limited which previously stood for ‘Imperial Tobacco Company one of India's foremost private sector companies.

• Transform itself from a leading Cigarette manufacturer to an umbrella group which offers diversified products.

• Forayed into field of FMCG, IT, Agri- business to obtain different revenue stream.

• Successful in Hotel Business(ITC welcome group) and collaborated with Sheraton Corporation.

Contd..

• ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing.

• ITC's Agri-Business is one of India's largest exporters of agricultural products.

 • Vision: Sustain ITC’s position as one of India’s most valuable

corporations through world class performance, creating growing value for the Indian economy and the Company’s stakeholders.

• Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

VISION & MISSION

NEED FOR DIVERVICATION• Core business of ITC is in the manufacture of cigarettes and

tobacco.• On domestic front, it realised that there was huge revenue

potential for a launch of wider product range to the Indian consumer base.

• ITC’s FMCG business has one of largest retail networks in the country(2 million retailers)

• Government ban on advertisements of cigarettes, high tax rates, decline for the demand of cigarettes.

• The company felt the to diversify from the early 1970 and started entering those business that provides good ROI and a potential for future expansion.

• Leads to concentrate to the other business opportunities.

Hotel

Cigaretes

Incense Sticks

Personal Care

Safety Matches

Agricultu-ral IndustryInformation Technology

Paper boards

Packaged Foods

Stationery

Branded Apparel

DIVERSIFICATION OF ITC

Diversification Strategy

Cigarettes :• Focus to deliver highest product quality and value to consumers helps

them to lead in cigarettes industry.• To boost sales growth introduce festivals packs of brands like: flake

filter, bristol filter, berkeley filter and Scissor filter.

Branded food business(2001):• Launch kitchen of India(Canned foods from ITC Bukhara

restaurants).• Brand offers ready to serve products.• Introduced Aashirwad brand of wheat(atta) in 2002.• Entered into biscuit market by launching Sunfeast brand in 2003.

Stationery products:• Launch greeting cards under the brand name Expressions.• Gain popularity due to introduction of cards in different

languages.

Safety matches • Increase market share and its sales by offering unique designs

and value added features such as AIM.

Hotels(1975)• Four brands- ITC Welcomgroup, Welcomhotels, Fortune

hotels, Welcomheritage

SWOT AnalysisStrength

•Cigarette market is 22,000 cr and ITC has lion’s share in it•Strong brand recognition and product portfolio •Distribution network•Management

Weakness

•Dependence on tobacco revenues• Negative Connection of Tobacco

Opportunity•Low per capita consumptionOf personal care products

•Rural Market

•E-Choupal

Threat•Competition both Domestic & International

•Increasing Tax on cigarettes

•Regulatory restrictions on cigarettes

•Ban on smoking

• Terror attacks

PEST analysisPolitical Ban on communication

Luxury tax 100% FDI allowed

Economical Bidee : cigarette ratio-10:1Profit margin is highOther forms of cheap tobacco intake

Socio cultural Becoming status symbolChanging attitudes towards tobaccoMay 31 is no tobacco dayChange in life style

Technological Cheap labour supplyAdapting other concepts like QC,TQM etc.

The BCG Matrix for ITC Ltd.Stars•Hotels•Paperboards/ Packaging.•Agri business.

?•FMCG- Others•ITC Infotech

Cows•FMCG-Cigarettes

Dogs •Branded apparel

Porters 5 forces

Low bargaining power of customer

High bargainng power of supplier

High threats of new entrants High rivalry

Low substitutes due to strict laws

In case of tobacco industry

Market share of ITC Ltd.

Outstanding market leader

• Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports.

Gaining market share

• Nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.

Source: Annual Accounts/Equity research

Critical Success Factor

•SITE AND LOCATION

•FINANCIAL STRENGTH

•BRAND RECOGNITION

•YIELD MANAGEMENT

Corporate Social Responsibility

• ITC's businesses generate livelihoods for over 5 million people.  

• ITC's globally recognised e-Choupal initiative is  the world's largest rural digital infrastructure benefiting over 4 million farming families.  

• ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an estimated 35 million person days of employment among the disadvantaged. 

• ITC's Watershed Development  Initiative brings precious water to nearly 35,000 hectares of dry lands and moisture-stressed areas. 

• ITC's Sustainable Community Development initiatives include women empowerment, primary education.

HONOURS & AWARDS

• Ranked 4th in net profit amidst India’s private sector corporation, Forbes magazine under the section of world’s leading companies(2004).

• Received the world business award in 2004 initiated as a part of United Nations ‘Millennium Development objectives due to leading role in reducing poverty and creating work opportunities at a national level.

• Received ‘Enterprise Business Transformation Award 2004’ for Asia pacific region by Wharton Infosys.

Issues with ITC

• Advertisement ban 2003• Analyst view• Decrease in sales of Cigarettes• Luxury tax• Regulatory laws• Health awareness

Recommendation

•Should develop strong hold on non-tobacco business•Rural market should be more explored•Promotional methods should be emphasized•Export of their confectionery items•CSR could help in holding their image•More ventures could enhance their presence

ITC. Touching your life. Everyday

THANK YOU