Business Environment Nandan Choudhary

Assignment 1. 21810036

Company: India Tobacco Company (ITC) Limited.

Classification of Business: An Indian private sector company with diversified conglomerate in
businesses spanning FMCGs, Hotels, Paperboards and Packaging, Agri Business and Information
Technology.
Classification of Industry:
Nature Of Activity: A conglomerate company.
Competitive structure: The firm, 29.4% owned by British American Tobacco Plc. About 28.5%
is controlled by various Indian state-run insurance companies and a government-controlled bad
bank.
Market Structure of ITC is Monopolistic Competition in nature.
It is also one of the leading brands of India.
Some of the main and leading competitors of ITC Ltd. in personal care products are:
Hindustan Unilever Ltd, Procter & Gamble, Colgate Palmolive Ltd, Dabur India Ltd., Godrej
Consumer, Emami Ltd.
Entry and Exit barrier being low therefore a lot of players in the market, so players have wafer thin
market shares.

Vision: “To Sustain its position as India's most valuable Corporation, creating value for the Indian
economy and the Company's stakeholders.”

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

Internal Environmental Factors:

1.ITC has a strong and experienced management.
2. Strong brand presence, excellent products advertising.
3. Diversified product and services portfolio which includes FMCG, Hotel chains, paper & packaging
and agri-business.
4. Over 6500 E-Choupal CSR activities and sustainability initiatives enhance ITC’s brand image
reaching over 4 million farmers.
5. ITC limited employees over 25,000 people.
6. Excellent research and development facilities.
External Environmental Factors:
1. The cigarette industry in India continues to operate in a challenging economic environment,
particularly with respect to taxation and regulations relating to communication and consumption.
2. India is a major grower and exporter of tobacco in the world.
3. There is a growing public concern regarding increasing consumption of tobacco, its health
implications and the need to prevent access to minors and non-users.
4. ITC cigarettes have come a long way and that can be concluded by the fact that the supply chain
management that the ITC employs now is of the latest trends- they have a great inventory control,
logistics support etc.
5. The gap between urban and rural households in cigarette consumption is the highest in low and
lower-middle income households.
6. Ban on Smoking in Public Places with effect from last quarter of 2008 resulting in a dip in sales
and profit.