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ITC
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History of ITC
ITC, a relationship with an unpretentious start, was framed on August 24, 1910. Majestic
Tobacco Firm of India Restricted was renamed to ITC in 1970 and consequently to I.T.C.
Bound in 1974 when the commitment with respect to affiliation changed. The full stops in
the affiliation's name were gotten out on September 18, 2001 to respect the affiliation's
multi-business portfolio, which combines countless affiliations including Quick Client Item,
which coordinates Food groupings, Individual Idea, Cigarettes and Stogies, Stepped Dress,
Coaching and Making material Things, Incense Sticks and Security Matches, Lodgings,
Paperboards and Specialty Papers, Bundling, Agri-Business, and Data Advancement. The
affiliation is right now known as ITC Restricted, where "ITC" isn't overall an initialized
structure or an abbreviated structure.
The Affiliation had veritable early phases. The Affiliation was based out of a leased office on
Radha Bazar Way in Kolkata. On August 24, 1926, the Affiliation praised its sixteenth
birthday celebration merriment by getting a block of property at 37, Chowringhee (at this
point called J.L. Nehru Street) in Kolkata for Rs 310,000. The Affiliation's decision was
groundbreaking in various regards. It was to go probably as the beginning of a really long
and reinforcing outing into India's future. Following two years, the Affiliation's central
command building, known as "Virginia House," was made on that site and would keep on
changing into a darling picture in Kolkata.
At any rate, the hidden sixty years of the Affiliation's plan of experiences were
phenomenally given to the development and solidifying of the Cigarettes and Leaf Tobacco
undertakings, ITC's Bundling and Printing Business was fanned out in 1925 as a crucial in
switch mix for ITC's Cigarettes business. Today, it is India's most present-day crushing
office.
The 1970s saw the beginning of a corporate progression that would get tremendous
changes in the Affiliation's plan of experiences. The Affiliation began its lodging division in
1975 by buying an inn in Chennai, which it renamed the "ITC-Welcomgroup Inn Chola"
(before long renamed My Fortune, Chennai). Adding an inspiration for the nation was ITC's
favored focus to enter the lodging business. ITC picked the inn district considering its
capacity to get monstrous extents of new cash, make the development business design,
and make basic extents of brief and freak positions. From that point forward, ITC's
Lodgings division has loosened up to change into a market chief, with more than 100
ensured and managed working environments spread from one side of the world to the
other.
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ITC joined the paperboard market in 1979 by fanning out ITC Bhadrachalam Paperboards
Restricted. Bhadrachalam Paperboards joined with the Relationship on Walk 13, 2002, and
changed into the Bhadrachalam Paperboards Division of the Affiliation. This division
amalgamated with the Affiliation's Tribeni Tissues Division in November 2002 to fan out the
Paperboards and Specialty Papers Division. The turn of events, capability, quality, and
creation procedures of ITC paperboards are equivalent to the best on the planet. It has
moreover contributed fundamentally to the improvement of Sarapaka, a fiscally held
region in the domain back from getting Andhra Pradesh. It works straightforwardly in
planning, ordinary confirmation, and neighborhood. ITC bought BILT Current Bundling Co.
Ltd's paperboard making work environments in 2004. (BIPCO)
ITC spread out Surya Tobacco Co. in Nepal in 1985 as an Indo-Nepal and English joint
endeavor. Surya Tobacco changed into a right hand of ITC Bound in August 2002, and
name was converted to Surya Nepal Private Limited. In 2004, the firm meandered into
dress creation and items.
ITC bought Tribeni Tissues Restricted in 1990, a specialty paper making firm and a
significant provider of tissue paper to the tobacco business. The hardening affiliation was
known as the Tribeni Tissues Division (TTD). TTD amalgamated with the Bhadrachalam
Paperboards Division in November 2002 to fan out the Paperboards and Specialty Papers
Division to benefit from key and helpful composed endeavors.
Today, the Division is one of India's basic exporters. ITC's noteworthy and at this point all
around the planet saw e-Choupal program started in 2000 with Madhya Pradesh soybean
ranchers. It covers multiple million ranchers in ten states. Also, the agri associations vertical
has been focusing on overhauling crop yield while building relationships with the plant
area, the 'Choupal Pradarshan Khet' project.
2002: Planning and Making material Things - Greenest Things That anyone could hope
to find
In 2002, ITC presented the Paperkraft brand of extravagance journals. The Friend scratch
pad line was comfortable in 2003 with supplement its responsibility and focus on a more
noteworthy understudy area. Accomplice has framed to change into India's driving scratch
pad brand and has loosened up its line to get a more noteworthy piece of the school pack.
A few spot in the extent of 2007 and 2009, the 'Cohort' brand presented Reasonable Books,
Drawing Books, Calculation Boxes, Pens, and Pencils. In 2008, ITC renamed the firm
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Readiness and Forming material Things Business and acquainted India's by and large
fundamental harmless with the climate premium business paper under the 'Paperkraft',
which gives a wide space in the transcendent head creating material and office
consumables class.
Moreover, in 2000, ITC joined the Way of life Retailing market with the Wills Game line of by
and large quality relaxed wear for people. Wills Way of life, a top of the line corporate store,
later loosened up its thing proposing to combine Wills Clublife evening wear (2003) & Wills
Model standard wear (2002) . In 2002, ITC transported off its men's wear picture, John
Players, into the prestigious portion. Wills Way of life changed into the title embellishment
of the country's most stupendous style occasion, Wills Way of life India Style Week, in 2006,
which has gotten purchasers and retailers partition as the single most prominent B-2-B
stage for the Style Plan business. To recall the event, ITC conveyed a fascinating 'Wills
Engraving,' passing the occasion on to clients.
ITC's entrance into the Food sources industry is an outstanding layout of effectively joining
two or three inside gifts to make another motor of corporate development. Everything
began in August 2001, when 'Kitchens of India' organized to-eat Indian power cooking were
presented. ITC entered the frozen yogurt parlor and staples attempts in 2002 with the
presentation of the brands mint-o and Candyman treats, as well as Aashirvaad atta (wheat
flour). Sunfeast was presented in 2003, as the Affiliation entered the bread rolls industry. In
2007, ITC delivered Bingo! a quickly making stepped nibble fragment. ITC made Sunfeast
Hurray! in 2010 to join the Indian second noodle industry.
Agarbattis and Security Matches - Supporting the Little and Hotel District in 2002
In 2002, the Security Matches project tracked down one more encapsulation of ITC's
concept of adding to the sincerity of the entire worth chain. ITC right now sells prominent
security match brands like iKno, Mangaldeep, and Point.
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In 2005, ITC joined the Solitary Idea Business. In eight years, the Particular Idea portfolio
has connected under the names 'Essenza Di Wills, 'Vivel, and 'Superia,' and 'Fiama Di Wills,'
which have gotten positive client examination and have been reliably widened
countrywide. In May 2013, the affiliation extended its thin portfolio with the presentation of
Draw in, India's most significant line 'a couple of antiperspirants.'
ITC presented their hand-moved stogie, Armenteros, to the Indian market in 2010.
Armenteros stogies are just open tobacconists in unambiguous lodgings, excessive burger
joints, and preeminent clubs."
India has a distinct pattern of tobacco use, with legal cigarettes making up less than 12% of
total tobacco use. The overall balance of tobacco use is represented by a variety of
traditional goods, including different chewing tobacco varieties, such as bidis India is the
country in the world with the lowest per capita cigarette usage as a result. India has a tiny
share of just 1.8% of the global population, although having nearly 17% of it. cigarette use
worldwide, but accounts for roughly 84% of the global consumption of non-smoking
tobacco. However, because they were influenced by a Western model of tobacco
consumption, India's tobacco control strategies are incompatible with its distinctive pattern
of consumption, which is concentrated in metropolitan areas and where cigarettes account
for more than 90% of tobacco use.
The fact that tobacco consumption in the form of legal cigarettes decreased from 86 million
kg in 1981–82 to 68 million kg in 2013–14 despite an increase in overall tobacco
consumption from 406 million kg in 1981–82 to 577 million kg in 2013–14 during the same
period attests to the fact that the demand for cigarettes in India is highly price elastic. As a
result, even though India's overall tobacco use is rising, the proportion of legal cigarettes in
that consumption has decreased from 21% to under 12%.
The cigarette sector had to deal with discriminatory and punitive hikes in Value Added Tax
(VAT) rates by several States, as well as a sharp increase in Excise Duty for two years in a
row. Such tax rises not only harm the domestic legal cigarette market and reduce this
sector's revenue potential, but they also fall short of the nation's goal of tobacco control.
There is a large amount of dual usage in India, with many smokers also using other tobacco
products, according to a number of independent reports.
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Over time, there has been a considerable movement in tobacco usage toward less
expensive and revenue-efficient forms like bidis, chewing tobacco, etc. due to high tax
incidence and a discriminatory regulatory system on cigarettes.
Unlawful Trade
The high taxation strategy that was specifically targeted at cigarettes contributed to the
explosive expansion of illicit smokes in India. India is the fifth-largest contraband cigarette
market in the world, according to several surveys. The government has suffered a
considerable revenue loss as a result, which the FICCI pegs at about 6,000 crores. Current
estimates place the scale of India's illegal cigarette trade, which includes smuggled
cigarettes from outside and from within the country that have been taxed illegally, at 24.3
billion sticks annually, or 19% of the nation's total cigarette market.
The illegal tobacco trade is one of the top three global organized crime industries,
according to numerous international studies.
The desire for cheaper, tax-elided cigarettes has increased as a result of high domestic
tobacco taxation. To increase the income potential of tobacco and deter the expanding
illicit trade, a fair and balanced tax system is urgently needed. Only by maintaining
cigarette tax stability and expanding the tobacco tax base is this possible.
● · In India, agriculture employs about 50% of the labour force and provides a living
for 75% of the people who are below the poverty line.
● · The industry consumes 80% of the nation's fresh water supplies, 25% of all
power, and more than 70% of all subsidies from the federal government.
● · However, it only represents around 14% of GDP. Consequently, it is tragically
unfortunate that the farmer's per capita income is less than one-fifth of the national
average.
● · A declining base of natural resources, disjointed value chains, fragmented
landholdings, shoddy infrastructure, a lack of knowledge, and numerous
intermediaries are to blame for such low incomes.
● · Additionally, about 55% of India's total sown area receives all of its water needs
from rainfall.
● · A long-term approach to solving these problems requires a patchwork of
different policy options that address the problem in the short, medium, and long
times. These actions will also guarantee increased private investment and
participation, resulting in a significant recovery of this industry restrictions such as
not implementing the "Model APMC Act" as advised by the Center results in a variety
of transportation costs, handling costs, and fees for different agents. Through non-
value-adding operations, this effectively raises costs by about 20%. Direct
communication between farmers and agribusinesses is made possible by the Model
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Environmental Challenges:
● · The chase for unchecked economic expansion has severely devastated the
planet's natural resources.
● · According to the ecological footprint of the Earth, annual natural resource
consumption will far exceed the planet's potential for regrowth.
● · People will have access to less resources than were accessible in 1950 as a result
of the growing population.
● · Changed weather patterns and an increase in the frequency of extreme weather
events are two ways that climate change is being felt. This has a negative influence
on farming livelihoods and agricultural production. Climate change and global
warming have significant implications for the Company and some of its primary
stakeholders, the farmers and communities, given that numerous of ITC's
businesses depend on agricultural inputs.
Social Challenges:
● · The planet's natural resources have been badly depleted by the pursuit of
unfettered economic expansion.
● · The ecological footprint of the Earth predicts that annual natural resource
consumption will be much higher than the planet's capacity for renewal. Because of
the expanding population, fewer resources will be available to people than they
were in 1950.
● · Climate change is being felt in two ways: altered weather patterns and a rise in
the frequency of extreme weather occurrences. Agriculture production and farmer
lives are negatively impacted by this. Given that many of ITC's operations rely on
agricultural inputs, climate change and global warming have a substantial impact on
the company as well as some of its primary stakeholders, the farmers and
communities.
● · Groundwater alone contributes for 39% of the water used in agriculture, out of
the total amount of water available for it. However, according to the Central Ground
Water Board, 1,565 blocks (or one-third of the total) have groundwater conditions
ranging from semi-critical to over-exploited.
● · On the basis of the available data, it is convincingly argued that these elements
are expected to get worse under the threat of climate change, increasing the
frequency and severity of droughts and floods. Long-term climate change will
therefore have a variety of effects on the rural economy, the majority of which
would jeopardize the food security of the most vulnerable.
Given India's favorable demographic dividend, it is obvious that a sizable number of young people in
India are entering the labor force each year. It is crucial for an organization to guarantee the complete
safety of this priceless resource. While we are making steady progress toward our goal of having no
accidents on company property, we are aware that accidents outside of the workplace are increasing in
India due to problems like the continued use of two-wheelers, which are unsafe due to poor road
conditions and inadequate infrastructure.
B2B value creation by ITC Limited
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Table Stakes:
1.) Acceptable Price: They provide products to retailers at an acceptable price offering
them good margins thus getting higher shelf space by giving value to retailers.
Functional Values:
1.) Improved top line: Ensured efficient market servicing and availability of the
Company’s products through concerted actions across all nodes of operations
including extension of support to trade partners, realignment of the distribution
infrastructure, deployment of innovative delivery models, strategic partnerships
and enhanced usage of digital technologies.
2.) Cost reduction: The dealers who are connected with ITC since a long time get
considerable cost advantage and higher profit margins
3.) Product Quality: ITC has the best in class product quality and brand equity
3. Stability: As ITC has established its brand equity since so many years, its
stability is never in question and therefore the stability of the retailers is also
solid.
4. Reach: As stated above, the rural and urban penetration of ITC is extremely
high, and the reach via various mediums is extremely vast.
Individual Value
1. Marketability: Develop NextGen Indian agriculture anchored on digitally
powered and climate smart agri value chains along with appropriate market
linkages.
2. Growth and development: Provides support to employees with certification
courses as well as management courses as well as other stakeholders like
farmers with Agri training giving them exposure to achieve their desired growth.
Inspirational Value
1. 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
2. Social Responsibility: Sustainability 2.0 calls for inclusive strategies that can
support sustainable livelihoods, pursue newer methods of combating climate
change and facilitate the transition to a net zero economy, work to ensure water
security for all, and establish a successful circular economy for post-consumer
packaging waste in order to "Build Back Better"
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Functional Elements:
1. Reduced effort: Ensured availability of resources during covid times by starting
home delivery of FMCG goods and partnering with delivery services like Zomato,
Swiggy and Domino’s Foods with prepared packages of essential goods for
households.
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2. Sensory appeal: Brought Yippee in market to compete with maggie and also
increased its market and took advantage when Maggie, it’s main rival got banned
in India.
3. Variety: They have a multiple variety of products in each category starting from
noodles to biscuits to coffee beans to pulses to essentia care category giving
customers multiple options to choose from.
4. Simplifies: They have started their e-platform as well to simplify and deliver
products to customers doorstep making it convenient for them to buy groceries.
Emotional Elements:
1. Nostalgia: ITC brings nostalgia in marketing most of their products. ITC
Mangaldeep evokes scent of nostalgia in it’s ad. The tradition and legacy
connected to its sandal version are the focus of the ad.
2. Wellness: ITC ensures higher quality of products at reasonable price thus
ensuring wellness of it’s consumers. Each hotel of ITC is a premier location for
holistic health and wellbeing, offering a variety of comprehensive services to
improve every aspect of your stay, from opulent treatments at the award-winning
Kaya Kalp.
Analysis of Results
ITC targets virtually every demographic due to its diverse product offering. All gender and
age groups are targeted by the company. Young and adult Americans from urban and rural
areas make up the majority of the company's target market. There are various types of
products available for the upper-middle class and middle class, each with a different price
range.
ITC has grown so much that it now produces practically every type of product and is almost
present in most industries.
Value Proposition
ITC Hotels - ITC Hotels provides guests with a premium commitment in addition to a
distinctive value offering as a green hotelier, with all of its luxury hotels located in prime
leisure and commercial locations.
ITC Infotech - ITC Infotech assists clients with their digitalization by offering global digital
solutions to a variety of industries and providing unique value propositions by building
skills across numerous innovative and digital technologies.
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Profit Formula:
Revenue Model
● Agri-business contributes about 7.0%, hotels contribute about 4.3% & FMCG products
Cost Structure
Key Resources:
Employees
Employees are one of the primary resources at ITC and actively participate in goal-setting,
strategy formulation, and strategy execution.
ITC offers its workers a positive work atmosphere that promotes initiative and creativity,
results in excellent performance, and demands accountability from human capital.
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Distribution Network
ITC has a huge distribution network that reaches all of its enterprises, and ITC employs
several promotional techniques to strengthen that distribution network.
Investors
ITC's important partners & investors make substantial investments that help the business
succeed and grow.
ITC has a vast network of e-Choupal centers that serve more than 50K communities and
include farm-produced goods including rice, coffee, wheat, and other things.
ITC owns a company called Indian Leaf Tobacco Development for quick and simple access
to essential raw materials (such as tobacco leaves).
With the help of its wealth out of waste project, ITC generates raw materials locally. As part
of this project, the corporation gives each family in a certain area a bag to utilize for all of
their solid trash, including such metal, paper, and plastic.
Manufactured Capital
ITC has enough developed tangible assets, such as facilities, equipment, and infrastructure,
to use in service delivery and product creation.
Financial Resources
ITC has a pool of cash that it uses to produce things and provide services for its various
enterprises.
Intellectual Resources
Among the company's most important resources is its intellectual property, which includes
its rights, licenses, and trademarks.
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Key Processes:
Sourcing Capability
ITC has great procurement capability. ITC was able to expand its company into new
industries with the aid of a number of sources.
After building a solid foundation in the agricultural industry, they ventured into FMCG.
The agriculture sector's wheat helped to create a market for the Aashirvaad atta. ITC
employed its numerous resources in a very effective and efficient manner.
ITC used its recognizable identity to penetrate into the stationery industry after becoming
well-known in the agribusiness and FMCG sectors.
By introducing classmates through ITC, they were able to gain a sizable market share.
Related Businesses
ITC had a lot of businesses that were interlinked. This aided them in producing their basic
resources internally.
ITC, for instance, packaged a variety of its goods using its paperboard business. It
decreased expenses and the requirement for outsourcing.
Focus on Sustainability
ITC has sustainability as its primary concern. ITC's primary projects concentrate on
sustainability.
They have mostly focused on industries that have the potential for long-term sustainability
and increased growth.
R&D
With over 400 highly skilled scientists working at the Life Sciences & Technology Centre
(LSTC), Bengaluru, they have cutting-edge R&D capabilities and are the subject of over 950
patent and design trademark applications.
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Key Activities
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Customer Segment
Value Proposition
ITC is involved in a variety of sectors and responds to clients' diverse requests by offering
products and services in several areas such as FMCG, Hotels,
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Key Resources
ITC has both tangible and intangible resources as part of its key resources. These are
described as under:
Tangible resources
● Financial Resources
● Physical Resources
● Raw Material Access
● Manufactured Capital
● Intellectual Resources
● Trademarks
● Organizational resources
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Intangible resources
● Human resources
● Knowledge, Skills, and Expertise of Managers
● ITC Brand
● Skilled and trained staff carrying global exposure
● Distribution Network
Customer Relationships
ITC has created a specialised command centre that analyses trends and extracts key customer
insights. This aids in the launch of communication campaigns and the development of new
products based on client demands and preferences. More than 500 similar initiatives have been
managed by this command centre on various social media platforms such as Instagram,
Facebook, and Twitter. Among these ads are posts on the cricket World Cup, Yuvraj Singh
(cricketer) handing off his sneakers, and so on.
Safety of customers
ITC develops strong relationships with its clients by ensuring their safety with world-class quality
products and services. Safe ingredients are known internationally, are utilised in the majority of
its products, and are designed with the highest performance and safety criteria in mind.
ITC's production facilities have first-rate hygiene standards, strong QA (quality assurance)
systems, and EHS management systems that adhere to various ISO and OHSAS standards.
For example, ITC has implemented the following safety precautions across its many businesses
This ITC business area creates high-quality products by doing significant research at the ITC
R&D facility. Ingredients that are safe and internationally recognised are employed in the
formulation of such products, and these ingredients meet the highest safety and performance
standards.
The education and stationery industry
Only certified non-hazardous materials, like as ink, paper, and dyes, are used in this industry.
ITC has a testing system through which all garment styles and raw materials are processed
after testing at the in-house lab so that quality standards can be ensured.
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Revenue Stream