Imperial Tobacco Company of

India Limited (ITC).

Presented to : Presented by
 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 & MISSION
 
• 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.
 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.
 DIVERSIFICATION OF ITC

Hotel
Branded Apparel
Cigaretes

Stationery

Incense Sticks

Packaged Foods

Personal Care

Paper boards

Safety Matches
Information
Technology Agricultu-ral
Industry
 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 Analysis
Strength Weakness

•Cigarette market is 22,000 cr and ITC has •Dependence on tobacco revenues

lion’s share in it • Negative Connection of Tobacco
•Strong brand recognition and product portfolio
•Distribution network
•Management
Opportunity Threat
•Low per capita consumption •Competition both Domestic & International
Of personal care products
•Increasing Tax on cigarettes
•Rural Market
•Regulatory restrictions on cigarettes
•E-Choupal
•Ban on smoking

• Terror attacks
 PEST analysis
Political Ban on communication
Luxury tax
100% FDI allowed

Economical Bidee : cigarette ratio-10:1

Profit margin is high
Other forms of cheap tobacco intake

Socio cultural Becoming status symbol

Changing attitudes towards tobacco
May 31 is no tobacco day
Change in life style

Technological Cheap labour supply

Adapting other concepts like QC,TQM etc.
 The BCG Matrix for ITC Ltd.
Stars ?
•Hotels •FMCG- Others
•Paperboards/ •ITC Infotech
Packaging.
•Agri business.

Cows Dogs
•FMCG-Cigarettes •Branded apparel
In case of tobacco industry

Low bargaining
power of
Low substitutes customer
due to strict
laws

High bargainng
power of
supplier
Porters 5 forces
High rivalry

High threats of
new entrants
 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.
 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
THANK YOU

ITC. Touching your life. Everyday