By: Neha PunjabiBy: Neha Punjabi

Ankit AgarwalAnkit Agarwal

INTRODUCTIONINTRODUCTION

• ITC LimitedITC Limited, is an Indian , is an Indian conglomerate with a turnover of US conglomerate with a turnover of US $ 6 billion and a market $ 6 billion and a market capitalization of over US $ 22 Billion. capitalization of over US $ 22 Billion.

• The company is currently headed by The company is currently headed by YOGESH CHANDER DEVESHWAR.YOGESH CHANDER DEVESHWAR.

CONTD…CONTD…

• It employs over 26,000 people at It employs over 26,000 people at more than 60 locations across India more than 60 locations across India and is listed on FORBES 2000.and is listed on FORBES 2000.

• ITC Limited completes 100 years on ITC Limited completes 100 years on 24th August, 2010.24th August, 2010.

ITC Business Portfolio FMCG

,

Paper & PackagingHotels Agri

Business

Information Technology

Cigarettes Personal CareFoods Lifestyle Retailing

Education & Stationery Matches Incense Sticks

Cigarettes…Cigarettes…

• W. D. & H. O. WillsW. D. & H. O. Wills

• Gold FlakeGold Flake

• Navy CutNavy Cut

• InsigniaInsignia

• India KingsIndia Kings

• Classic (Verve, Regular, Mild & Ultra Classic (Verve, Regular, Mild & Ultra Mild)Mild)

Contd…Contd…

• Silk CutSilk Cut

• ScissorsScissors

• CapstanCapstan

• BerkeleyBerkeley

• BristolBristol

• Lucky StrikeLucky Strike

• FlakeFlake. .

StrategiesStrategies

Market leadershipMarket leadership

Powerful brands across segmentsPowerful brands across segments

Extensive FMCG distribution networkExtensive FMCG distribution network

Direct serving to 2 million retail outletsDirect serving to 2 million retail outlets

Hotels…Hotels…

• ITC Welcomgroup Hotels, Palaces ITC Welcomgroup Hotels, Palaces and Resortsand Resorts is India's second largest is India's second largest hotel chain with over 100 hotels.hotel chain with over 100 hotels.

They have 4 brands in They have 4 brands in hotelshotels

competitorscompetitors

• TAJ GROUP OF TAJ GROUP OF HOTELSHOTELS

• OBEROI GROUP OF OBEROI GROUP OF HOTELSHOTELS

StrategiesStrategies

• Their strategy has been clearly to focus on a Their strategy has been clearly to focus on a few niche areas and provide unique and few niche areas and provide unique and differentiated value propositions to their differentiated value propositions to their guests. guests.

• Their brands ITC Hotel, Welcome Hotel, Their brands ITC Hotel, Welcome Hotel, Fortune and Welcome Heritage, which spans Fortune and Welcome Heritage, which spans luxury to mid-market segments, have been on luxury to mid-market segments, have been on a growth trajectory in recent months. They a growth trajectory in recent months. They have leveraged the unique advantages that have leveraged the unique advantages that India offers in terms of diversity and heritage. India offers in terms of diversity and heritage.

Contd…Contd…

• The physical architecture of their The physical architecture of their properties are unique and offer a properties are unique and offer a local flavour to discerning guests. local flavour to discerning guests.

Category Brand PositioningLuxury ITC Hotel: Luxury Collection "Mansions of Luxury"Upper upscale WelcomHotel: Sheraton "Passion for Quality"Upscale - mid-scale Fortune Hotels "Promise of True Value"Heritage WelcomHeritage "Unique Experiences"

In FMCG, ITC has a strong In FMCG, ITC has a strong presence in: presence in:

Foods businessFoods business • Kitchens of IndiaKitchens of India

• AashirvaadAashirvaad

•   MintoMinto  • SunfeastSunfeast

•   Candyman Candyman 

Contd…Contd…

• BingoBingo brands in ready to eat. brands in ready to eat.

• StaplesStaples

• Confectionery Confectionery

• Snack FoodsSnack Foods

Personal Care Products Personal Care Products businessbusiness

• Fiama di WillsFiama di Wills

•   VivelVivel

•   Essenza di WillsEssenza di Wills

•   SuperiaSuperia brands of products in  brands of products in perfumesperfumes

• Haircare and skincareHaircare and skincare

Safety Matches and Safety Matches and AgarbattisAgarbattis

• ShipShip (through ownership of WIMCO) (through ownership of WIMCO)

• IKnoIKno

•   MangaldeepMangaldeep

•   AimAim brands brands

CompetitorsCompetitors

• HULHUL

• BRITANNIABRITANNIA

• PARLEPARLE

• NESTLENESTLE

StrategiesStrategies

• Their strategy is to consolidate and Their strategy is to consolidate and offer a greater range in the existing offer a greater range in the existing categories and grow these markets.categories and grow these markets.

Agri-business…Agri-business…

• ITC's Agri-Business is India's second largest ITC's Agri-Business is India's second largest exporter of agricultural products. ITC is one exporter of agricultural products. ITC is one of the India's biggest foreign exchange of the India's biggest foreign exchange earners (US $ 2 billion in the last decade). earners (US $ 2 billion in the last decade).

• The Company's 'e-Choupal' initiative is The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enabling Indian agriculture significantly enhance its competitiveness by enhance its competitiveness by empowering Indian farmers through the empowering Indian farmers through the power of the Internet. power of the Internet.

Contd…Contd…

• The company places computers with The company places computers with Internet access in rural farming Internet access in rural farming villages; the e-Choupals serve as villages; the e-Choupals serve as both a social gathering place for both a social gathering place for exchange of information (choupal exchange of information (choupal means gathering place in Hindi) and means gathering place in Hindi) and an e-commerce hub.an e-commerce hub.

ABHISHEK JAINABHISHEK JAIN

• Soya Farmer Soya Farmer & e-Choupal Sanchalak& e-Choupal SanchalakDahod Village, Dahod Village, Raisen District,Raisen District,Madhya PradeshMadhya Pradesh

    ABHISHEK JAINABHISHEK JAIN

    Before ITC introduced us to e-Choupal, we were restricted Before ITC introduced us to e-Choupal, we were restricted to selling our produce in the local mandi. We had to go to selling our produce in the local mandi. We had to go through middlemen and prices were low. ITC trained me to through middlemen and prices were low. ITC trained me to manage the Internet kiosk and I became the e-Choupal manage the Internet kiosk and I became the e-Choupal Sanchalak in my village. Today we are a community of e-Sanchalak in my village. Today we are a community of e-farmers with access to daily prices of a variety of crops in farmers with access to daily prices of a variety of crops in India and abroad – this helps us to get the best price. We India and abroad – this helps us to get the best price. We can also find out about many other important things – can also find out about many other important things – weather forecasts, the latest farming techniques, crop weather forecasts, the latest farming techniques, crop insurance, etc. e-Choupal has not only changed the quality insurance, etc. e-Choupal has not only changed the quality of our lives, but our entire outlook. of our lives, but our entire outlook.

Contd…Contd…

• E-Choupal NowE-Choupal Now

• States covered 10States covered 10

• Villages covered 40,000Villages covered 40,000

• No. of e-Choupals 6,500No. of e-Choupals 6,500

• Farmers e-empowered 4 millionFarmers e-empowered 4 million

StrategiesStrategies

Paper boards & specialty Paper boards & specialty paperspapers

• Coated Virgin BoardsCoated Virgin Boards• Coated Recycled BoardsCoated Recycled Boards

   

• Barrier Poly CoatedBarrier Poly Coated • Cast Coated Cast Coated • GraphicGraphic• Others Others

       

Contd…Contd…

• Cigarette Tissue and ComponentsCigarette Tissue and Components

• Fine PrintingFine Printing

• PackagingPackaging

• Decor PapersDecor Papers

• Niche ProductsNiche Products

Business wise Sales dataBusiness wise Sales dataBusiness/ YearBusiness/ Year GrowtGrowt

hh

%%

Value (Rs in Crore)Value (Rs in Crore)

20052005 20042004

FMCG-FMCG-CigarettesCigarettes

8.48.4 10002.510002.544

9230.279230.27

FMCG-OthersFMCG-Others 85.2 85.2 563.39563.39 304.16304.16

HotelsHotels 124.1 124.1 577.25577.25 257.53257.53

AgribusinessAgribusiness 4.2 4.2 1780.071780.07 1708.771708.77

Paper & pkg.Paper & pkg. 24.924.9 1565.311565.31 1253.291253.29

Net revenueNet revenue 12.9912.99 13349.513349.588

11815.0411815.04

CAGR during FY 2005-CAGR during FY 2005-20082008CategoryCategory CAGRCAGR Growth parametersGrowth parameters

CigaretteCigarettess

10.9 %10.9 % Pricing powerPricing power

HotelsHotels 22.7%22.7% Inward traffic, Inward traffic, occupancyoccupancy

PaperPaper 17.2 %17.2 % Capacity utilization, Capacity utilization, value added productsvalue added products

Agri Agri businessbusiness

34.3 %34.3 % E-choupal, choupal E-choupal, choupal sagar,sagar,

FMCG-FMCG-OthersOthers

60.2 %60.2 % Fast track, decent Fast track, decent share.share.

Market share of ITC Ltd.Market share of ITC Ltd.

• Outstanding market leader Outstanding market leader

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

• Gaining market share Gaining market share

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

SegmentSegment DominanceDominance Contribution %Contribution %Revenue PBITRevenue PBIT

CigarettesCigarettes 70% share70% share 77.0%77.0% 87.7%87.7%

Paper & Paper & Packg.Packg.

Packaging board – No. 1 Packaging board – No. 1 in Asiain Asia

7.3%7.3% 10.7%10.7%

Agri Agri businessbusiness

1of the largest xporters 1of the largest xporters from Indiafrom India

7.0%7.0% 3.7%3.7%

HotelsHotels ITC Group ranks No.2 ITC Group ranks No.2 4.3%4.3% 5.4%5.4%

FMCGFMCG(Others)(Others)

20% share of greeting 20% share of greeting cards market, cards market, 'Aashirvaad' atta is 'Aashirvaad' atta is No.1 in branded No.1 in branded segmentsegment

4.4%4.4% -7.5%-7.5%

The BCG Matrix for ITC The BCG Matrix for ITC Ltd.Ltd.

StarsStars

•HotelsHotels

•Paperboards/ Paperboards/ Packaging. Packaging.

•Agri business.Agri business.

??

•FMCG- OthersFMCG- Others

CowsCows

•FMCG-CigarettesFMCG-CigarettesDogs Dogs

Major strategies followed by Major strategies followed by ITC:ITC:

• Entering into less competitive or unexplored Entering into less competitive or unexplored markets (ready to eat, staples, wafers)markets (ready to eat, staples, wafers)

• Distribution networkDistribution network• Market differentiation ( Ready to eat, Market differentiation ( Ready to eat,

biscuits)biscuits)• Cost control strategy (all products)Cost control strategy (all products)• Extensive advertising (biscuits, Extensive advertising (biscuits,

confectionary, wafers)confectionary, wafers)• Regular introduction of new products (all Regular introduction of new products (all

products)products)