ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 22 billion and a turnover of US $ 6 billion.* ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri- Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly
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ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 22 billion and a turnover of US $ 6 billion.* ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today.
ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week.
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.
While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain
growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part."
ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering.
Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade).
The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet.
This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing customer challenges through innovative IT solutions.
ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating.
ITC employs over 26,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth
generating capabilities in a globalising environment to consistently reward more than 3,53,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations.
This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."
HISTORY
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974.
In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the Company's name were removed effective September 18, 2001.
The Company now stands rechristened 'ITC Limited'.
BACKGROUND-
The Company’s beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.
This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks.
Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company.
ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house.
In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation.
ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India.
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division.
In November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable to the best in the world.
It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product range.
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal.
In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal).
In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD).
To harness strategic and operational synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002.
Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters.
ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers.
ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operatonal in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.
In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards. A line of premium range of notebooks under brand “Paperkraft” was launched in 2002.
To augment its offering and to reach a wider student population, the popular range of notebooks was launched under brand “Classmate”in 2003.
“Classmate” over the years has grown to become India’s largest notebook brandand has also increased its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw the launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the “Classmate” brand.
In 2008, ITC repositioned the business as the Education and Stationery Products Business and launched India's first environment friendly premium business paper under the “Paperkraft” Brand. “Paperkraft” offers a diverse portfolio in the premium executive stationery and office consumables segment.
Paperkraft entered new categories in the office consumable segment with the launch of Textliners, Permanent Ink Markers and White Board Markers in 2009.
ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) andWills Clublife evening wear (2003).
ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry.
To mark the occasion, ITC launched a special 'Celebration Series', taking the event forward to consumers.
In 2000, ITC spun off its information technology business into a wholly owned subsidiary,ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area.
Today ITC Infotech is one of India’s fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals -
Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and Media & Entertainment.
ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes.
In 2002, ITC entered the confectionery and staples segments with the launch of the brands mint-oand Candyman confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment.
ITC's entered the fast growing branded snacks category with Bingo! in 2007. In eight years, the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing.
In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro.
ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.
ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme).
Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium
range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively.
The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008.
ITC is involved in following businesses:strategic business unit(SBU’S OF ITC LTD.)
Cigarettes:
ITC is the market leader in cigarettes in India and has a wide range of popular brands such as Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake in its portfolio.
Packaging:
ITC's Packaging & Printing Business is the country's largest convertor of paperboard into packaging. It was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It offers a variety of value-added packaging solutions for the food & beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries.
Hotels:
ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai which was rechristened Hotel Chola. Today ITC-Welcomgroup with over 70 hotels is one of the foremost hotel chains in India.
Paperboards:
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards. ITC's Paperboards business has a manufacturing capacity of over 360,000 tonnes per year and is a market leader in India across all carton-consuming segments.
Greeting, Gifting & Stationery:
ITC's stationery brands "Paper Kraft" & "Classmate" are widely distributed brands across India. The Paperkraft designer stationery range consists of notepads & multi subject notebooks in hard, soft covers & multiple binding formats including spirals, wiros etc. ITC's Greeting & Gifting products include Expressions range of greeting cards and gifting products.
Safety Matches:
ITC's brands of safety matches include iKno, Mangaldeep, VaxLit, Delite and Aim. The Aim is the largest selling brand of Safety Matches in India. ITC also exports premium brands to markets such as Europe, Africa and the USA.
Aggarbattis:
ITC has launched Mangaldeep brand of Aggarbattis with a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra. Mangaldeep is also being exported to USA, UAE, Bahrain, Nepal, Singapore, Malaysia, Oman and South Africa.
Lifestyle Retailing:
ITC entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). In 2002, ITC entered into the popular segment with its
men's wear brand, John Players. In 2005, ITC introduced Essenza Di Wills, an exclusive line of prestige fragrance products.
Food:
ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the "Kitchens of India" brand. In 2002 it expanded into Confectionery, Staples and Snack Foods segments. ITC's brand in Food category include: Kitchens of India, Aashirvaad, Sunfeast, Mint-O, Candyman, and Bingo!.
Agri Exports:
ITC's International Business Division (IBD) is the country's second largest exporter of agri-products. ITC exports Feed Ingredients (Soyameal), Foodgrains (Rice, Wheat, Pulses), Coffee & Spices, Edible Nuts, Marine Products, and Processed Fruits.
e-choupal:
The e-Choupal model of ITC has been very effective in tackling the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others. ITC's e-Choupal won the Stockholm Challenge 2006 award is for using information technology for the economic development of rural communities.
SWOT AnalysisSWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues
Strengths
ITC leveraged it traditional businesses to develop new brands for new segments.
For example- ITC used its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its FMCG products.
ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business.
ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery.
WeaknessesThe company's original business was traded in tobacco. ITC stands for Imperial Tobacco Company of India Limited.
It is interesting that a business that is now so involved in branding continues to use its original name, despite the negative connection of tobacco with poor health and premature death.
To fund its cash guzzling FMCG start-up, the company is still dependent upon its tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is responsible for 80% of its profits.
So there is an argument that ITC's move into FMCG (Fast Moving Consumer Goods) is being subsidized by its tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in India - and this single brand alone hold 70% of the tobacco market.
Opportunities
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can be developed using strategies of market development, product development and marketing penetration.
ITC is moving into new and emerging sectors including Information Technology, supporting business solutions.
e-Choupal is a community of practice that links rural Indian farmers using the Internet. This is an original and well thought of initiative that could be used in other sectors in many other parts of the world.
It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages.
ITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in the North, West and East of India of atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names such as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market.
This concept is tremendously difficult for competitors to emulate.
Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate into the country's premier FMCG business.
Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITC's soaps, shampoos and fragrances under their Wills brand.
Threats
The obvious threat is from competition, both domestic and international. The laws of economics dictate that if competitors see that there is a solid profit to be made in an emerging consumer
society that ultimately new products and services will be made available.
Western companies will see India as an exciting opportunity for themselves to find new market segments for their own offerings.
ITC's opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium-term.
Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future.
ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble.
A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.
PRODUCTS OF ITC LTD-
CIGARRATES:
ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake.
STATIONERY PRODUCTS:
ITC's Classmate range of stationery, created to inspire young minds is creating a buzz in classrooms with over 300 variants: Notebooks, Graph Books, Drawing Books, Practical Notebooks, Reminder Pads and more. Attractively designed, featuring jokes, general knowledge nuggets and more, Classmate notebooks are the prized possessions of school kids eager to explore their potential. Classmate even provides personalized stationery with school emblems.
AGARBATTIS AND MATCHES:
As part of ITC's business strategy of creating multiple drivers of growth in the FMCG sector, the Company commenced marketing Agarbattis (Incense Sticks) sourced from small-scale and cottage units in 2003. Mangaldeep Agarbattis are available in a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra.
As part of its strategic initiative to create multiple drivers of growth in the FMCG sector, ITC commenced marketing safety matches sourced from the small-scale sector.
The Matches business leverages the core strengths of ITC in marketing and distribution, brand building, supply chain management and paperboard & packaging to offer Indian consumers high quality safety matches.
ITC’s range of Safety matches include popular brands like i Kno, Mangaldeep, Aim, Aim Mega and Aim Metro. With differentiated product features and innovative value additions, these brands effectively address the needs of different consumer segments.
The Aim brand is the largest selling brand of Safety Matches in India.
ITC FOODS-
ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of theKitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments.
The packaged foods business is an ideal avenue to leverage ITC's proven strengths in the areas of hospitality and branded cuisine, contemporary packaging and sourcing of agricultural commodities.
ITC's world famous restaurants like the Bukhara and the Dum Pukht, nurtured by the Company's Hotels business, demonstrate that ITC has a deep understanding of the Indian palate and the expertise required to translate this knowledge into delightful dining experiences for the consumer.
ITC has stood for quality products for over 100 years to the Indian consumer and several of its brands are today internationally benchmarked for quality.
The Foods business is today represented in 4 categories in the market. These are:
Ready To Eat Foods
Staples
Confectionery
Snack Foods
Some of which are- Kitchens of India –pickles, masalas, curry pastes, ready
In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6 brands:
Let your kids dig into ITC's tasty Sunfeast biscuits. And watch the smile spread as they demolish wholesome delights like Butterscotch Cream, Orange Marie, Bourbon and Orange Cream.
Milky Magic, made with cow's milk, gives them high energy, stamina and health; while the Jagmag 'flavour bursts' of the Strawberry and Pineapple Cream biscuits melt in their mouths.
ITC's Sunfeast is a brand driven by innovative product development at ITC's state-of-the-art food technology centre in Bengaluru. Every Sunfeast product is made with utmost care, ensuring world class standards of hygiene.Sunfeast symbolises ITC's commitment to create brands that enrich the quality of life for every Indian. Because our people and our country deserve the best.
ITC in March launched it's ready-to-eat snacks 'Bingo' to mark it's entry into the Rs 2,000 crore fast-moving branded snacks market. As usual the company has backed the launch by a well designed ad campaign and the taste and variants of the product are based on extensive research on tastes of consumers . The launch of Bingo represents ITC Foods' fifth major line of foods business after Staples, Biscuits, Ready-to-Eat and Confectionery businesses. The launch represents the attempt made by the company to reduce the dependence on tobacco in it's total turnover.
LIFESTYLE RETAILING:
ITC's Lifestyle Retailing Business Division has established a nationwide retailing presence through itsWills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Clublife evening wear, fashion accessories and Essenza Di Wills - an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills - a range of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country.
PAPERBOARDS AND SPECIALITY PAPERS:
ITC's Paperboards and Specialty Papers Division is India's largest, technologically advanced and most eco-friendly, paper and paperboards business.
The business caters to a wide spectrum of packaging, graphic, communication, writing, printing and specialty paper requirements through its four world-class manufacturing units, 6 sales offices and a network of more than 50 dealers in India, along with an international trade network of 15 distributors / agents.
PERSONAL CARE PRODUCTS:
In line with ITC's aspiration to be India's premier FMCG company, recognised for its world-class quality and enduring consumer trust, ITC forayed into the Personal Care business in July 2005. In the short period since its entry, ITC has already launched an array of brands, each of which offers a unique and superior value proposition to discerning consumers.
Anchored on extensive consumer research and product development, ITC's personal care portfolio brings world-class products with clearly differentiated benefits to quality-seeking consumers.
ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel Di Wills' 'Vivel UltraPro', 'Vivel' and 'Superia' brands has received encouraging consumer response and is being progressively extended nationally.
ITC launched Fiama Di Wills, a premium range of shampoos today, following the success of Essenza Di Wills, its exclusive range of fine fragrances and super premium personal care products. Fiama Di Wills continues ITC’s tradition of bringing world class products to the Indian consumer.
Keys towards business strategies:
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 globalising environment, delivering superior and sustainable stakeholder value
VI
SI
ON
MISSI
ON
OBJEC
TIVES
GOAL
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VALU
ES
STRAT
EGIES
PROG
RAMS
Objective:
The primary focus of ITC's Social Development Initiatives is to create sustainable sources of farm and off-farm livelihoods and to improve the social infrastructure especially in areas where it impacts women and children. In pursuit of these objectives, the following goals have been set for the next five years:
Web-enable 10 million farmers through 20,000 e-Choupals in 100,000 villages.
Bring at least 50,000 hectares under soil and moisture conservation practices.
Transform at least 1,00,000 hectares of wastelands into productive and revenue-generating assets for the poor.
Create at least 10,000 women entrepreneurs with a sustainable source of supplementary incomes.
Improve the genetic stock of at least 150,000 cattle through artificial insemination practices.
Provide supplementary education support services to at least 100,000 children.
In its endeavour to preserve India's cultural and artistic heritage, ITC will also continue to ensure that its initiatives in the areas of preservation and promotion of Indian music, art and theatre are strengthened.
Goals:
Poverty: To halve by 2015 the proportion of the world’s people whose income is less than $1/day.
Hunger:
To halve by 2015 the proportion of the world’s people who suffer from hunger.
Universal Primary Education : To ensure that, by 2015, children everywhere will be able to complete a full course of primary schooling.
Gender Equality : Progress towards gender equality and the empowerment of women should be demonstrated by ensuring that girls and boys have equal access to primary and secondary education.
Environmental Sustainability: To stop the unsustainable exploitation of natural resources and to halve, by 2015 the proportion of people who are unable to reach or to afford safe drinking water.
Sustaining itc’s position as one of india’s most valuable corporations
Achieving leadership in each of the business segments within a reasonable time frame
ITC's Core Values ITC's Core Values are aimed at developing a customer-focused, high-performance organisation which creates value for all its stakeholders:
Trusteeship
As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis.
Customer Focus
We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction.
Respect For People
We are result oriented, setting high performance standards for ourselves as individuals and teams.
We will simultaneously respect and value people and uphold humanness and human dignity.
We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives.
We want individuals to dream, value differences, create and experiment in pursuit of opportunities and achieve leadership through teamwork.
Excellence
We do what is right, do it well and win. We will strive for excellence in whatever we do.
Innovation
We will constantly pursue newer and better processes, products, services and management practices.
Nation Orientation
We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in
complying with applicable laws and regulations at all levels.
STRATEGIES-
ITC’S low carbon growth strategy placed ITC in the forefront of the corporations that contribute to the goals of the national action plan on climate change.
ITC’S deep commitment to pursue a triple bottom strategy has earned it global and national recognition for the leadership it provides in responsible and sustainable business practices.
7’S MCKINSEY MODEL-
Most of us grew up learning about 'the 4Ps' of the marketing mix: product, price, place, promotion. And this model still works when the focus is on product marketing. However most developed economies have moved on, with an ever-increasing focus on service businesses, and therefore service marketing.
To better represent the challenges of service marketing, McKinsey developed a new framework for analyzing and improving organizational effectiveness, the 7S model: The 3Ss across the top of the model are described as 'Hard Ss':• Strategy: The direction and scope of the company over the long term.Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology.
Ensure that each of its businesses is world class and internationally competitive.
Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC’s various businesses
• Structure: The basic organization of the company, its departments, reporting lines, areas of expertise, and responsibility (and how they inter-relate).
• Systems:
Formal and informal procedures that govern everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems, etc).
In combination they provide another effective framework for analyzing the organization and its activities.
In a marketing-led company they can be used to explore the extent to which the company is working coherently towards a distinctive and motivating place in the mind of consumer.
BOARD OF DIRECTORS
Audit Committee
Sustainability CommitteeInvestor Service Committee
Compensation Committee Nomination Committee
Corporate Management Committee
Most of us grew up learning about 'the 4Ps' of the marketing mix: product, price, place, promotion. And this model still works when the focus is on product marketing. However most developed economies have moved on, with an ever-increasing focus on service businesses, and therefore service marketing. To better represent the challenges of service marketing, McKinsey developed a new framework for analyzing and improving organizational effectiveness, the 7S model:
The 4Ss across the bottom of the model are less tangible, more cultural in nature, and were termed 'Soft Ss' by McKinsey:
Skills:The capabilities and competencies that exist within the company. What it does best.
Eg- Ensure that the Company's record of attraction and retention of talent is superior to other companies in the comparative sample.
Enable employees to perform to their fullest potential to add value to the enterprise, nation and themselves.
Enhance the Company's employee value proposition so that ITC retains its position as an employer of choice.
Endeavour to eliminate accidents and injuries both onsite and offsite.
• Shared values:The values and beliefs of the company. Ultimately they guide employees towards 'valued' behavior.
Eg- shared values at ITC ltd for the employees and staff are- “We do what is right, do it well and win. We will strive for excellence in whatever we do.”
• Staff: The company's people resources and how they are developed, trained, and motivated.
Eg-
Management:
The Company leadership 'walking the talk' and a relentless focus on implementing the policy underlines the Company's approach to employment practices and creating a decent work environment.
The Human Resources and EHS functions of each business are the primary custodians of ITC's labour and EHS policies and employment practices, the implementation of which is reviewed periodically at the Unit and the Divisional levels.
The Corporate Human Resources and EHS functions provide specialist services to assist in the implementation and monitoring of the same. The multi-layered and multi-dimensional audit framework of the Company also helps in monitoring compliance with laid down policies and statutory regulations.
Training & Awareness:
The policy is shared with employees and potential employees through training programmes, communication sessions, the Company portal, intranet sites and pre-placement presentations. Managers from HR, EHS and Engineering departments are provided regular training for effective implementation of these policies.
Style: The leadership approach of top management and the company's overall operating approach.
Eg- The ITC board is a balanced board comprising Executive and Non-Executive Directors. The Board ensures that the Company has clear goals relating to shareholder value and its growth
In combination they provide another effective framework for analyzing the organization and its activities. In a marketing-led company they can be used to explore the extent to which the company is working coherently towards a distinctive and motivating place in the mind of consumer.
INTRODUCTION-BCG MATRIX
BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s.
According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.
THE BCG GROWTH-SHARE MATRIX
It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories:
a) Stars b) Question marks c) Cash cowsd) Dogs
It is based on the combination of market growth and market share relative to the next best competitor.
Market attractiveness & Competitive strength is also important
Limitations
Assumes market growth rate. A firm may grow the market. A “Dog” may be helping other products.High market share/Growth is not the only success factor.Linkage between market share and profitability is questionable
STARS-High growth, High market share Stars are leaders in business. They also require heavy investment, to maintain its large
market share.
It leads to large amount of cash consumption and cash generation.
BCG MATRIX
BUSINESS
GROWTH RATE
MARKET SHARE
HIGH
LOW
HIGH LOW
Attempts should be made to hold the market share otherwise the star will become a CASH COW.
CASH COWS-Low growth , High market share
They are foundation of the company and often the stars of yesterday.
They generate more cash than required. They extract the profits by investing as little cash as
possible They are located in an industry that is mature, not growing
or declining.
DOGS-Low growth, Low market share Dogs are the cash traps. Dogs do not have potential to bring in much cash. Number of dogs in the company should be minimized. Business is situated at a declining stage.
QUESTION MARKS-High growth , Low market share
Most businesses start of as question marks. They will absorb great amounts of cash if the market
share remains unchanged, (low). Why question marks? Question marks have potential to become star and
eventually cash cow but can also become a dog. Investments should be high for question marks.
Strategic management and organization structure/structure follows strategy:
Once the mission,vision,goals,objectives,strategies,values and programmes are defined for an organization.the manager has to implement and execute the chosen strategy by developing the organizational capabilities to reach the target objectives on schedule
Strategy execution on strategy implementation is an acton oriented process which aims to achieve competencies and capabilities for an effective organization
As firms grow,their structure generally changes from single to complex structure for eg-small firms are functionally structured.as they grow in size and are medium sized they lend to be divisionally structured whereas large organizations are matrix structured
There are many internal and external factors that affects the organization structure.however the basic aim of organization structure is to facilitate corporate objectives effectively and efficiently.
There are four types of organization structure and they are as follows-
The functional strategy: This is the simplest and least expensive structure.in this the activities are grouped by the business functions such as marketing,finance,hr,operations,etc.it promotes specialization and encourages perfection at a given task.quick decisions making is possible.however the big disadvantage is that it allows for top down approach and puts lot of pressure on the
top management to perform.the functional structure can be diagrammatically represented as follows:-
The divisional structure- As the small business grows it has more difficulty in managing different functions in different geographical markets.this requires a structure that controls operations,competes successfully in various locations this kind of structure is called as divisional structure.a banks divisional structure can be shown on the foll basis:
Geographic areaNorth zone,east zone,west zone and south zone
Products and servicesCorporate finance,consumer finance
As the business grows in size and diversity organizational control and evaluation becomes more difficult
The span of control becomes too large and thus increase in revenueneed not be an increase in profits
In order to define a profit center,a sbu is needed.sbu groups similar division into unique and delegates authority and responsibility for each unit to a single executive and directly reports to a ceo
This increases co-ordination and communication leading to increased profitability and overall efficiencyThe SBU structure of ITC are as follows-
Matrix structure: This is the most complex of all design as it depends on both ways ie authority and communication
Traditionally on functional and divisional organizational structure depends on suthority,responsibility, and communication with a top down approach
In a matrix structure there are dual times budgetary,authority and control.this kind of system is not prevalent in the exisiting Indian corporate sector but is very popular in USA by organizations heading new products new markets and latest technologies.
The disadvantages of this structure is that it isvery complex,costly and requires more management position.
Structure- ITC has a three-tier management structure.[MATRIX STRUCTURE OF ITC LTD]
At the top are Chairman and Board of Directors, who are responsible for the strategic supervision of ITC, its wholly owned subsidiaries and their wholly owned subsidiaries. The
ITC board is a balanced board comprising Executive and Non-Executive Directors. The Board ensures that the Company has clear goals relating to shareholder value and its growth. It sets strategic goals and seeks accountability for their fulfillment. There are four board committees, namely, the Audit Committee, the Nominations Committee, the Compensation Committee and the Investor Services Committee.
At the second level is the Corporate Management Committee, which is responsible for the strategic management of the company's businesses within Board-approved direction/framework. It comprises all the Executive Directors and three or four key senior members of management.
Third level consists of divisional CEOs of each business assisted by their own divisional management committees. Corporate Functions of the Executive Management Team includes Planning and Treasury, Accounting, Legal, Secretarial, Human Resources, Communications, Internal Audit and Information Technology.
The company’s organizational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each of them." This three-tier governance structure ensures that:
For and on behalf of the shareholders the company believes in incorporating strategic governance in its work culture so as to ensure that despite being free from involvement in the task of strategic management of the Company, it can be conducted by the Board with objectivity, thereby sharpening and ensuring accountability of management;
With mundane tasks of everyday executive management being delegated the management remains focused on issues of immediate importance;
The Executive management of the individual businesses that are free of handling strategic management responsibilities of ITC as a whole is then able to channelize their energies and time in enhancing the effectiveness and overall growth of their individual units.
Corporate Governance as defined by ITC is a systemic process by which companies are directed and controlled to enhance their wealth-generating capacity. A company employs vast sums of societal resources during this process of wealth generation. ITC is of the firm belief that the governance process being followed should ensure that these resources are used optimally to meet the aspirations of its stakeholders and society. This is further reflected in the deep commitment of the company to contribute to the ‘Triple Bottom Line’, which is the development of the nation’s economic, ecological and social resources.
The company believes in empowering the executive management. But corporate governance ensures a system of checks and balances to ensure that these powers that are bestowed upon the executive management are used in a responsible manner so as to meet shareholder and societal expectations. The core strengths of ITC's governance philosophy are trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. The practice of each of these creates the right corporate culture that fulfils the true purpose of Corporate Governance.
Overall, the structure of ITC has high complexity because of horizontal differentiation within the organization. The most
visible evidence is that of specialization and departmentation. Complexity also increases because of spatial differentiation.
The ITC Code of Conduct, as adopted by the Board of Directors, is applicable to all Directors, senior management and employees of the Company. This Code is derived from three interlinked fundamental principles, viz. good corporate governance, good corporate citizenship and exemplary personal conduct. The Code covers ITC's commitment to sustainable development, concern for occupational health, safety and environment, a gender friendly workplace, transparency and auditability, legal compliance, and the philosophy of leading by personal example. Since non-adherence to the code is brought to the attention of the immediate reporting authority, formalization is also there in ITC.
Decision-making is decentralized, as the company believes in giving executive freedom to the management to drive the enterprise forward without undue restraints but this freedom of management should be exercised within a framework of effective accountability.
LEVELS OF STRATEGIC MANAGEMENT
The strategic can be broadly divided into three levels they are as follows……
1. Corporate strategy2. Business strategy3. Functional strategy
The above three levels can be diagrametically rapresent are as follows,
Corporate
Business strategy
Functional strategy
CEO, MD
HOD
SUPERVISORS,
WORKERS,
EMPOYEES
The above levels of management is explain as follows…..
CORPORATE STRATEGY: [CEO,MD]1. It describe the companies over all direction in terms of its
general attitude towards growth and the management of its various businesses and the product line.
2. Corporate strategy refers to the principle strategy of the diversified firm.
3. It is also concerned with selection of businesses. 4. It is also called as highest level of strategy
ITC’s corporate strategies are :
a) ITC is a board-managed professional company, committed to creating enduring value for the shareholder and for the nation. It has a rich organisational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems.
b) Create multiple drivers of growth by developing a portfolio
of world class businesses that best matches organisational capability with opportunities in domestic and export markets.
c) Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology.
d) Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality.
e) Ensure that each of its businesses is world class and internationally competitive.
f) Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC’s various businesses.
g) Create distributed leadership within the organisation by nurturing talented and focused top management teams for each of the businesses.
h) Continuously strengthen and refine Corporate Governance processes and systems to catalyse the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.
Business strategy: [HOD]1. It is usually occurs at the strategic business unit level or
product levels.2. It emphasis improvement of the competitive position of a
firms product or services in a specified industry 3. Business strategy includes mktg strategy`s, H.R strategy`s,
financial strategy`s, legal strategy`s and information technology development strategies.
4. This level is based on short and medium term plan and each department functional responsibilities.
FUTURE BUSINESS STRATEGY OF ITC ARE-
No new investments in cigarrates
New ventures in agri business
Use the distribution network to reach rural areas
Tie ups and acquisitions to boost IT business
Increased exports
Cut down prices in the biscuit domain
Introduce low fat chips in respect of ITC foods
Hr strategies-
Employee training Self-managing teams Pay for performance
FUNCTIONAL STRATEGY: [SUPERVISORS,WORKERS,STAFFS]1. It relates to the functional areas such as production,
mktg, financing, personal, etc.2. The functional strategy aims at achieving functional
objectives.3. This level is also called as operation strategy level or
departmental strategy level.4. It is lowest level of strategy management. It is deal with day
to day operation level of the business.
The functional strategies of ITC are-
Marketing and efficiency in respect of-
Promotion Advertising Pricing Distribution Product design
Production and efficiency in respect of-
Economies of scale Flexible manufacturing
This strategy were encouraged by PETER DRUCKER in his theory of Management By Objectives(MBO)
Strategic management process
1) strategic management is the systematic approach to a major and increasing important responsibility of general management to position and relate the firm to its environment in a away which will assure its continue success and make it secure from surprises
2) Strategic management is a stream of decision and actions which lead to the development of an effective strategy or strategies to help achieve corporate objectives .
Thus strategic management process is the way in which strategies determine objectives and make strategy decisions
3) The strategic management process can be broadly divided into 3phases each phases consists of number of steps these phases are as follows
Phases 1) strategy formulation -
Strategy formulation can also be called as strategic planning .
A strategic formulation is done at the top management level at the top management level or at the top management level or at the co-operate level stage with the levels of strategic management .
Example- At the top are Chairman and Board of Directors, who are responsible for the strategic supervision of ITC, its wholly owned subsidiaries and their wholly owned subsidiaries.
The ITC board is a balanced board comprising Executive and Non-Executive Directors. The Board ensures that the Company has clear goals relating to shareholder value and its growth.
It sets strategic goals and seeks accountability for their fulfillment.
There are four board committees, namely, the Audit Committee, the Nominations Committee, the Compensation Committee and the Investor Services Committee.
The strategic formulation phase evolves the following steps
Step 1 framing mission and objectives
Eg-
Mission:
To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value
Objective-
Web-enable 10 million farmers through 20,000 e-Choupals in 100,000 villages.
Bring at least 50,000 hectares under soil and moisture conservation practices.
Step 2 analysis of internal environment
After setting the objective or goals the analysis of internal environment may be done the internal environment refers to the study of men power machines method procedure of the organization that is it reveals strength and weakness of the organization
The internal environment
All factors that are internal to the organization are known as the 'internal environment'. They are generally audited by applying the 'Five Ms' which are Men, Money, Machinery, Materials and Markets. The internal environment is as important for managing change as the external. As marketers we call the process of managing internal change 'internal marketing.'
Men:
ITC employs over 25,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3, 53,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations.
Money:
ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 14 billion and a turnover of over US $ 5 billion. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade).
Machinery:
ITC is using world class machinery so that they can match with demand of the market. Their most of the facilities are fully automated.
Materials:
ITC is using quality raw material so that they can give world class quality product to their customers. They are very selective while selecting supplier for them.
Markets:
Its businesses and brands are focused almost entirely on the Indian markets, and despite being most well-known for its tobacco brands such as Gold Flake, the business is now diversifying into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors
- including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery.
Step 3 analysis of external environment .
The external environment refers to study of government competition consumer technology development affecting the organization that is it reveals opportunity and threats of the organization.
Supplier: Raw materials, intermediates and the final product sourcing/distribution in widespread across the country. Few items have more than 1 supplier for the raw material e.g. filter rods can be sourced from Mumbai, Bangalore or Devas in MP.
Huge supply-demand network for cigarette business, which must operate in the cost optimal way to maximize the profits. Few segments are particular to factories e.g. Kingsize.
Consumer: Organisations survive on the basis of meeting the needs, wants and providing benefits for their customers.
Failure to do so will result in a failed business strategy. Its businesses and brands are focused almost entirely on the Indian
markets, and despite being most well-known for its tobacco brands such as Gold Flake, the business is now diversifying into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors.
The macro-environment
This includes all factors that can influence and organization, but that are out of their direct control. A company does not generally influence any laws (although it is accepted that they could lobby or be part of a trade organization). It is continuously changing, and the company needs to be flexible to adapt. There may be aggressive competition and rivalry in a market. Globalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology.
Economic Factors : Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing.
India has been one of the best performers in the world economy in recent years, but rapidly rising inflation and the complexities of running the world’s biggest democracy are proving challenging.
India’s economy has been one of the stars of global economics in recent years, growing 9.2% in 2007 and 9.6% in 2006. Growth had been supported by markets reforms, huge inflows of FDI, rising
foreign exchange reserves, both an IT and real estate boom, and a flourishing capital market.
Socio-Cultural Factors : The social and cultural influences on business vary from country to country. It is very important that such factors are considered Envisioning a larger societal purpose has always been a hallmark of ITC. Following are the factor which should be kept in mind while doing business in india:
1. India, being a multi-cultural and multi-religious society, celebrates holidays and festivals of various religions
2. India is one of the most religiously diverse nations in the world, with some of the most deeply religious societies and cultures. Religion still plays a central and definitive role in the life of most of its people.
3. The demographics of India is remarkably diverse. India's population of approximately 1.17 billion people (estimate for July, 2009) consists of approximately one-sixth of the world's population
4. India is a young country with an average age between 23-24 years.
As a corporate citizen with enduring relationships in rural India, ITC has a history of collaboration with communities and government institutions to enhance farm productivity and the rural resource base.
ITC’s commitments in agricultural R&D and knowledge sharing have spanned vital aspects of competitiveness – efficient farm practices, soil and water management.
Technology factor: Technology is vital for competitive advantage, and is a major driver of globalization. Technology in India accounts
for a substantial part of the country's GDP and export earnings while providing employment to a significant number of its tertiary sector workforce.
Technically proficient immigrants from India sought jobs in the western world from the 1950s onwards as India's education system produced more engineers than its industry could absorb.
India’s growing stature in the information age enabled it to form close ties with both the United States of America and the European Union
IT plays a very critical role in driving the ITC business strategies.
IT is an enabler of the business process to ensure business growth through efficient management of operations in the value chain.
IT creates new business process or restructure the current business process to enhance customer service availability ,efficient manufacturing / supply chain operations etc
Political factors: The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. The Indian polity is increasingly seen by political observers as the problem. When populist political appeals stir the passions of the masses, government institutions appear less capable than ever before of accommodating conflicts in a society mobilized along competing ethnic and religious lines
Budget impact: Among the FMCG stocks Marico and ITC are the biggest gainers. Marico has added 7.3% to Rs 77.
ITC has surged 7% to Rs 212, after no change in excise cuts on cigarettes
Due to Govt new conditions ITC Maurya winning the 'Best eco-friendly hotel – Special Prize' award by the Ministry of Tourism, Government of India.
Step 4 gap analysis
the management also conduct for this purpose the management must compare and analyze its present performance level and the desired future performances level
eg- Advertisement for the Aashirvaad atta was found to be ineffective and infrequent and did not attract the target customers especially housewives
Step 5 framing alternative strategy-
After framing mission objectives doing swot analysis is gap analysis the management needs to frame alternative strategies to accomplish objectives of the firm.
Eg- ITC came up with an aggressive advertisement to attract the Indian housewives as they are found to be the decision maker in the buying of Atta.
Choice of strategies = The organization cannot implement all the alternatives strategies therefore the company has to be selective in nature.
Eg-For increasing the sales of ashirwad aata the company selected the marketing strategy of advertisement through which it increased it sales
Phase 2 strategic implementation
The strategies are formulated to each and every functional development of the business that is marketing finance , hr, operations ,etc once the strategies are formulated then the next stage is implemented of such strategies the strategies involves the following steps
Step 1 formulation of plans program project
These is a need to frame plans programs and project as strategy by itself does not lead to action that is plans result in different kinds of program that is program lead to formulation of project
Eg-LOW CARBON GROWTH STRATEGY
ITC made a plan and was the only enterprise in the world of its size to have achieved and sustained three global environmental distinctions
Step2 project implementation
A project passes through various stages before the actual implementation .The various phases include conception phase, definition phase, implementation phase and clean up phase
Eg-This plan was effectively carried out as 31% of the energy consumed by ITC was from clean and renewable source such as wind power
Step3 procedural implementation
The organisation needs to the aware of the regulatory frame work of the government authorities before implementing strategies. The government (regulatory) frame work that needs to be checked out may be such as form regulations, foreign collaboration procedure foreign trade regulation etc
Eg-This strategy was implemented to contribute to the goals of national action plan on climate change
Step4 : resources allocation
It deals with the arrangement and commitment of different types of resources of various activities so as to achieve the goals of the organization
Eg-ITC’s agri-business with its deep rural linkages is well poised as a supply chain partner to create value for ITC FOODS and tobacco business
Step 5 : structural implementation
Organisation structure is the frame work to which the organization operates there can be various organisational structure for the implementation of the strategy
Eg-chairman and board of directors,corporate management committee and divisional CEO’s are responsible with the implementation of the strategies.
Step 6 :functional implementation
it deals with the implementation of functional plans and policies that is for effective implementation of strategy, strategists have to provide direction to functional manager
eg-Promotion, Advertising,Pricing
Steps 7 :behavioral implementation
It deals with issues of leadership co-operate politics, use of power personal value ,business ethics and social responsibility
ITC’s social responsibility towards society-
ITC e-Choupal won the Award for the importance of its contribution to development priorities like poverty reduction, its scale and replicability, sustainability and transparency.
The Company continues to sustain its unique position as the only company in the world to be ‘carbon positive’, ‘water positive’ and ‘solid waste recycling positive’.
Phase 3 strategic evaluation
Evaluation of strategy is that phase of strategic management process in which managers try to assure that the strategic choice is properly implemented and its meeting the objectives of the company . The strategic evaluation involves the following steps
Step 1 :setting of standards
The strategies need to establish performance target standards objectives strategy and implimentation plans standards needs to be define and the employees must accept it
Eg- The company's original business was traded in tobacco. ITC stands for Imperial Tobacco Company of India Limited. The company was into the manufacturing of cigarrates earlier.
Step 2 measurement of performance
The next step is to measure the actual performance both in quantitative terms and qualitative terms
Cigarettes accounted for 47 per cent of the company's turnover, and that in itself is responsible for 80% of its profits of ITC.
Step 3 comparison of actual performance with standards
The actual performance needs to be compared with standards to find out eviction if any
It is interesting that a business that is now so involved in branding continues to use its original name, despite the negative connection of tobacco with poor health and premature death.
Step 4 finding out deviation after comparison the manager may noticed the deviation
Although the ITC group is marketing its image as an ideal corporate citizen and a company that takes its social responsibility seriously, it still earns 80% of revenues from selling cigarettes and other tobacco related products.
Step 5 analyzing deviation = the deviations may be reported to higher authorities and the higher authorities must analyses the cause of deviation
The cause of deviation was noted to be more dependence of the company on tobacco related products for its profits so ITC has transformed itself from a leading cigarette manufacturer to an umbrella group that offers a diversified product mix to enhance its brand image and reduce dependency on tobacco related products.
Step 6 taking corrective measure after identifying the causes of eviations,the manager needs to take the corrective steps to correct the deviation
So there is an argument that ITC's move into FMCG (Fast Moving Consumer Goods)and diversify its business operations
Thus the strategic management process is the complicated complex and challenging tax which involves 19steps and that can be diagrammatically represented as follows
Recommendations:
a. According to the survey conducted and after analyzing the Price, Promotion, Place and Product of the ITC and the consumer behavior in the market the company can implement the following measure for increasing the sales and volume of their products.
b. Advertisement for the Aashirvaad atta is found to be ineffective and infrequent. So,the company can come up with an aggressive advertisement to attract the Indianhousewife as they are found to be the decision maker in the buying of Atta.
c. The company can come up the concept of forming a Retail chain of Food products across all over India as it is follows the marketing strategy of Umbrella branding.In such retail chains all the food division products can be sold at the discounted rate, as more and more products are coming under the Umbrella products likefood processing.
d. The branded atta can be exported to other countries where we are currently exporting the whole wheat.
e. The company can approach the government or distributing their products in Military canteens and can sell them to organization that provides the afternoon meals to the children as a part of mid-day meal scheme.
f. Precision analysis of products in Food Business.
g. Process optimization for product development in Food Business.
h. Impact of measures for reduction of energy consumption and consequent impact on the cost of production of goods.
CONCLUSION:
ITC promoting their brands through advertisement campaign as well as door to door promotion.
ITC is also focusing on Retailers and Wholesalers to promote their brand.
The demand of their product in very low, because people don’t know about their brands very well.
ITC knows their strength and weakness in the personal care market, so they are applying new concept to overcome their weaknesses.
ITC now offering more margins, exiting offers and long credit period to retailers and wholesalers.
