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BCG Matrix for ITC Ltd.

100 years,1 Mission

INDIA FIRST

Prof. Santanu Ray

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Structure

Act I Lights! ITC- A Background

Act II Camera! The BCG matrix

Act III Action!Learning points and

conclusions

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Act I [Lights!]

Governance structure

Strategic supervision

Strategic management

Executive management

Core values

Nation Orientation; Trusteeship; Excellence;

Customer focus; respect for people; Innovation

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Vision & Mission statements Vision: Sustain ITCs position as one of

Indias most valuable corporationsthrough world class performance,creating growing value for theIndianeconomy and theCompanys

stakeholders. Mission: To enhance the wealth

generating capability of theenterprise ina globalizing environment, deliveringsuperior and sustainable stakeholdervalue.

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Business Mixof ITC Ltd.

FMCG

CigarettesFoodsLifestyle Retailing

Greeting,Gifting & StationerySafety MatchesAgarbattis

Paperboards & PackagingPaperboards & Specialty PapersPackaging

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Business Mix (Contd)Agri - Business

Agri-Exports

e-ChoupalLeafTobacco

H

otels

Group CompaniesITCInfotech; etc.

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Business wiseSales data

Business/ Year Growth

%

Value (Rs in Crore)

2005 2004

FMCG-Cigarettes 8.4 10002.54 9230.27

FMCG-Others 85.2 563.39 304.16

Hotels 124.1 577.25 257.53

Agribusiness 4.2 1780.07 1708.77

Paper & pkg. 24.9 1565.31 1253.29

Net revenue 12.99 13349.58 11815.04

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CAGR during FY 2005-2008

Category CAGR Growth parameters

Cigarettes 10.9% Pricing power

Hotels 22.7% Inward traffic, occupancy

Paper 17.2% Capacity utilization, value

added products

Agri

business

34.3% E-choupal, choupal sagar,

FMCG-

Others

60.2% Fast track, decent share.

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Market shareof ITC Ltd.

Outstanding market leader

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

Gaining market share

Nascent businesses of PackagedFoods & Confectionery, BrandedApparel and Greeting Cards.

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Market attractiveness & Competitive

strength is also important.

A

c

t

2

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Limitations

Assumes market growth rate. A firm may

grow the market.

A Dog may behelping other products.

High market share/Growth is not the only

success factor.

Linkage between market share andprofitability is questionable.

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TheBCGMatrixfor ITC

Ltd.StarsHotels

Paperboards/

Packaging.

Agribusiness.

?

FMCG- Others

Cows

FMCG-Cigarettes

Dogs

Maybe ITCInfotech.

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Act III - Action- Learning pointsand conclusions

?- To behandled with care.

Strategic forays into emerging high growthmarkets.

E-Choupal is a transformational strategy.

Strong brand building capability will be

tested.

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Learning points (Contd)

Corporate strategy of creating multiple

drivers of growth anchored on its corecompetencies and distribution reach.

Embracing difficult and challenging corporate

strategy. (Ex: Paperboards).

EHS philosophy: Contribution to the triple

bottom line- Economic, Environment and

social capital.