BCG MATRIX OF ITC LTD.

BIBASWAN MOHANTY95A/11

ITC TIMELINE2008

2000

1990

1979

1975

1925

1910

• 1910- Incorporation of “Imperial Tobacco Company of India Limited”•1925- Setup of Packaging and Printing Business•1975- Launched its Hotels Business•1979- Entered Paperboard Business•1990- Setup the Agri Business Division•2000- Launched a line of high quality greeting cards under the brand name “Expressions”•2000- Entered the lifestyle Retailing business with the Wills Sport.•2000- Spun off ITC Infotech India Limited

ITC TIMELINE2008

2005

2001

1910•2001- Introduction of “Kitchens of India” ready-to-eat Indian gourmet dishes•2002- Launched of the brands mint-o and Candyman confectionary and Aashirvaad atta.•2002- Started marketing popular safety matches brands like iKno, Aim•2003- Foray into the marketing of Agarbattis (Mangaldeep)•2005- Introduced Essenza Di Wills, an exclusive range of the fragnances•2007- Entered the fast growing branded snacks category with Bingo !•2007- Launched the “Superia “ range of soaps and sampoos in the mass-markket.

STRATEGIC BUSINESS UNITS

ITC Ltd.

FMCG CIGARETTESInsignia, India Kings, Lucky strike, Classic, Gold Flake, Navycut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal etc

FMCG CIGARETTES Started in 1910 as company’s core Business Market leadership in all segments- geographic & price

(70% market share) Cigarettes account for only 15% of tobacco consumed

in India unlike world pattern of 85% due to prolonged punitive taxation

Of the 58% of audit Indian makes who consume tobacco, barley 15% can afford cigarettes (Biri : Cigarettes ratio = 10:1)

In 2001- lost 15% of its Business because of rise in Excise Duty

In 2007- VAT was charged at 12.5% which increased the price of cigarettes by 84ps per cigarette. Hence ITC had to shut down their Business of Plains( non Filter Cigarettes) which was 20% of total FMCG Cigarette Products

FMCG OTHERS

FMCG Others

Foods

ApparelsPersonal

Care StationarySafety

matches and Agarbattis

FOODS

Kitchen of India, Aashirvaad, Mint-o, Candyman, Bingo etc in staples, Snack Foods, Ready to Eat Foods and Confectionaries

APPAREL

Wills Lifestyle, John Players, Miss Players brands in Fashion Wardrobe for men and women

PERSONAL CARE

Fiama di Wills, Essenza di Wills, Engage, Vivel di Wills, Superia Brands in soaps, hair oil, Hair gel, face wash, shampoo, conditioner, deo and perfumes etc.

STATIONARY

Classmate, Paper kraft, Expressions, Colour Crew Brands in notebooks, Diary, office stationary, greeting cards, colours etc.

SAFETY MATCHES & AGARBATTIS

iKno, Aim in match-sticks and mangaldeep agarbattis etc

HOTELS

“Bukhara” Restaurant named as Best Indian Restaurant in the World.

HOTELS Hotel brands: ITC-WelcomGroup,

WelcomHeritage & Fortune. Totally 90 Hotels, && Destinations and 5500

Rooms under management. Destinations include most of India as well as

Singapore and Dubai Hosted a galaxy of world dignitaries like Bill

Gates to Bill Clinton, Condoleezza Rice to Benazir Bhutto.

AGRI BUSINESSAgricultural Development, Agricultural inputs, eChoupal

Innovation for India Award 2006 for ITC e-choupal in the Social Innovation category for business organisations

AGRI BUSINESS ITC Agri business is one of the world’s largest

exporter of agricultural commodities. June 2000, eChoupal- strategeic & cost

effective sourcing support to the food business(support creation of verticals in wheat, soya, corn, potato etc.)

Diverse range of goods/services- FMCG, consumer durables, agri-inputs

Farmer Financial Services-insurance(focus: weather), Credit (focus: KCC scheme)

PACKAGING AND PAPERBOARDSPackaging & Paperboards & Specialty Paper

Indian Manufacturing Excellence Gold Award 2007 & 2006 to Unit Bollaram by Frost & Sullivan

PACKAGING AND PAPERBOARDS Indian paperboard market growing at

7% p.a India has low per capita usage at

around 6Kgs p.a(world average-50 Kgs p.a

ITC’s packaging unit- largest converter to paperboard into high quality printed packaging

Provides superior packaging solutions to the cigarettes and ne FMCG business.

INFOTECHITC InfoTech Ltd.

Featured amongst Top 100 Global Outsourcing Companies in The Leaders category- International Association of

Outsourcing Professionals

INFOTECH ITC Infotech Ltd. Is a wholly owned subsidiary

of ITC Ltd. ITC Infotech is responsible for developing &

maintaining the entire ITC eChoupal infrastructure.

Although a separate entity and brand, ITC Infotech’s primary job is to keep ITC as a group upto date with latest technology

ITC LTD. BCG MATRIXSTAR•Argi business•Hotels•Paperboards & Packaging

QUESTION MARK

•FMCG- Foods

CASH COW

•FMCG- Cigarettes

DOG

•ITC Infotech

MARKET SHARE

GROWTH

PRODUCT LIFE CYCLE (PLC) The product life cycle goes through many

phases, involves many professional disciplines & requires many skills, tools and processes.

To say that a product has a life cycle is to assert 4 things:i. Product has a limited life.ii. Product pass through distinct stages, each

posing different challenges, opportunities & problems to the seller.

iii. Profit sires and fall at different stages of PLC.iv. Products require different marketing, financial,

manufacturing, purchasing & human resource strategies in each life cycle.

DIFFERENT STAGES OF PLC1. Market Introduction Stage:

No or little competition. Customers have to be promoted to try the

product. Low sales volume: The product had to instigate

the tobacco users to use cigarettes instead of hookah , cigar & beedi. It also had to induce the non smokers to try out smoking. It was the new concept so initially the sales volume was low.

GROWTH STAGES Prices to maximize market share: ITC kept a

close demand watch on the price demand patterns and increased the price in small doses. The price strategy continued as part of the penetration strategy. The ratio of promotion cost to sales declined

Competition begins to increase with a few new players in established market

Sales volume increases significantly: During 1920’s , 1930’s and the major part of 1940’s was the growth stage of scissor’s life cycle.

MATURED STAGE Scissor’s reached the maturity by the end of

1940’s.The market welcomed the new low priced

product. Increased competition offerings: Panama

emrges as a competent product posed a challenge to scissors

Costs are very low as they are well established in market and no need for publicity

Panama was slow in growth initially nut through aggressive marketing strategy and sustaineed market inputs. It started growing in early 1950’s

SATURATION AND DECLINE costs become counter optimal

Sales volume decline or stabilize

Prices, profitability diminishProfit becomes more a challenge of production/distribution efficiency than increased sale

LESSONS OF THE PLC It is clamed that every product has a life cycle. it

is launched; it grows and at some point may die. A fair comment is that at short term- not all products die. Jeans may die, but clothes probably will not

Even though its validity is questionable, it can offer a useful model for managers to keep at back of their mind. Indeed if their product is in the introductory /growth phase/ decline, it perhaps should be at the front of their mind; for predominant features of these phases may be those revolving around such life and death. Between these two extremes, it is salutary for them to have that vision of mortality in front of them.

THANK EUHH