ITC Term Paper Review

8/3/2019 ITC Term Paper Review

1/18

INDUSTRIAL AND PRODUCTION ENGINEERING

SRI JAYACHAMARAJENDRA COLLEGE OF

ENGINEERING

MYSORE 570 006

TOPIC: USM AND ECM TOOLS

SUBMITTED TO: G.K. SWAPNA MAM

BYNAME:ASHWIN B.G

USN NO: 4JC09IP008

DEPARTMENT: INDUSTRIAL AND PRODUCTION

ENGINEERING


2/18



3/18


Contents

AbstractINDEX................................................................................................................................................................ 4

1. INTRODUCTION .............................................................................................................................. 4

2. OBJECTIVE ....................................................................................................................................... 4

3. METHOLOGY-................................................................................................................................ 10

Vision ................................................................................................................................................ 10

Mission.............................................................................................................................................. 10

................................................................................................................................................................ 4

4. VISION ............................................................................................................................................... 4

5. MISSION ............................................................................................................................................ 4

6. ITC BUSSINES MODEL ................................................................................................................... 4

7. STRATEG OF ITC ............................................................................................................................. 4

8. PRODUCT AND GROWTH.............................................................................................................. 4

9. MARKET SHARE.............................................................................................................................. 4

10. REVIEW OF LITERATURE ........................................................................................................... 4

11. REFERANCE ................................................................................................................................... 4

Introduction:- .......................................................................................................................................... 6

OBJECTIVE:- ....................................................................................................................................... 10

To enhance the wealth generating capability of the enterprise in a globalizing environment,

delivering superior and sustainable stakeholder value ...................................................................... 10

ITC Business Model ............................................................................................................................. 10

World ITC 2009 Market Share And ForecastEMEA Weak, Double Dip Coming ....................... 14


4/18


INDEX:-

1. INTRODUCTION

2. OBJECTIVE

3. METHOLOGY

4. VISION

5. MISSION

6. ITC BUSSINES MODEL

7. STRATEG OF ITC

8. PRODUCT AND GROWTH

9. MARKET SHARE

10. REVIEW OF LITERATURE11. REFERANCE


5/18


Abstract

Key words: Organized Retailing and Kirana Shops

India's retail sector is going to transform and with a three-year compounded annual growth

rate of46.64 per cent, retail sector is the fastest growing sector in the Indian economy.

Traditional markets are transforming themselves in new formats such as departmental stores,

hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing

in metros and near metro cities, introducing the Indian consumer to a new shopping

experience.KSA-Technopak, a retail consulting and research agency, predicts that by

2010,organized retailingin India will cross the US$ 21.5-billion mark from the current size of

US$ 7.5 billion.The Indian retail market is of enormous size about US$ 350 billion. But

organized retail is not so huge and it is at only US$ 8 billion. However, the opportunity forgrowth is hugeby 2010,organized retail is expected to grow to US$ 22 billion. With the

growth of organized retailing estimated at 40 per cent over the next few years, Indian

retailing is clearly at a tipping point.This article is an attempt to analyse the areas where retail

sector is growing and will grow, what willbe the target market segment for the retailers and

how will they try to serve this segment.


6/18


Introduction:-1ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of

India Limited. 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.ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company

of India Limited. As the Company's ownership progressively Indianite, the name of the

Company was changed from Imperial Tobacco Company of India Limited to India Tobacco

Company Limited in 1970 and then toI.T.C. Limited in 1974.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 is one of India's foremost private sector companies with a market capitalization

of nearly US $ 8 billion and a turnover of over US $ 4.75 billion. ITC also ranks among

India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance

and published by the Economic Times.

ITC employs over 22,000 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, 74,000 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 and for the Shareholder."


7/18


History and Evolution:-

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of

IndiaLimited. As the Company's ownership progressively Indianised, the name of the

Company waschangedfrom Imperial Tobacco Company of India Limited to India Tobacco

CompanyLimited in 1970and then toI.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

Companys name were removed effective September 18, 2001.The Company now stands

rechristened'ITC Limited'.

The Companys beginnings were humble. A leased office on Radha Bazar Lane, Kolkata,

wasthe 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. NehruRoad) Kolkata, for the sum of Rs 310,000. This decision of the Company was

historic in moreways 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 twoyears 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 growthand consolidation of theCigarettes and Leaf Tobacco businesses, the Seventies witnessed

thebeginnings of a corporate transformation that would usher in momentous changes in

the life of the Company.ITC'sPackaging & Printing Businesswas 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 itsHotels businesswith the acquisition of a

hotel in Chennaiwhich was rechristened'ITC-Welcomegroup Hotel Chola'.

The objective of ITC's entry into thehotels business was rooted in the concept of creating

value for the nation. ITC chose the hotelsbusiness for its potential to earn high levels of

foreign exchange, create tourism infrastructureand generate large scale direct and indirect

employment. Since then ITC's Hotels business hasgrown to occupy a position of leadership,

with over 100 owned and managed properties spreadacross India.In 1979, ITC entered

thePaperboards businessby promoting ITC Bhadrachalam Paperboards Limited, which today has


8/18


become the market leader in India. Bhadrachalam Paperboard small gemmated with the

Company effective March 13, 2002 and became a Division of theCompany, Bhadrachalam

Paperboards Division. In November 2002, this division merged withthe Company's Tribeni

Tissues Division to form the Paperboards & Specialty Papers Division.ITC's paperboards'technology, productivity, quality and manufacturing processes arecomparable to the best in

the world. It has also made an immense contribution to thedevelopment of Sarapaka, an

economically backward area in the state of Andhra Pradesh. It isdirectly 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 variousindependent shareholders in Nepal. In August 2002,

Surya Tobacco became a subsidiary of ITCLimited and its name was changed toSurya Nepal

Private Limited(Surya Nepal).In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper

manufacturing company and amajor supplier of tissue paper to the cigarette industry. The

merged entity was named the TribeniTissues Division (TTD). To harness strategic and

operational synergies, TTD was merged withthe Bhadrachalam Paperboards Division to form

thePaperboards &Specialty Papers Divisionin November 2002.Also in 1990, leveraging its agri-

sourcing competency, ITC set up theAgri Business Division for export of agri-commodities. The

Division is today one of India's largest exporters. ITC'sunique and now widely acknowledged

e-Choupal initiative began in 2000 with soya farmers inMadhya Pradesh. Now it extends to

10 states covering over 4 million farmers. ITC's first ruralmall, christened 'Choupal Saagar'

was inaugurated in August 2004 at Sehore. On the rural retailfront, 24 'Choupal Saagars' are

now operational in the 3 states of Madhya Pradesh, Maharashtraand Uttar Pradesh.In 2000,

ITC forayed into the Greeting, Gifting and Stationery products business with the launchof

Expressions range of greeting cards. A line of premium range of notebooks under

brandPaperkraftwas launched in 2002. To augment its offering and to reach a wider

studentpopulation, the popular range of notebooks was launched under brandClassmate in

2003.

Classmateover the years has grown to becomeIndias largest notebook brandand has alsoincreased

its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw thelaunch of

Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the Classmatebrand.


9/18


In 2008, ITC repositioned the business as the Education and StationeryProducts Business and

launchedIndia's first environment friendly premium business paperunder

thePaperkraft Brand.Paperkraft offers a diverse portfolio in the premiumexecutive stationery

and office consumables segment. Paperkraft entered new categories in theoffice consumablesegment with the launch of Textliners, Permanent Ink Markers and WhiteBoard Markers in

2009.ITC also entered the Lifestyle Retailing business with theWillsSportrange of

internationalquality relaxed wear for men and women in 2000. The Wills Lifestyle chain of

exclusive storeslater expanded its range to includeWills Classic formal wear(2002)

andWillsClublifeevening wear(2003). ITC also initiated a foray into the popular segment with its

men's wear brand,John Playersin 2002. In 2006, Wills Lifestyle became title partner of the

country's mostpremier fashion event -Wills Lifestyle India Fashion Week - that has gained

recognition frombuyers and retailers as the single largest B-2-B platform for the Fashion

Design industry. Tomark the occasion, ITC launched a special 'Celebration Series', taking the

event forward toconsumers.


10/18


OBJECTIVE:-

The objective of the paper is to analyze the various strategies of ITC and understand how

these strategies are offering the company a competitive, sustainable development even on

account of intense competition.

METHODOLOGY:-

The research is done using secondary data. The secondary sources include Internet, Magazines, and

Books.

Vision

Sustain ITC's position as one ofIndias most valuable corporationsthrough world class

performance,creating growing value for the Indian economy and the Companysstakeholders.

Mission

To enhance the wealth generating capability of the enterprise in a globalizing

environment,delivering superior and sustainablestakeholder value

ITC Business Model

2 ITC crossed significant milestones both in the range of FMCG products launched as

well as the breadth of distribution. Investment in people systems, trade marketing expertise

and product development enabled the launch and national rollout of several FMCG products

spanning Apparel, Packaged Foods, Greeting Cards and Stationery, Safety Matches and

Incense Sticks (Agarbatti). The business model in each of these product categories envisages

retaining core competency-based elements of each value chain in-house. Manufacturing is

outsourced largely to small and medium enterprises (SMEs). Such a model enables ITC to

participate effectively in strengthening the capability of these SMEs, thereby enhancing the

competitiveness of the entire value chain. ITC is engaged in further expanding its distribution


11/18


and delivery bandwidth to serve as a springboard to cater to a much wider range of FMCG

products.

ITC is developing its internationally competitive agricultural business by

empowering, not eliminating, the independent small farmer. Its business model centers

around the deployment of a network of Internet-connected kiosks, known as e-Chou pals,

throughout agricultural areas in India. The premise of ITC's expanded business model is

backward integration, a form of virtual vertical integration that involves the direct purchase

of produce from farmers, thereby reducing ITC's dependence on middlemen.

ITCs Corporate Strategies

Create multiple drivers of growth by developing a portfolio of world classbusinesses that best matches organizational capability with opportunities indomestic

and export markets.

Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards &Packaging, Agri Business and Information Technology.

Benchmark the health of each business comprehensively across the criteria of MarketStanding, Profitability and Internal Vitality.

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 are various

businesses.

Create distributed leadership within the organization by nurturing talented andfocused top management teams for each of the businesses.

Continuously strengthen and refine Corporate Governance processes and systems to

catalyze the entrepreneurial energies of management by striking the golden balancebetween executive freedom and the need for effective control and accountability.


12/18


PRODUCT OF ITC:-


13/18


ITC introduces each product with a strategy. The following gives details of

the strategy that ITC had kept in mind, while launching the product.

1.Though the first six decades of the Company's existence were primarily devoted to the growthand 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.

2.ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration forITC's Cigarettes business. It is today India's most sophisticated packaging house.

3.In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennaiwhich 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 90 owned

and managed properties spread across India.

4.In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam PaperboardsLimited, 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 Tribune 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. 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.


14/18


5.Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division forexport of agri-commodities. The Division is today one of India's largest exporters. ITC's unique

and now widely acknowledged e-Chou pal 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 'Chou pal Sager' was inaugurated in August 2004 at Shore. On the rural retail front.

6.24 'Chou pal Sagas' are now operational in the 3 states of Madhya Pradesh, Maharashtra andUttar Pradesh.

World ITC 2009 Market Share And ForecastEMEA Weak, DoubleDip Coming

IT Candor 2009 Market Share And Forecast Highlights

The Credit Crunch led to an unprecedented fall in ITC spending beginning in Q4 2008 A fall in microprocessor sales preceded the overall market declinesomething important to

remember for next time Many vendors experienced their strongest ever quarterly revenues in Q4 2009

A number of vendors grow their revenues by more than 30% in Q4 2009 Asia Pacific has performed worst of the regions during the recession EMEA business, although shallower in 2009, has shown no real signs of improvement in Q3

or Q4 2009 ITCandor predicts a double dip, or W-shaped forecast for ITC revenues in 2010 Samsung led the $1.1T ITC hardware market in 2009 with a 8.3% share IBM led the $1.4T IT Service market in 2009 with a 4.1% share

DISTRIBUTION NETWORK IN INDIA
http://martinhingley.wordpress.com/2010/03/02/itc-forecast-q110/http://martinhingley.wordpress.com/2010/03/02/itc-forecast-q110/http://martinhingley.wordpress.com/2010/03/02/itc-forecast-q110/http://martinhingley.wordpress.com/2010/03/02/itc-forecast-q110/http://martinhingley.wordpress.com/2010/03/02/itc-forecast-q110/http://martinhingley.wordpress.com/2010/03/02/itc-forecast-q110/


15/18


REVIEW OF LITERATURE

ITC in talks to buy RDB's cigarette biz

Jump to full article: The Economic Times (India), 2010-08-12

Intro:

Cigarette-to-hospitality major ITC may buy the de-merged cigarette division of Kolkata-based RDBIndustries in a deal worth Rs 300-350 crore, according to sources close to the development.

"ITC is in talks with RDB for buying the recently de-merged cigarette division. This is the second

attempt made by ITC to buy the loss-making division of RDB. Earlier in 2006-07, ITC quoted Rs
http://www.tobacco.org/news/306410.htmlhttp://economictimes.indiatimes.com/Tobacco/articleshow/6298764.cmshttp://economictimes.indiatimes.com/Tobacco/articleshow/6298764.cmshttp://www.tobacco.org/news/306410.html


16/18


250 crore for the brands and plant which was rejected by RDB management," a source close to thedevelopment told media.

"This time ITC has hiked the offer to Rs 300-350 crore and the talks are in advanced stage," the

source said

2.ITC: It's tobacco smoke all the way

Going at full tilt

Jump to full article: equitymaster.com (in), 2010-08-06Author: Luke Verghese

Intro:

Admirably enough, the shareholders of ITC Ltd. have prospered under Yogi Deveshwar's

stewardship as the great helmsman of the company for the last 14 years. In 1996 the company hadclocked a gross turnover of Rs 52 bn, an after tax profit of Rs 2.6 bn and a market capitalization ofRs 55.7 bn. In FY10, it had ratcheted up figures of Rs 260 bn, Rs 40 bn, and a market capitalizationin excess of Rs 1 trillion. That is no mean achievement. And the company is ringing in its centenaryyear in style - a record percentage dividend payment, and a record dividend payout, and a 1:1 bonusto boot. The dividend outflow will however more than eat away every dime that it earned as bookprofits during the year and then some more. Coming to think of it, ITC must be the only publiclylisted MNC (in a manner of speaking) of such vintage, which is getting more and more vibrant by theyear.

Tobacco is its savior . . .

The company's bellwether tobacco business will continue to be its mainstay biz in the foreseeablefuture. There is simply no magic wand which will help it get out of the quagmire. It should alsothank its stars that the tobacco industry's bte noir, Dr. AmbumaniRamadoss, is in limbo, and cantherefore do little harm, at least till the next general elections, that is.

3.Foods farm lift ITC net 22% to Rs 1,070 cr

Jump to full article: The Economic Times (India), 2010-07-23

Intro:

Tobacco-to-hotels major ITC on Thursday reported a 21.8% year-on-year growth in net profit for thefirst-quarter (Q1) ended June 30, 2010, to Rs 1,070.3 crore against Rs 878.7 crore in the year-agoperiod. Net sales during the period under review, however, reported a 16.1% y-o-y growth at Rs4,816.6 crore against Rs 4,147.6 crore in the corresponding period previous year, driven by robustperformance of its foods, personal care, agri and cigarette businesses.

In a statement issued after the board meeting, ITC said pre-tax profits during the said period was up19.2% to Rs 1,570.1 crore, operating profits from non-cigarette businesses was up 38% to Rs 265
http://www.tobacco.org/news/306226.htmlhttp://www.equitymaster.com/outsideview/detail.asp?date=8/6/2010&story=1http://www.tobacco.org/news/305145.htmlhttp://www.tobacco.org/news/305145.htmlhttp://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/Foods-farm-lift-ITC-net-22-to-Rs-1070-cr/articleshow/6203120.cmshttp://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/Foods-farm-lift-ITC-net-22-to-Rs-1070-cr/articleshow/6203120.cmshttp://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/Foods-farm-lift-ITC-net-22-to-Rs-1070-cr/articleshow/6203120.cmshttp://www.tobacco.org/news/305145.htmlhttp://www.equitymaster.com/outsideview/detail.asp?date=8/6/2010&story=1http://www.tobacco.org/news/306226.html


17/18


crore in the quarter under review compared with Rs 192 crore in the earlier corresponding period.Earnings per share for the quarter stood at Rs 2.80. Though, severe taxation and regulatoryenvironment for cigarettes in India continues to be a cause for concern, innovation and consumercentricity enabled the business to deliver superior value through its brand portfolio of well-craftedblends, contemporary packaging styles and use of state-of-the-art manufacturing technology .

4.Catch-22 situation for ITC

Jump to full article: DNA India (in), 2010-07-23Author: Vivek Kaul

Intro:

Not many companies have the luxury of being a monopoly in a sector in which most direct forms ofadvertising are banned. ITC is one such company. It has a near monopoly when it comes to sellingcigarettes in India. And, that to an extent, it has the pricing power that has over the years ensured thatit keeps growing at a steady pace quarter on quarter

For the quarter ending June 30, 2010, the net profit of ITC went up by 21.8% to Rs 1,070.3 crore.This increase in profit was on the back of the operating profits (or the earnings before interest andtaxes) of the cigarette business going up by 16% to Rs 1,305 crore. The operating profits of otherdivisions like hotels, paper

BIBELOGRAPHY:-

http://www.itcportal.com
http://www.tobacco.org/news/305144.htmlhttp://www.tobacco.org/news/305144.htmlhttp://www.tobacco.org/news/305144.htmlhttp://www.dnaindia.com/money/column_catch-22-situation-for-itc_1413336http://www.dnaindia.com/money/column_catch-22-situation-for-itc_1413336http://www.dnaindia.com/money/column_catch-22-situation-for-itc_1413336http://www.tobacco.org/news/305144.html


18/18


http://www.itc .com

http://www.times of india .com

http://www.wikepedia.com

http://www.economic times.com

http;//www.itc.india.com
http://www.itc/http://www.times/http://www.wikepedia.com/http://www.economic/http://www.economic/http://www.wikepedia.com/http://www.times/http://www.itc/

Date post:	07-Apr-2018
Category:	Documents
Upload:	ashwin-ash
View:	216 times
Download:	0 times

ITC Term Paper Review

Documents