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How ITC influenced the behavior of Indian Consumers.
Presented to :Arvind Arora
Presented by:Sandeep
INTRODUCTION• ITC Limited which previously stood for ‘Imperial Tobacco Company
one of India's foremost private sector companies.• Transform itself from a leading Cigarette manufacturer to an umbrella
group which offers diversified products.• Forayed into field of FMCG, IT, Agri- business to obtain different
revenue stream.• Successful in Hotel Business(ITC welcome group) and collaborated
with Sheraton Corporation.• ITC's wholly owned Information Technology subsidiary, ITC InfoTech
India Limited, is pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing.
• ITC's Agri-Business is one of India's largest exporters of agricultural products.
• 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 globalizing environment, delivering superior and sustainable stakeholder value.
VISION & MISSION
NEED FOR DIVERVICATION• Core business of ITC is in the manufacture of cigarettes and
tobacco.• On domestic front, it realized that there was huge revenue
potential for a launch of wider product range to the Indian consumer base.
• ITC’s FMCG business has one of largest retail networks in the country(2 million retailers)
• Government ban on advertisements of cigarettes, high tax rates, decline for the demand of cigarettes.
• The company felt the to diversify from the early 1970 and started entering those business that provides good ROI and a potential for future expansion.
• Leads to concentrate to the other business opportunities.
Hotel
Cigaretes
Incense Sticks
Personal Care
Safety Matches
Agricultu-ral IndustryInformation Technology
Paper boards
Packaged Foods
Stationery
Branded Apparel
DIVERSIFICATION OF ITC
Diversification Strategy
Cigarettes :• Focus to deliver highest product quality and value to consumers helps
them to lead in cigarettes industry.• To boost sales growth introduce festivals packs of brands like: flake
filter, bristol filter, berkeley filter and Scissor filter.
Branded food business(2001):• Launch kitchen of India(Canned foods from ITC Bukhara
restaurants).• Brand offers ready to serve products.• Introduced Aashirwad brand of wheat(atta) in 2002.• Entered into biscuit market by launching Sunfeast brand in 2003.
Stationery products:• Launch greeting cards under the brand name Expressions.• Gain popularity due to introduction of cards in different
languages.
Safety matches • Increase market share and its sales by offering unique designs
and value added features such as AIM.
Hotels(1975)• Four brands- ITC Welcome group, Welcome hotels,
Fortune hotels, Welcome heritage
SWOT AnalysisStrength
•Cigarette market is 22,000 cr and ITC has lion’s share in it•Strong brand recognition and product portfolio •Distribution network•Management
Weakness
•Dependence on tobacco revenues• Negative Connection of Tobacco
Opportunity•Low per capita consumptionOf personal care products
•Rural Market
•E-Choupal
Threat•Competition both Domestic & International
•Increasing Tax on cigarettes
•Regulatory restrictions on cigarettes
•Ban on smoking
• Terror attacks
Porters 5 forces
Low bargaining power of customer
High bargainng power of supplier
High threats of new entrants High rivalry
Low substitutes due to strict laws
In case of tobacco industry
Market share of ITC Ltd.
Outstanding market leader
• Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports.
Gaining market share
• Nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.
Source: Annual Accounts/Equity research
Corporate Social Responsibility
• ITC's businesses generate livelihoods for over 5 million people.
• ITC's globally recognised e-Choupal initiative is the world's largest rural digital infrastructure benefiting over 4 million farming families.
• ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an estimated 35 million person days of employment among the disadvantaged.
• ITC's Watershed Development Initiative brings precious water to nearly 35,000 hectares of dry lands and moisture-stressed areas.
• ITC's Sustainable Community Development initiatives include women empowerment, primary education.
Issues with ITC
• Advertisement ban 2003• Decrease in sales of Cigarettes• Luxury tax• Regulatory laws• Health awareness
THANK YOU
ITC. Touching your life. Everyday