STRATEGIC MANAGEMENT

STUDY OF STRATEGIC MANAGEMENT IN ITC

Submitted to: Submitted By:

Mr. Vijesh Jain Group 1

Abhey Chowdhary

Anjali Kothari

Anushree Jain

Gourav Jain

Palak Arya

Priya (Bansal)

Shruti Kohli

Date: 15 th April 2009

COMPANY BACKGROUND:-

COMPANY PROFILE:--ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 19 billion and a turnover of over US $ 5.1 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 Business World 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. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. 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 3,72,000 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."

They have an abiding commitment to world-class quality. Their deep market insight; cutting-edge technology; a pervasive culture of innovation has made them create a mark in the industry. The ITC Brand has made India proud through its several products and services.

BRIEF HISTORY: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. 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. The Company's ownership progressively Indianised, and the name of the Company was changed 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-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective

September 18, 2001. The Company now stands rechristened 'ITC Limited'.

VISION STATEMENT:

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 STATEMENT:

To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable

stakeholder value

CORE PRINCIPLES:

ITC's Corporate Governance initiative is based on two core principles. These are :

Management must have the executive freedom to drive the enterprise forward without undue restraints; and

This freedom of management should be exercised within a framework of effective accountability.

ITC's EHS Policy

ITC’s mission is to sustain and enhance the wealth-generating capacity of its portfolio of businesses in a progressively globalizing environment. As one of India’s premier corporations employing a vast quantum of societal resources, ITC seeks to fulfill a larger role by enlarging its contribution to the society of which it is a part. The trusteeship role related to social and environmental resources, aligned to the pursuit of economic objectives, is the cornerstone of ITC’s Environment, Health and Safety philosophy. ITC’s EHS philosophy cognizes for the twin needs of conservation and creation of productive resources.

In the multi-business context of ITC, Corporate Strategies are designed to create enduring value for the nation and the shareholder, through leadership in each business and the attainment of world-class competitive capabilities across the value chain. The objective of leadership extends to all facets of business operations including Environment, Health and Safety.

PRODUCTS:--

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GOALS at the Enterprise Level:

1. Sustaining ITC’s position as one of India’s most valuable corporations.

2. Achieving leadership in each of the business segments within a reasonable time frame.

3. Achieving a Return On Capital Employed (ROCE) in excess of the Company’s cost of capital, at all times.

CORPORATE STRATEGIES:

Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities

Pursue World class competitiveness in all businesses and across the entire value chain

Best-in-class in terms of:

Internal Vitality

Market Standing

Profitability

Strategy of Organization and Governance processes geared to manage multiple businesses

Blend core competencies and leverage ITC umbrella strengths to create new avenues of growth

Corporate philanthropy :ITC Echoupal creatively leverages information technology to set up a meta-market in favor of India's small and poor farmers, who would otherwise continue to operate and transact in 'un-evolved' markets.

As of July 2007, ITC Echoupal services, through 6400 Echoupal across 8 states, reach more than 4 million farmers in about 40,000 villages. ITC intends scaling up the initiative with 20,000 choupals and 700 saagars to reach 10 million farmers in 100,000 villages by 2010.

Free access to Internet is also opening windows of rural India to the world at large. ITC eChoupal is now being regarded as a reliable delivery mechanism for resource development initiatives. Its potential is being tested through pilot projects in healthcare, educational services, water management and cattle health management with the help of several service providers including non-governmental organizations.

ITC’s strategic intent is to create multiple drivers of business growth by leveraging its diverse competencies in agri sourcing, world-class manufacturing, branding, packaging, hospitality, trade marketing and distribution.

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

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.

2. 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.

3. 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 co ncept 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 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.

5. 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.

6. 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.

7. In 2000, ITC launched a line of high quality greeting cards under the brand name 'Expressions'. In 2002, the product range was enlarged with the introduction of Gift

wrappers, Autograph books and Slam books. In the same year, ITC also launched 'Expressions Matrubhasha', a vernacular range of greeting cards in eight languages and 'Expressions Paperkraft', a range of premium stationery products. In 2003, the company rolled out 'Classmate', a range of notebooks in the school stationery segment. This way it

established itself as a brand for students and is performing excellently due to its quality and price strategy.

8. 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) and Wills 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 2007, the Company introduced 'Miss Players'- a fashion brand in the popular segment for the young woman.

9. 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.

10. 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-o and 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 just seven 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.

11. 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.

12. 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 Business Model

1. During 2002-03, 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 and delivery bandwidth to

serve as a springboard to cater to a much wider range of FMCG products.

2. In a country where 200 million people are engaged in farming or related activities, 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-Choupals, throughout agricultural areas in India. An e-Choupal is a high-tech version of the traditional "choupal," or "village

gathering place" in Hindi, where farmers are provided with the latest weather reports, local and international produce prices, and farming best practices. Costing US$ 3,000 - 6,000 each to set up, they also serve as procurement and purchase points, allowing farmers not only to sell their produce to ITC, but also to buy agricultural inputs and consumer goods for daily household use. 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. The e-Choupal network, by deploying IT innovatively, reorganizes the roles of these intermediaries by leveraging their strengths in physical transmission of goods; yet disinter mediating them in the flow of information along the chain. In the process several non-value-adding activities in the traditional farm to factory leg of the value chain, such as redundant transportation, bagging, handling and labor, are eliminated.This reorganization of the role of middlemen results in lower procurement costs for ITC, despite having to pay higher prices to the farmers. Transaction costs are also minimized for the farmer by buying output at the farmers' doorstep, and through transparent pricing and weighing practices. On the marketing front, ITC is able to maintain and grow the trust of its farmers by enhancing their productivity and wealth. ITC leverages this position of trust among farmers, as well as its distribution capabilities, to market its own consumer good brands and those of partner companies offering products and services that ITC does not. Sales of consumer goods through the e-Choupals have been particularly successful because the cost-savings associated with dealing directly with the

manufacturer allow Sanchalaks to offer goods at lower prices than other village-level traders or retailers can afford to do.

INTERNAL ANALYSIS:

Boston Consulting Growth Matrix [BCG]

The BCG matrix (aka B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix, Boston Consulting Group analysis) is a chart that had been created by Bruce Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.

ANALYSIS:

Stars

• Hotels• Paperboards/

Packaging.• Agri business.

?

• FMCG- Others• ITC Infotech

Cows

• FMCG-Cigarettes

Dogs

ITC`s cigarette business:

Market leadership Powerful brands across segments Leadership in all segments - geographic & price Extensive FMCG distribution network

Direct servicing of 1,00,000 markets & 2 million retail outlets World-class state-of-the-art technology and products

Investment - Rs.10 billion in six years Exciting long term growth potential

Growth Potential:

Cigarettes account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation

Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector

Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes

Biri : Cigarettes ratio = 10 : 1 Annual per capita adult cigarette consumption in India is appx. one tenth world

average : 141 Future growth depends on relative rates of growth of per capita income and

moderation in taxes

ITC`s Paperboard Industries:

Market leader in growth segment - value added coated boards World-class contemporary technology

• Elemental Chlorine Free (ECF) Pulp Mill fully operational – only one of its kind in India meeting world-class environmental standards

Internationally competitive quality and cost Social farm forestry in mill command area to improve access to cost effective

fibre & to attain self-sufficiency

• Biotech research based high yielding Clones – effectiveness tested in nearly 68,000 hectares

Fully integrated operations with in-house pulping capacity at appx. 1.10 lac MT • Expansion programme underway; source of sustainable competitive

advantage

ITC`s Agri commodity Business:

Farm linkages in 14 states covering Soya, Wheat, Rice, Marine products, Coffee etc.

Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e-

Choupal’ initiative Rural India’s largest Internet-based intervention Over 38000 villages linked through around 6400 e-Choupals servicing over

3.5 million farmers Distinctive sourcing capability for ITC’s Foods business

ITC`s Hotel Business:

ITC-Welcomgroup : a leading hotel chain in India• Strategy to establish presence in key business locations to complete the

chain achieved in end 2004• Over 5200 rooms under 4 distinct brands

CATEGORY BRAND POSITIONING

Luxury ITC Hotel: Luxury Collection

“Mansions of Luxury”

Upper Scale Welcome Hotel: “Passion for Quality”

Sheraton

Upper- mid- scale Fortune Hotels “Promise of True Value”

Heritage Welcome Heritage “Unique Experiences”

Capacity expansion underway at Bangalore and Chennai; plans for other locations also being progressed

Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income @ 45%) amongst the 3 leading chains

Leverages unique service proposition and international alliance with Starwood Hotels & Resorts

• ‘Luxury Collection’ / ‘Sheraton’

SWOT Analysis----ITC.

ITC is one of India's biggest and best-known private sector companies. In fact it is one of the World's most high profile consumer operations. 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. Examples of its successful new FMCG products include:

•Aashirvaad - India's most popular atta brand with over 50% market share. It is also present in spices and instant mixes.

•Mint-o - Mint-0 Fresh is the largest cough lozenge brand in India.

•Bingo! - a new introduction of finger snacks.

•Kitchens of India - pre-prepared foods designed by ITC's master chefs.

•Sunfeast - is ITC's biscuit brand (and the sub-brand is also used on some pasta products).

STRENGTHS

Well known brand name Respected company Good distribution network

and skills Good product quality(business

has been awarded with ISO 9001:2000 by Det

Norske Veritas.) Diversified company trading

in a number of business sectors

New Brands for New segements.

WEAKNESSES

Still people connect ITC with a tobacco brand which is related with poor health and premature death.

Still the company is dependent on tobacco for its revenue generation.

OPPORTUNITIES

New product discoveries

ITC is moving into new and emerging sectors including Information Technology, supporting business solutions

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. e-Choupal- project that has a goal of reaching 10 million farmers in 100,000 villages.

S-O strategies

Adding innovative products to the existing product line (new designs and look of products)

Further Diversification in this business

W-O strategies

Making use of distribution channels to provide the products as and when need arises

Providing offers with products

More investment in advertising and promotional activities

THREATS

Changing customer needs and preferences

Threats from rival firms- domestic and international.

Western companies see India as an exciting opportunity

S-T strategies

Producing quality product using core competencies

Working out measures to over take the rival company products, in this case of HUL.

W-T strategies

targeting government offices in rural areas.

PORTER’S FIVE FORCES- FMCG SECTOR OF ITC

PORTER’S FIVE

FORCES:

BUYER POWER:- HIGH- UNFAVOURABLE.

*Low switching cost *Buyers are numerous and

fragmented*Considering buyer power retailers , they are able to

negotiate the price with the company.

SUPPLIER POWER:-LOW-FAVOURABLE

*Large number of suppliers in the country

*Cost of switching suppliers is low

*Prices of substitutes are low

THREAT OF NEW ENTRANTS:-HIGH- UNFAVOURABLE*To many small

firms*No dominating

firm*Little product differentiation

*Customer switching costs

are low

DEGREE OF RIVALRY:-HIGH-

MODERATELY UNFAVOURABLE*Consumer in this

category enjoy multitude of

choices.*It does not cost

anything for a consumer to buy

one brand of shampoo instead of another, making the

industry quite competitive.

THREAT OF SUBSTITUTES :-

HIGH- MODERATELY

UNFAVORABLENumerous

substitutes are available

DID YOU KNOW???????

The following are some articles that we have picked up from the Economic Times which makes the strategic decisions of ITC even more clear.

ITC up on ahead of quarterly numbers (19 Jan 2009, 1335 hrs IST, ET Bureau)

MUMBAI: Shares of FMCG major ITC Ltd were trading 0.7% higher at Rs 173.50 on expectations of appreciable quarterly numbers.

Analysts are expecting ITC to register a top line growth (YoY) in the range of 18 to 20% for the quarter ended Dec. 31, 2008. PAT (net profit) is expected to rise in the range of 10% and 14% during the considered quarter.

Hotels business is expected to report decline in sales. FMCG losses are likely to decline, as the company benefits from the decline in palm oil price, a key ingredient in toilet soaps. Paper and paperboard division will gain from stabilization of the pulp facility although increase in input costs in previous quarters will limit gains.

"Operating margins will still be under pressure for ITC. The company is expected to be under pressure as a result of losses arising out of non-FMCG businesses. We maintain a

ITC looking for acquisition of hotels (11 Dec 2008, 1639 hrs IST, PTI)

With the global downturn throwing up opportunities to take over valuable assets at attractive price, diversified conglomerate ITC

Limited on Thursday said it is considering acquisitions, mainly in the hospitality sector.

"We are looking for operations to buy assets, particularly in hotel area. We will buy where asset prices are feasible and we are looking at all categories ranging from three to seven star hotels," ITC Chairman Y C Deveshwar said on the sidelines of a CII summit here.

He said the company has resources to expand and will take the opportunity of economic slowdown to acquire assets as asset value at present is very attractive.

"In fact, we are looking this (economic slowdown)as an opportunity to grow. In every adversity there is an opportunity," Deveshwar added.

Asked if the slowdown had impacted the company's expansion plans, he said, "There are no plans to cut back on investments. We will stick to our capex plan because we would not sacrifice our long-term focus. We are going to accelerate our investment."

Last year, the company had said it plans to invest about Rs 15,000 crore in the next five to seven years in areas such as hotels, agri-business and FMCG.

Deveshwar, however, conceded the economic slowdown has affected the company.

ITC mulls more lifestyle stores, ties up with design cos (27 Feb 2008, 0223 hrs IST, TNN)

KOLKATA: ITC Ltd’s lifestyle retailing business division is planning to expand its retail footprint further

by setting up more Wills Lifestyle, John Players and Miss Players stores across the country. It has also embarked on an active exercise to create a stronger brand and retail identity for Wills Lifestyle, which it wants to position as a more international and inspirational brand.

Towards this end, ITC has piloted a new concept with FRCH Design of the US, a specialist in store and mall design. Three concept stores have already been launched, two in Mumbai and one in Delhi. It is also working with the UK’s Elemental Design and The Friedman Group from the US in areas like product presentation, visual merchandising and retail training.

“We want to make the Wills Lifestyle brand more upscale, international and personalise the experience for the customer,” Atul Chand, V-P, sales and marketing, ITC’s lifestyle retail business division, told ET.

As per Mr Chand, plans are on to increase the number of Wills Lifestyle stores from 250 to 400 by the end of 2008-09. “These stores will come up on the lines of the concept store, which has been designed taking the cultural context, customer profile, etc, in mind,” he said.

CONCLUSION:

“BLENDING DIVERSE SKILLS AND LEVERAGING ITS DISTRIBUTION MUSCLE, THE TOBACCO GIANT IS UNLEASHING A WELTER OF NEW BUSINESSES. AN INSIDE ACCOUNT OF THE SILENT REVOLUTION”

These are the words from the mouth of the editor of business today Sanjoy Narayan. This is very true in the context of ITC. ITC has been a leader in the tobacco business, but it realize from the upcoming trends that remaining with a single business is not a noble thought, moreover the company was threatened of the anti-tobacco campaign. Therefore the company decided to venture into InfoTech with ITC InfoTech, foods via Kitchens of India, greeting cards through Expressions and lifestyle retailing through Wills Sport. The revenue generation also is very high from each of these products. .ITC was a cash rich company with a liquidity of Rs.8816 million in the cigarette business, even though the company understood the need and usefulness of diversification.ITC by spreading its wings in the lifestyle segments has opened forty-five stores in 34 cities in just under a year, selling an expensive fashion brand of relaxed-wear. This way it has gained a victory lap through its Wills Sport Brand.

The company has started its retail stores not only in Indian metros but also in the small towns like Ranchi, Jabalpur, Gwalior, Belguam, Ernakulam etc. thus the company adopted strong

market campaign, and used its brand image to attract the Indian youth. The strategies adopted by the company has helped it to differentiate itself in this segment, like the company is outsourcing its designs to The American Design Intelligence Group (ADIG), a San Francisco, US-based garment and retail consultancy. Now it has its own six-member team, even as it continues a tie-up with Science & Designs, an Italian fashion design house – through which it keeps a watch on hot western labels such as Banana Republic and Armani Exchange.

Thus by adopting these strategies ITC will surely maintain its success and add many more new sub-brands to its corporate group-ITC.

Finally any strategy that a company takes is to earn revenues. The given below table clearly shows the success of ITC in terms of Rs. Crores.

 

Key Economic Indicators 1995-96 2007-08

  Rs. Crores

 Gross Turnover 5115 21356

 Market Capitalisation 5571 77765*

 Profit Before Tax 452 4572

 Profit After Tax 261 3120

 EPS - Basic (Rs.) 0.71 8.29

 Net Worth 1121 12058

 Book Value per Share (Rs.) 3 32

 Capital Employed 1886 12817

 ROCE% 28.4 35.7

  * Market Capitalisation as on 31/3/08