ITM Executive MBA, Batch 13B, Term 1, Subject: Concepts of Marketing

BCG Matrix
of ITC Ltd.
V0.2

Main Sources: ITC Portal (www.itcportal.com) , Angel Broking & NSE.

 ITC Ltd.
Formerly Known as Indian Tobacco Company
Formerly Known as Imperial Tobacco Company
ITC Timeline

1925 1975 1979 1990 2000

1910 2008

1910 Incorporation of 'Imperial Tobacco Company of India Limited'.

1925 Setup of Packaging & Printing Business
1975 Launched its Hotels business.
1979 Entered the Paperboards business
1990 Set up 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 Timeline

2001 2005
1910 2008

2001 Introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes

2002 Launch of the brands mint-o and Candyman confectionery 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 fine fragrances
2007 Entered the fast growing branded snacks category with Bingo!.
2007 Launched the 'Superia' range of Soaps and Shampoos in the mass-market segment.
Corporate Governance Structure

ITC Ltd.

Agri Business FMCG-Cigarettes

Paperboards &
Packaging FMCG-Others

Infotech Hotels
FMCG-Cigarettes

Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors,
Capstan, Berkeley, Bristol and Flake

'Best Manufacturer of Cigarettes for the year 2007'

FMCG-Cigarettes

 Started in 1910 As Company’s Core Business

 Market leadership in all segments - geographic & price (70% Market Share)

 Extensive FMCG distribution network (Direct servicing of 1,00,000 markets &

2 million retail outlet)

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

 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 which is 141

 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 (i.e.
Non Filter Cigarettes) which was 20% of total FMCG Cigarette Business.
FMCG-Others

Ashirvad Atta, Kitchens Of India, Mint-o, Sunfeast, Candyman, Bingo,

Superia, Wills LifeStyle, Fiama Di Wills, Expressions, Classmate

‘Superbrand 2006‘ - Superbrand Council.

FMCG-Others
 Ashirvad Atta is now #1 selling.

 Sunfeast Biscuits is ranked #3.

 Bingo, launched in August 2007, now enjoys 16% market share.

 November 2007 Mint-o overtakes its competitor Chlormint

 ‘Classmate’ brand already the most widely distributed stationary brand in

India

 Kitchens of India has about 48% market share in India and a huge export
potential. Ready to Eat food Market is estimated to be Rs.700m.

 Safety Matches market at Rs. 1250 crores p.a. for 24 billion match boxes
which is targeted by ITC’s iKno, Aim, Aim Mega, Aim Metro.

 Successful acquisition of 94% of WIMCO Ltd. i.e. Homelites, Ship.

 ‘Mangaldeep’ the only National brand in the country serves the nation’s
900cr incense sticks market.
Hotels

ITC Maurya (Delhi), ITC Maratha (Mumbai), ITC Grand Central (Mumbai),
ITC Sonar (Kolkatta), ITC Windsor (Bengaluru),
ITC Kakatiya (Hyderabad), ITC Mughal (Agra).

‘Bukhara’ Restaurant named as Best Indian Restaurant in the World.

Hotels
 Hotel Brands: ITC-WelcomGroup, WelcomHeritage & Fortune.

 Totally 90 Hotels, 77 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.

 Restaurant Brands: Bukhara, Dum Pukht and Dakshin.

Agri Business

eChoupal, Agri Exports, Leaf Tobacco

Innovation for India Award 2006 for ITC e-Choupal in the

Social Innovations category for business organizations
Agri Business

 ITC Agri Business is one of India’s largest exporter of agricultural

commodities.

 June 2000, eChoupal – strategic and cost effective sourcing support to the
Foods business (support creation of verticals in wheat, soya, corn, potato etc.)

 eChoupal - Services reaches to 4 million Farmers who are growing Wheat,

Rice, Pulses, Soyabean, Coffee in over 40,000 villages thru nearly 6,500 kiosks
across nine states.

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

 Farmer Financial Services - insurance (focus: weather), credit (focus: Kisan

credit card scheme)

 Rural Retail – 18 Choupal Sagars

 Agenda 2012 is to cover 15 states with 1,00,000 Villages with about 20,000
eChoupal Kiosks servicing about 10 million farmers.
Agri Business – Leaf Tobacco (ILTD)

 Largest Buyer, Processor and Exporter of leaf tobacco in India.

 Exports to about 48 countries.

 ITC processes about 120 million kgs of high quality tobacco yearly. Overall
550m Kg of tobacco is produced in India.

 Factories have integrated warehousing complexes.

 Enabled successful venture into spices business.

 Golden Leaf Awards 2007 in the categories ‘Most Committed to Quality’

 The International Quality Rating System – IQRS Level 7, awarded by Det

Norske Veritas in March 2006.
Packaging & Paperboards

Packaging & Paperboards and Specialty Paper

Indian Manufacturing Excellence Gold Award 2007 and 2006 to

Unit Bollaram by Frost & Sullivan
Packaging & Paperboards

 Annual paperboard demand – appx. 1.1 million tonnes

 Indian paperboard market growing at 7% p.a.

 Significant export opportunities for high quality Indian manufacturers

 ITC paperboards exports - Rs. 2 billion appx.

 ITC’s packaging unit - India’s largest converter of paperboard into high

quality printed packaging

 Provides superior packaging solutions to the cigarettes and new FMCG

businesses

 India has low per capita usage at around 6 kgs p.a.

(World average – over 50 kgs p.a.)

 ITC Bought 0.5% in Ballarpur Industries in July 2008.

Infotech

ITC 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.
BCG Matrix

 BCG Matrix a.k.a. Growth-Share Matrix, Boston Box, Boston Matrix, Boston
Consulting Group analysis.

 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.
BCG Matrix
BCG Matrix
ITC Ltd on BCG Matrix

Star Question mark

G
R
O
W
T
Cash Cow Dog
H

MARKET SHARE
Summary on ITC’s SBUs

Growth-Share
  REVENUES       Matrix
% %
Y/E March (Rs cr) FY2008 FY2007 Growth Contrib. % Market Share Growth Share
FMCG-Cigarettes 13,825.6 12,833.7 7.7 58.41 70% Low High
FMCG-Others 2,511.1 1,689.5 48.6 10.61 16% High Low
Hotels 1,100.2 985.7 11.6 4.65 90 Hotels High High
2nd Largest
Agri Business 3,868.4 3,501.3 10.5 16.34 Exporter High High
Paperboards &
Packaging 2,364.3 2,100.1 12.6 9.99 1st in Asia High High
ITC Infotech - - - - - Low Low
ITC Ltd on BCG Matrix (Conclusion)

Star Question mark

•Agri Business •FMCG-Foods
•Hotels
G •Paperboards & Packaging
R
O
W
T
Cash Cow Dog
H
•FMCG-Cigarettes •ITC Infotech

MARKET SHARE
THANK YOU