BUSINESS ENVIRONMENT Assignment on
ITC (India Tobacco Company)
Submitted to : Dr. Anupreet Kaur Mavi Lecturer, Business Environment Submitted by :
Aashish Kumar - 15001 Dupinder Singh - 15002 Akhil Awasthi - 15003 Satwant Singh - 15030
Retail Management, Semester-2 UIAMS, P.U.
• Excise duty raised by union budget by 5 %. employment patterns. age distribution.Among the FMCG stocks. 1910 under the name Imperial Tobacco Company of India Limited. When populist political appeals stir the passions of the masses. POLITICAL FACTORS – may include Government Regulations. Agri-Business and Information Technology. social mobility. lifestyle choices. likely Technological changes etc.Fast Moving Consumer Goods comprising Foods. Freedom of Press. Government of India. impact of Internet. etc. etc. Globalization. Limited in 1974.
PEST ANALYSIS of ITC POLITICAL FACTORS : The political arena has a huge influence upon the regulation
of businesses. emphasis on safety. Cigarettes and Cigars.
Introduction on ITC:
ITC was incorporated on August 24. ITC Maurya won the 'Best eco-friendly hotel –Special Prize' award by the Ministry of Tourism. TECHNOLOGICAL FACTORS – may include impact of emerging technologies. ECONOMIC FACTORS – may include Economic growth. SOCIAL FACTORS – may include Population growth rate. Labour Costs. and the spending power of consumers and other businesses. Education and Stationery Products. Regulation-de regulation trends. Social or Technological factors. The Indian polity is increasingly seen by political observers as the problem. new conditions. Economic. likely Economic change. Some recent Political Factors ITC had to face in some previous years are mentioned as below: • Huge burden of VAT – increase in prices may affect the sales. As the Company's ownership progressively Indianised. government institutions appear less capable than ever before of accommodating conflicts in a society mobilized along competing ethnic and religious lines.regarding Tobacco products. 2001.PEST ANALYSIS OF ITC (India Tobacco Company) PEST Analysis:
The scan of the macro-environment in which the firm operates can be expressed in terms of Political. • Ban on communication. Branded Apparel. R&D activities. • Smuggling .T. Inflation Rate. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses . Interest Rate. Legal issues. The full stops in the Company's name were removed effective September 18. Likely political change. education. Personal Care. 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. ITC is one of the biggest gainers. Hotels. The Company now stands rechristened 'ITC Limited'. Due to Govt. various Rules of Laws. etc. Labour supply. reduced Communication costs. Incense Sticks and Safety Matches. The acronym PEST is used to describe a framework for the analysis of these macro-environmental factors. • Luxury tax in 10 states – making it difficult for ITC to maintain the consistency level in prices for different places.C. health. Budget impact . Paperboards & Specialty Papers. Packaging.
ITC has a history of collaboration with communities and government institutions to enhance farm productivity and the rural resource base. among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. • Restrictions by government – Several restrictions on tobacco and it advertising has made the promotion of tobacco brands almost impossible. may affect the share of ITC in the Indian Markets. • Changing attitudes towards tobacco – Many people are becoming aware about the ill-effects of intake of Tobacco. • Profit margin is high – and thus. Some Economic Factors ITC had to face in some previous years are mentioned as below: • Bidee : cigarette ratio = 10:1 – which means they are the producers of a very less level of tobacco products as compared to overall consumed. This may lead to the industry suffering some amount of loss in the years to come. They feel that the usage of Cigars and high-branded Cigarettes gives an increase to their status in the society. • Companions mounted by W. ITC employs over 25.•
100% FDI allowed .
It is very important that such factors are considered Envisioning a larger societal purpose has always been a hallmark of ITC. huge inflows of FDI. both an IT and real estate boom. thus leading to a decline in their sales. • Other forms of cheap tobacco intake – the economy of India is not as strong which leads to people consuming cheap tobacco products. ITC is rated among the World's Best Big Companies. India’s economy has been one of the stars of global economics in recent years. they earn a higher proportion of their income by selling these tobacco products. growing consistently over the past decade. intake of tobacco is a status symbol.
SOCIAL FACTORS : The social influences on business vary from country to country.
ECONOMIC FACTORS : Marketers need to consider the state of a trading economy
in the short and long-terms. it will yield higher level of returns over comparatively lesser inputs. and a flourishing capital market. in a study conducted by Brand Finance and published by the Economic Times. This means they can have higher returns as production of cheap tobacco products is comparatively cheaper. Growth had been supported by markets reforms. This is especially true when planning for international marketing. rising foreign exchange reserves. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. India has been one of the best performers in the world economy in recent years. Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine.000 people at more than 60 locations across India.H. • India’s top producer of cigarettes. but rapidly rising inflation and the complexities of running the world’s biggest democracy are proving challenging. Some Social Factors ITC had to face in some previous years are mentioned as below: • Becoming status symbol – for many. and thus.as it will allow several Foreign Brands to enter the Indian Markets. – and it can be concluded that since ITC is the leading producer of tobacco products in India. As a corporate citizen with enduring relationships in rural India. ITC banks on it and makes highly-prices tobacco products as well in addition to the cheaper ones. ITC ranks among India's 10 Most Valuable (Company) Brands'.
ITC's strategic initiatives for developing its people have been based on participative management concepts like QC (Quality Control).e.TECHNOLOGICAL FACTORS : Technology is vital for competitive advantage. • Development of IQMS i. • Software investment – such as GPS monitoring circuits. ITC's development of its Integrated Quality Management System (IQMS) is based on its strong foundation of implementing ISO 9001:2000. KSS (Kaizen Suggestion Scheme).
Miscellaneous – along with good Hardware and Software investment. TQM (Total Quality Management). SA 8000. long-distance clients landing
enquiries. their margin on the product increases significantly. • Hardware investment – High amount of investment is done in hardware such as large Storehouses. IT is an enabler of the business process to ensure business growth through efficient management of operations in the value chain. Thus. IT also plays a very critical role in driving the ITC business strategies. Almost all contract manufacturing units in the Foods Business and all large hotels have food safety and quality systems certified by accredited 'third party' in accordance with 'Hazard Analysis Critical Control Points' (HACCP) standards. efficient manufacturing / supply chain operations etc. Likewise. GIS circuit optimization. the quality of all FMCG products of the Company is regularly monitored through 'Product Quality Rating System' (PQRS). HACCP (for Foods) and IQRS (performance rating and benchmarking of the quality management system). 5S. Six Sigma etc. etc. Technology in India accounts for a substantial part of the country's GDP and export earnings while providing employment to a significant number of its tertiary sector workforce. OHSAS 18001. All ITC manufacturing units have ISO quality certification. ITC gets large number of labour supplies from underdeveloped areas for a comparatively cheaper cost and thus.
and is a major driver of globalization. ISO 14001.
. Innovative Quality Products and Systems. etc. Additionally. systems are set-up in order to obtain them. The Leaf Tobacco and Printing & Packaging businesses have achieved world-class ratings in the 'International Quality Rating System' (IQRS) for business excellence in which key processes are rated against international benchmarks and certified by accredited 'third party' independent assurance providers. high shelves. The basic principle of ITC is to produce quality products and thus. ITC also possesses a great Logistic as well as Inventory support. and online method of electronic clearing. • Adapting other concepts like QC and TQM – Various techniques such as QC (Quality Control) and TQM (Total Quality Management have regularly been adopted by ITC so as to ensure the Quality is maintained and managed regularly. IT creates new business process or restructures the current business process to enhance customer service availability. • Cheap labour supply – It has often been noticed that labour is very cheap and in abundance in India. Some Technological Factors affecting ITC in some previous years are listed as below: • State-of-the-art factories.