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• • • • • • Company Brief Time Line Business Portfolio of ITC SWOT analysis BCG matrix Strategies
• ITC is one of India's foremost private sector companies . • Market capitalisation of nearly US $ 18 billion • Turnover of over US $ 5.1 Billion • One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004 . • Only Indian FMCG Company to feature in Forbes 2000 List . • Ranks No. 9 among Indian listed Private Sector Companies by market cap. (@ 31/03/08) • No. 1 in FMCG Sector.
Time Line Of ITC
1910 1925 1953 1971 1974 1975 1975 1986 1990 1994 2000 2000 2000 2000 2001 2002 2005 ITCL (Imperial ) established in Kolkatta ITC ‘s Packaging and printing business was set Imperial converted into a public limited company It set up a marine product export Division Company Changed its name to ITC Ltd ILTC became a part of ITC launched Hotel business Established ITC Hotels as a separate division ITC set up the Agri Business Division Commissioned Mc .Kinsey to study their business e-Choupal initiative in Bhopal with Soya farmers ITC Launched ‘Expressions’ ITC Launched ‘Wills Lifestyle’ ITC – ITC Infotech ITC formed the food division. ITC entered the safety match business ITC introduced Essenza Di Wills
Business Mix of ITC Ltd.
FMCG • Cigarettes • Foods • Lifestyle Retailing • Greeting, Gifting & Stationery • FMCG – Others (Safety Matches &Agarbattis) Paperboards and Packaging • Paperboards & Specialty Papers • Packaging
Business Mix of ITC Ltd.
Agri - Business•
Hotels Group Companies
• ITC Infotech
Strength •Brand •Management Opportunity •Rural market •E-choupal Weakness •Unrelated diversification
Threats •Increasing tax in Cigarettes •Health hazard
The BCG Matrix for ITC Ltd.
Stars •Hotels •Paperboards/ Packaging. •Agri business. Cows •FMCG-Cigarettes ? •FMCG- Others
ITC’s corporate strategies
• Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets. • Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology. . • Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC’s various businesses.
Special Thanks to Prof. Rakesh Gupta for giving us such an enormous project
Anoop Anagha Madhur Mansi Meenakshi Suparna
FMCG - Cigarettes
ITC’s Cigarettes Business
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
Cigarettes: Growth potential
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
Per Capita Adult Cigarette Consumption (Sticks)
Source : Based on Cigarette consumption data(2003) from “World Cigarettes”,ERC Group plc.
ITC Distribution Network
DISTRIBUTION NETWORK(Tobacco Div.)
Bangalore Calcutta Saharanpur Munger
GODOWNS GODOWNS (18) (18)
BRANCHES BRANCHES (18) (18)
WHOLESALE DISTRIBUTORS WHOLESALE DISTRIBUTORS (60 PER BRANCH) (60 PER BRANCH)
SECONDARY SECONDARY WHOLESALERS WHOLESALERS
“ Branded food business grew over 57 % than previous year”
(Sustanibility report ITC 2008)
• • • • • •
In 2001 ITC Formed the food Division Divided into four main categories Ready – to – Eat gourmet. Confectionary & chocolates Biscuits & cookies. Branded Staples.
• Ready to eat Gourment • Keeping alive long forgotten culinary traditions ITC introduced Kitchen of indiain Aug 2001 • The RTE market is approximately Rs 600-700 million( ITC Food CEO Interview in press realeses)
Sunfeast Buscuits and cookies range BINGO was launched in march 2007 it has captured 16% of market share . Making it second largest in the market
(4P ‘s magazine 2007 )
Confectionary market :- currently into two brands Minto-O and Candyman
ITC Food NOW
• With one year of launch BINGO has attained double digits market share. • The confectonaray category sales revenue have increased by 40% than last year • RTE is well established over 4500 stores in US market .
( Sustanability report ITC 2008)
PERSONAL CARE MR. Sandeep kaul (CEO)
• Essenza di wills in mid 2005 (french) • Inizio femme (women) • Inizio homme (men) ADDITION Essenza di wills AQUA Range for men (after shave lotion, deodorant. hair and body shampoo & bathing bar)
1)Fiama di wills shampoos conditioner shower gels soap (sep 2007) 2) Vivel di wills Soap shampoo,
3) Superia Soap shampoo
WILLS LIFE STYLE
• In 2000,ITC Extended Wills to fashion retailing with an investment of Rs. 2.5 billion and opened first Wills Lifestyle store in Dec. 2000 in New Delhi to retail Wills Sport brand.
• LRBD tied up with American Design Intelligence Group (ADIG) A San Francisco based consultancy
• The LRBD expected to make a turnover of Rs.450 million for financial year March 31,2003.ITC also plans to take Wills Sport overseas by setting up in various countries.
• The move is aimed at wooing the young upwardly mobile segment, which is expected to bring 30 per cent growth for the company. • From 50 stores at present, the company plans to have 80 stores by the year-end. (July 23,08)E.T
EDUCATION & STATIONERY
ITC made its entry into the stationery business in 2002 with its premium range of notebooks, followed in the year 2003 with the more popular range to augment its offering.
Manufacturer of India's first environment friendly Elemental Chlorine Free (ECF) pulp, paper and paperboard. Knowledge of image processing, printing & conversion garnered from its Packaging & Printing Business. Brand Building & Trade Marketing & Distribution strengths resident in its FMCG Business.
• The Paperkraft range consists of premium stationery with a wide variety for executives to choose from • Classmate - India's largest National brand, reaching 50,000 outlets across the country, has over 300 variants in its range •
PAPER BORDS AND SPECIALITY PAPERS
• ITC’s Paperboards and Specialty Papers Division is India’s largest and most technologically advanced paper and paperboards business. ITC caters to a wide spectrum of packaging, graphic, communication, writing, printing and specialty paper requirements through its four world-class mills in India.
• Internet and SMS delivering made paper industry( shrinking industry )( Rs 300 crore in 2000, Rs 100 crore now) • A Rs 3,000-crore market, only 15 per cent of it lies with the organised sector. While ITC claims it has the largest share of the market at 8 per cent (as against Navneet Publications’ 5 per cent and Ballarpur Industries 2 per cent).
Helping in growth of SMEs
• Safety Matches: ITC's brands of safety matches include iKno, Mangaldeep, VaxLit, Delite and Aim. The Aim is the largest selling brand of Safety Matches in India. ITC also exports premium brands to markets such as Europe, Africa and the USA. • Aggarbattis: ITC has launched Mangaldeep brand of Aggarbattis with a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra. Mangaldeep is also being exported to USA, UAE, Bahrain, Nepal, Singapore, Malaysia, Oman and South Africa.
Paperboards, Paper & Packaging
Indian paperboard market
Annual paperboard demand – appx. 1.1 million tonnes Fragmented capacity & obsolete technology Low per capita usage at around 6 kgs p.a. (world average – over 50 kgs p.a.) Indian paperboard market growing at 9% p.a. Value Added Coated board - the fastest growing segment (20% p.a.) in India driven by the growing sophistication of the consumer
Paperboard Demand Projections Asia
Asian region demand (excluding Japan) growing by 0.5 million tonnes per annum Significant export opportunities for high quality Indian manufacturers • ITC paperboards exports - Rs. 2 billion appx.
ITC’s Paperboards Business
Market leader in growth segment - value added coated boards World-class contemporary technology • Ozone bleached Pulp Mill operations commenced – 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 80,000 hectares
Fully integrated operations with in-house pulping capacity at appx. 2.20 lac MT • Expansion completed; source of sustainable competitive advantage
ITC’s Paperboards & Packaging businesses
Capacity expansion projects underway • 120000 TPA Pulp Mill – commissioning commenced; being stabilised • 100000 TPA paper machine (to support Stationery business growth plans) – trial commissioning commenced ITC’s packaging SBU -India’s largest converter of paperboard into high quality printed packaging • Leading supplier to Indian FMCG segment • Provides superior packaging solutions to the cigarettes and new FMCG businesses
Agri Businesses - Leaf Tobacco
- Agri Commodities
ITC’s Agri Commodity Business
Farm linkages in 14 states covering Soya, Wheat, Rice, Marine products, Coffee etc. 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
Procurement: cost & quality optimisation
• 23 Choupal Saagars operational • Rapid expansion planned in identified rural markets and Tier 2, 3 & 4 towns
Hotels & Tourism
Indian hotel industry
Current supply – appx. 110,000 rooms of which 5 Star category accounts for appx. 30% India needs an additional 50,000 rooms in the next 2/3 years to service projected tourist arrivals Present mismatch between supply and demand expected to persist over the short term
ITC’s Hotel Business
ITC-Welcomgroup : a leading hotel chain in India • Established presence in key business locations • Over 6000 rooms under 4 distinct brands
Luxury Upper upscale Upscale - mid-scale Heritage
ITC Hotel: Luxury Collection WelcomHotel: Sheraton Fortune Hotels WelcomHeritage
"Mansions of Luxury" "Passion for Quality" "Promise of True Value" "Unique Experiences"
Capacity expansion underway at Bangalore and Chennai; plans for other locations also being progressed
ITC’s Hotel Business
• Manages 24 full service mid-market properties (1700 + rooms ) under the Fortune Hotels brand – 100% subsidiary company : Fortune Park Hotels Ltd. • Also operates 52 ‘WelcomHeritage’ brand properties under the
– Maharaja Heritage Resorts Ltd. 50% JV with Marudhar Hotels (P) Ltd.
Fact File - ITC Infotech
• Incorporated in October, 2000 • 100% subsidiary of ITC Limited • 100% owned subsidiaries in US
• 1,500+ software professionals • 2,600+ Tech Support
• 1 Million Sq. Ft. owned
Boston, MA Chicago, IL Princeton, NJ San Jose, CA Phoenix, AZ Mexico Bogota Nashville,TN
Moscow Beijing Calcutta Bangalore
Hamburg Bucharest Islamabad Prague Cairo Adis Ababa
Kuala Lumpur Singapore Jakarta
Implementation across 42 Countries, Support for 142 countries
DEVELOPMENT CENTRE CO-LOCATED OFFICE PROJECT OFFICE
4 global delivery centres 100% owned subsidiaries in US & UK, Offices in India, USA, UK, Czech Republic and Malaysia
Key Areas of Business
BPO/Technical Helpdesk Services CRM Services Custom Applications (Microsoft, Java) ERP Services Mainframe Infrastructure Services Multimedia & Animation Services Strategic Consulting Testing Services