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Executive Summary Introduction Background Market & Competition • Ready to Eat • Confectionary • Staples • Biscuits • Snacks Financial Data Strategy Structure Culture • Vision • Mission • Core Values • Philosophy • Design Effectiveness Contribution Bibliography

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Staples and Snacks Food segments. sales and profits. packaging and hotel businesses. Also. through our report we have tried to study the environment in which ITC foods operate. 1 position in the market. Here. foods and confectionery. We have also analyzed the market of ITC foods and the competition involved. ITC has diversified presence in tobacco. an effort has been made to project ITC’s future prospects. 1910 as the Imperial Tobacco Company of India Ltd in Kolkata and its name was changed to I. The Foods Division is the most recent diversification of the ITC group. We have also studied the various strategies adopted by company to achieve its goals and the structure and the culture developed within ITC to support its objective. They launched KoI brand under Ready to Eat segment .C. 3 .T. paper boards. ITC has fulfilled all needs and requirements of the people. apparel.EXECUTIVE SUMMARY ITC was established on Aug 24. If the company maintains its standard or increases it in the near future it surely will attain the no.They expanded with brand launches in the Confectionery. They entered in this business in 2001. Limited in 1974 and finally they changed it to ITC Ltd in 2001.

demonstrate that ITC has a deep understanding of the Indian taste and the expertise required to translate this knowledge into delightful dining experiences for the consumers. 4. and produce the quality demanded by its customers. For ITC. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. The Foods business is today represented in 4 categories in the market. ITC has stood for quality products for over 98 years to the Indian consumer and several of its brands are today internationally benchmarked for quality.INTRODUCTION ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand. branded cuisine. ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. These are: 1. through the e-Choupal initiative. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery. Staples and Snack Foods segments. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6 brands: 4 . several new and innovative products are under development in ITC's state-of-the-art Product Development facility located at Bengaluru. 3. Ready To Eat Foods Staples Confectionery Snack Foods In order to assure consumers of the highest standards of food safety and hygiene. ITC has over the last 98 years established a very close business relationship with the farming community in India and is currently in the process of enhancing the Indian farmer's ability to link to global markets. ITC's world famous restaurants like the Bukhara and the Dum Pukht. nurtured by the Company's Hotels business. contemporary packaging and sourcing of agricultural commodities. Apart from the current portfolio of products. This long-standing relationship is being utilized in sourcing best quality agricultural produce for ITC's Foods business. 2. the packaged foods is an ideal business to utilize ITC's proven strengths in the areas of hospitality.

the business is progressively focusing on consolidating the portfolio in certain categories. Bingo! Recently. 4. the business has had to contend with the recent economic slowdown and severe cost increases in input commodities including wheat. Kitchens of India Aashirvaad Sunfeast mint-o 5. improving market servicing and driving supply chain efficiencies. maize and skimmed milk powder.1. on Aug 1. 3. ITC Foods has drawn up plans to extend its Kitchen of India brand to frozen foods. Having acquired reasonable scale in a relatively short span of time. 5 . in addition to the soaring fuel prices. vegetable oil. ITC’s Branded Packaged Foods business continues to expand with sales growing by 23% over the previous year. Apart from the development costs of new products. Candyman 6. 2. 2008.

Ltd. The retail outlets were called Wills Lifestyle and offered premium leisure wear for men and women under the Wills Sport brand.T. the company was involved in the trading of imported cigarettes.C. I.T. I.BACKGROUND NOTE (ITC) ITC was established on August 24. The name of the company was changed to India Tobacco Company Limited (I.C. I. set up an International Business Division (IBD) for export of agricommodities.C. the company launched another clothing brand. In September 2001. in a backward integration move. I. Ltd. 1910 as the Imperial Tobacco Company of India Limited in Kolkata. In 2002. ITC launched Fiama Di Wills soaps and shampoos following the success of Essenza Di Wills. In 2004. the company started a packaging and printing business.. In 2001. in 1979. tied up with the US-based Sheraton Corporation to enter the hospitality industry.T. also entered the fashion retailing business by extending its well known cigarette brand Wills. In 1975. In 1990. through ITC-Welcomgroup.C. ITC has launched an exclusive line of prestige fine fragrances and personal care products under the Essenza Di Wills brand. 6 . Andhra Pradesh.T. ITC was one of eight Indian companies to make it to the “Forbes ‘A’ List”8 which featured 400 of “the world’s best big companies”. I. and with no meaning attributed to the alphabets). In Oct 2005. In late 2007.C. It acquired its first hotel in Madras (later renamed Chennai) in Tamil Nadu and called it the Welcomgroup Chola Sheraton. Ltd. started a greeting cards business under the brand name Expressions in the year 2000. John Players. In 1925.T.T.) in 1974.C. In the same year. ITC made an entry into the foods business. Ltd established ITC Bhadrachalam Paperboards Ltd. Initially. the company was renamed ITC Ltd (without full stops. which targeted the urban youth. (IBPL) in 1975. The company started production at its integrated pulp and paper/board manufacturing facility at Bhadrachalam.

entry to this business is easy and ITC has utilized this fact very efficiently to their benefit as they entered into the several categories among this Foods business. curries. After launching all these products ITC FOODS is looking to share 50 to 60% of market by 2008-2009.Following are the major competitors ITC is competing with in Ready to Eat category: 7 . 35 to Rs. In 2007. ITC exported 40-50% of KoI brand products (in terms of volumes) to the US. MTR was the clear market leader with close to 60% in market share. As on April 2006. but it continued to post an Av nnual growth of 20%. However. were developed jointly with Karen Anand. both under the Aashirvaad Brand. biryanis (Noor Mahal. the total turnover in the Indian ready-toeat and ready-to-cook segments was only around Rs. Switzerland. though ITC had captured a 35% market share in the ready-to-eat segment. READY TO EAT ITC entered into the branded and packaged foods business in with the launch of Kitchens of India brand. Priced at Rs. By early 2006. 10 for 80g pack. In 2004. ITC entered the branded spices market in 2005 and the Instant Mix segment in 2006. The manufacturing of these products was outsourced to contract manufacturers for saving the operating cost. There are many competitors in all the categories and although they all have similar products available at similar prices. ITC planned to introduce ten more varieties under the KoI brand within a price range of Rs. 70. Multi-purpose cooking pastes were also launched under the Aashirvaad brand and these were priced at Rs. Market and Competition Indian Foods market is a monopolistic market. In May 2006. 700 million. 98. these were targeted at the premium segment. the UK. they are trying to prove themselves different through their marketing strategies. and Australia. The fruits and spice conserves. Canada. ITC is the first and only Company in India using the ECF technology. conserves. Bhori Biryani and some new range of products under Gharana (Paneer Malai. the company launched KoI brand fruits and spice conserves and cooking pastes. some new products have been launched under Ready To Eat category like chutneys. Keema Mutter). which were priced at Rs. a food expert.30 for a 100g pack. The KoI cooking pastes.In Dec 2007 ITC launches ECF (Elemental Chlorine Free). also targeted the highend market.

Offers packaged Bhel puri chats such as Sev Puri. Mango Dal. Dhokla among others Offers packaged sweets. pickles.namkeens. Bhelpuri. Haldirams Ethnic Kitchens MTR Priyafoods 8 . MTR foods currently comprise twenty-two delicious and completely authentic Indian curries. Paneer Butter Masala. Alu Tikki. Kajui Ladoo and many more items. Punjabi Chhole and Rajma Masala along with true southern delicacies like Andhra Veg Pulav. cookies. Navaratan Kurma to Palak Paneer. Gongura Dal.syrups. Chana Masala. Gol Gappa. Pao Bhaji. Bhujia. Chana Dal. gravies and rice.Brands Gits Description Gits produces the selected range of popular ready to cook and instant foods that cover a range of ethnic Indian cuisine-and where the recipes have "Global pallete acceptance". Priya has a range of popular traditional recipes starting from Dal Makhani. Pakoras. aloo Masala. Samosa.

2500 crore. ITC’s Mint-O fresh secured a 17% share of Indian cough lozenges market ahead of former leader Perfetti which only achieved 14. 2.) as on June. Perfetti van melle ITC Ltd.3% with chloromint.Ready To Eat 9% 8% 48% ITC Ltd. 4. The Indian giant marked the confectionary sector in 2002 and has only two brands “mint-o fresh” and “Candyman”. 7. 5. 3. MTR Kohinoor 35% Others(Gits. 2008 CONFECTIONERY Confectionary market in India is about Rs. Hard boiled candies Toffies Eclairs Chewing gum Bubble gum Mints lozenges ITC has currently in market with its two brands “Mint-o” and “Candyman”. Priya Foods etc.Market Share . Nestle Cadbury 9 . But in overall confectionary market they are lagging behind having just 3% market share as compared to market leader Perfetti with more than 37% market and providing larger number of brands. It is loosely divided into seven categories: 1. 6.

Munch . Polo . ITC extended the Aashirvaad brand to edible salt. The market was growing at 12%. Joyco.Alpenliebe Alpenliebe Creamfills Alpenliebe Lollipop Big Babol Center Fresh Center Fruit Center Shock Chatar Patar Chlor-mint Chocotella Cofitos Fruittella Happydent White Protex Happydent Marbels Mentos Chocoliebe Candyman Minto . HUL etc. Milk Chocolate . Its closest competitor HLL’s Annapurna brand was trailing behind with a market share of 18%. 4 billion organized salt market (as of 2006). mixers. ready to cook pastes. Polo Power mint .Confectionery ITC Ltd. Éclairs Bubbaloo Dairymilk Eclairs % Star Gems Perk Halls Market Share . 6 billion packaged flour business. By early 2006. Perfetti Van Melle 42% 37% Cadbury Nestle 7% 11% Others(Parle. Kit Kat Lite . Milky Bar . 2008 STAPLES ITC entered the staples market in 2002 with wheat flour under the Aashirvaad brand. Under its Aashirvad brand ITC FOODS also launched salt. Munch Pop Choc . Fun Bar . Tata Salt was 10 . ITC had a 40% market share in the Rs. In the Rs. Kit Kat .) 3% as on June. In 2003.

Other players in this business are HLL (Knorr Annapurna). 2008 BISCUITS: Indian biscuit market is estimated to be around 5000 crore. Milk Bikis Good Morning. Britannia Tiger Nutrichoice Junior Good Day. Market Share .Staples ITC Ltd. 50 50. Biscuit industry in India in the organized sector produces around 60% of the total production. they are able to get 12% share of the market.) HLL 21% as on June. SUNFEAST. 24% 42% Pillsbury 13% Others(Sri Lal Mahal. Within few years. the balance 40% being contributed by the unorganized bakeries. Treat Pure Magic. etc. ITC Ltd (Sunfeast) Marie Dream cream Milky Magic Fit kit Choco Nut Butter Nut Parle Parle-g Krack-Jack Monaco Kreams Hide and Seek Milk Shakti Priyagold Butter Bite Classic Cream Butter Lite Big Boss Marie Lite Magic Gold 11 . ITC with its premium product. is acquiring a big share of market. ITC had only a 5% share of the market.the market leader with a 28% market share. Marico Industries (Saffola). Local Brands etc. Nirma (Shudh).

Priyagold Britannia Parle 32% 38% Others(Bonn.Biscuits 8% 12% 10% ITC Ltd. Product Price (ITC Ltd) Product Price (Frito Lay) Product Price (Haldiram) 12 .Market Share . Anmol etc. 2008 SNACKS: Snacks industry overview Snacks industry in India is worth 1800 Crores of Rs. and growing at 10% is one of the largest markets in the world.) as on June. out of which potato chips holds the major market share of around 85%.

10 Rs. 5 Rs. 20 Lehar Namkeen Rs. particularly in snacks.Bingo Rs. 5 Rs. 10 Rs. 20 Lays Rs. which they are using for their tobacco product. Moreover they entered in a whole new market of food. 20 Kurkure Rs. 27% FritoLay India Haldiram's Others 45% as on June. 5 Rs. However.Snacks 12% 16% ITC Ltd. 20 Namkeen Rs. costly advertisements and expansion plan. 13 . started their food division in the year 2001. surprisingly they did good job. So considering all these factors and short span of time period. surveys. mainly because of their valuable investment in market research. 20 Market Sahre . 10 Rs. Since then the growth has been fantabulous. they could not sustain the constantly increasing profit margins. 2008 FINANCIAL DATA ITC Ltd. but for this market they already had strong distribution market. 5 Rs. biscuits. R&D. 5 Rs. Their investment has increased year by year considering the scope of food market. 10 Rs. Ready to Eat and staples market.

29% 45.04 241. with net turnover at 3900 crores registered a growth of 18.397.40 2. Overall projection for the year 2009.191.92 1.10 2.639.15 Mar ' 06 286.38% 36.15 18.7 9 15.572.37% 15.837.49 5.88% -72.592.52 332.55% -8.85 18.644.08 4.5 6 18. which grew by 29% due to new investments in FMCG market.90 541.26 416.92 ACTORS AFFECTING NET PROFIT Rate of Increase Sales Operating profit Net profit / loss 37.73 2. Crores Annual results in details Mar ' 08 610.19% 15.4% driven by the non-cigarette business.310.48 Other income Raw material Employee expenses Other expenses Provisions made Depreciation Taxation Net profit / loss 4.61 438.97 1.0 7 28.31 16.32 Mar ' 07 336.67% employ ee cost 12.08 312.610.1 2006 6 26.3 Projection for 2009 3 2005 18.88 2.21 1.17% The selling of 13544 crores.35 1.124.40 Mar ' 05 Mar ' 04 235.78 467.3 2007 4 12.9 8 raw material 10.34 630.62 726.40 1.90 4.235.39% 16.35 733.84% -17.Annual Results (ITC) - In Rs.21% interest 71.5 8 2.226. for sales is projected to be at growth rate of 21.451.81% 18.33%.699.67 3.87 836.00 2.938.82 2.30 19.34 988.81 224.46 1.176.01 20.7 2008 6 21.88 362.51% 40.87% 16.120.90 11. 14 .16% -71.

national and also regional competition is very tough. Different types of restrictions imposed by the government are also playing a vital role in reducing profit margins. The growth of this sector in terms of product categorization is as follows. Sales in RTE grew by 35% ITC Food is looking to expand its RTE category to maximize its profit. With that wheat. As far as Confectionary market is concerned.60 2009(projected) 3410 SALES OF FOOD SECTOR AND ITS PROJECTION: The foods business is expanding rapidly with sales growth of 35% in the year 2007.53 2008 2526. GROWTH AND INVESTMENT PLANS: This food sector is the most promising field and has already overtaken IT and PHARMACEUTICALS Sector of India. ITC is trying to reduce cost of its biscuits by acquiring mass production of wheat directly from farmers through its Echaupal initiatives. one can say that it is one of the toughest market to compete in as all the market giants are already there.54 2007 1698. Also. In this area international. Even Indian Government is looking to develop this sector. For example. Also in this way ITC is able to reduce the price of its staples. So low operation cost is the key.Sales (crores) 2006 1230. Sales in staples category grew by 52% Sales in confectionary grew by 51%. This range of product includes more than 150 different products. Sales in biscuits category grew by 55%. Indian middle class is price sensitive. exporting non-vegetarian foods out of India is restricted. That’s the reason central Government has already passed several projects for 15 . ITC is looking to launch its brand of chocolate in collaboration with an American company. petrol and labor cost is increasing day by day. After analyzing the food sector. ITC’S NEW CHALLENGES: This food industry is the industry with very less profit margins. To cover this up.

which ultimately will increase the productivity and cost effectiveness for their staples and biscuits business.76 21. In this way FDI in this sector is possible.33 Operating Profits 18. They are looking to add several products in their RTE list which will be exported as well. As of today ITC has invested 20 crores in R & D and planning to invest further 15 crores to produce new products in different categories.07 28.90 11. ITC Foods has also decided not to make heavy investments in manufacturing unless volumes pick up. Also government in its 2006 budget has reduced custom duty from 16% to 8% on packaged food and also excises duty on instant food mixes.15 18. Thus looking at all the strategy of ITC future investment and planning.16 26. The future investment plan is as follows Rate of Increase 2005 2006 2007 2008 2009(Projected) Sales parks.01 20.79 15. Through this they will provide highly valuable seeds and other solutions to farmers in India. Also in late 2007 ITC has acquired one Australian Plant and seed technology industry. 10.56 18.92 Net Profit/loss 37. It is also planning to open one more new plant in Calcutta for Indian market.58 2.34 12. This will help ITC to be competitive in the market. Recently ITC has started exporting packaged food from its Bangalore plant. 8 billion in 2005-06 which further increased to Rs.2 billion in year 2006-2007.98 16 . Its turnover in the foods business was around Rs.30 19.31 16. ITC has decided to make an investment of 300 crores over a period of 5 years.

34 21.00 20.15 18.92 17 .76 28.33 Rate of Increase of Operating Profit with Projection for 2009 25.00 15.00 0.00 5.00 percent increase 25.90 16.00 Percent Increase 20.00 0.Rate of Increase of Sales with Projection for 2009 30.07 12.30 19.31 18.16 26.00 5.00 2005 2006 2007 Ye ars 2008 Projection for 2009 11.00 10.00 2005 2006 2007 ye ars 2008 Projection for 2009 18.00 15.00 10.

98 2.58 Percent Increase 20.00 37. This strategy has helped ITC to quickly establish itself in the above mentioned businesses.00 25.00 30. was under pressure owing to several factors like government bans on advertising and on smoking in public places. Staples. Frito Lay.Rate of Increase of Net Profit/Loss with Projection for 2009 40.00 0. in Bingo. 18 . and anti tobacco campaigns.00 5. tobacco. Following are some of the strategies that ITC adopted to make its food business a success: • Entering into less competitive or unexplored markets (Ready to eat. although the competition is tough but there is only one player with whom ITC has to compete i.00 35.56 18. Wafers): When ITC entered into the foods business in 2001. it focused on unleashing the areas where the competition is very less or there is no competition.00 20. Also. While ITC’s core business.00 15.01 2005 2006 2007 years 2008 Projection for 2009 Major Strategies Adopted by ITC Foods Entering the foods business was itself a strategic decision for ITC. ITC planned to deploy its surplus in the packaged food business where it saw huge business potential. It started with packaged ready to eat food and later extended that to Aashirvaad brand of edible salt and Atta.e. Recently ITC has announced its desire to forge in the frozen foods category in the domestic market. Players in this category are limited and ITC hope to exploit this fact.00 10.79 15. hikes in the excise duty for cigarettes.

They were positioned as premium products with target groups including tourists. ITC also enjoyed cost advantages over its competitors owing to its electronic procurement system called e-Choupal. In Biscuits also. To do this. ITC Foods launched Sunfeast Pasta. With this strategy ITC built for itself new markets. Same is the case with Ready to Eat food category and Biscuits. Wafers. Today. • • Cost control strategy (all products): When ITC started the foods division. a whole wheat based product targeted at children.8 million outlets whereas Parle is available at only 1. Diversification of products (Biscuits. It was expected to compete with products like Nestle’s Maggie noodles. chilli flakes in a biscuit and even honey flavor under the Sunfeast brand. every new product launched in the market needs to be known to the consumers before it is launched. Advertising is 19 . ITC used this network to distribute their biscuits and wafers. This strategy has helped ITC to attract a wide range of market. and innovative packaging. This helped ITC to compete with the best. • • Extensive advertising (Biscuit. NRIs. and Ready to Eat): One of the ITC’s successful strategies has been the method of diversifications among its various products. wafers): Just like a Bollywood movie needs good publicity to be a super hit. For e. To overcome this challenge. ITC’s Bingo and Sunfeast are available at nearly 1. they planned to capitalize by leveraging the strength of the group’s other businesses. costeffective. its main challenge was to compete with the players who were already there.5 million outlets. a butterscotch cream biscuit. ITC realized that they have to offer products at a price which is either equal or less than what the competitors are offering. etc. Market differentiation (Ready to eat. ITC launched differentiated products in each and every segment. Biscuits): ITC started packaged foods business with the KoI brand of ready-to cook products. In March 2005.g. confectionary.• Distribution Network: ITC already had a huge distribution network due to its tobacco business. ITC has come up with 16 flavors in comparison to its competitor ‘Lays’ of ‘Frito Lay’ which has only 4 major flavors. it introduced an Orange Marie. If we talk just about Bingo. This not only provided a good launch to their products but also helped in boosting sales. ITC’s printing and packaging business provided high-quality.

depended on two factors – an effective distribution network and the quality of the product. In the top-30 cities. ITC was innovative in identifying the market or niche for all its products. • Regular introduction of new products (all products): Having acquired reasonable scale in a relatively short span of time. to remain in the competition it had to introduce new products regularly. To maintain freshness of the product. sales personnel and a well-managed MIS system. ITC attempted to ensure that the supply chain was responsive. ITC spent close to Rs 100 crore on marketing. The physical aspects of the supply chain like warehouses and trucks were closely monitored to maintain cleanliness.where ITC made the difference in comparison to its competitors. ITC has been expanding its distribution network aggressively and also their product range. Same is the case with Ready to Eat and Kitchen of India. Success in the staples business. • • Maintenance of freshness and hygiene (all products): ITC positioned its wheat flour on the health & hygiene and value for money terms. it is launching new products or flavors week after week. and laid emphasis on making accurate sales forecasts using inputs from distributors. This is evident form the award winning marketing campaign for Bingo and Minto Fresh. mass Hindi channels like Zee and Star TV. According to industry estimates. It also had around 20 spots on a variety of radio channels and advertised in most leading national dailies. the company strove to minimize the transit time by regulating the shippers to maintain company-specific transit norms. Innovation (all products): When the need to introduce new products arrived. In biscuits and wafers range. and news channels. the company booked 10 to 15 spots per channel per day on youth channels such as MTV and Star World. ITC shifted its focus on to the innovation.000 outdoor hoardings advertised the product. Therefore. over 1. Hiring the best people from the film industry and sports (Sharukh Khan and Sachin Tendulkar for Biscuits. Also. This kind of promotion of products helped ITC to make its products known to everyone and now it was not difficult to attract consumers. ITC realized that. Rakhi Sawant for Minto Fresh) showed ITC’s urge to be the best. The tagline "Jab Laila ko karna tha impress to majnu ne khayi mint o fresh" has stood the test of times and is still widely known and remembered. especially in the branded and packaged wheat flour business. On television. 20 . They hired the best professionals and the best ambassadors in the country to make their products famous.

All the above strategies and with the help of launch of Bingo in 2007. with three varieties of biscuits .• From Analyzers to Prospectors (Biscuits): When ITC entered the biscuits market with Sunfeast in 2003. imitating and emulating the leader that was Britannia. 21 . marie. they did what any new player in the market does. Their strategy was to manufacture those products which are already a success in the market. as ITC got hold of the market. it started to manufacture flavors which were never heard of. ITC finally tasted success in its food business in 2008 when it became a profitable business for the first time since its launch in 2001 Structure ITC has a three-tier management structure. and cream.glucose. This was the result of ITC’s desire to exploit new product and market opportunities. But.

The ITC board is a balanced board comprising Executive and Non-Executive Directors. At the second level is the Corporate Management Committee. The Board ensures that the Company has clear goals relating to shareholder value and its growth. It sets strategic goals and seeks accountability for their fulfillment. The company’s organizational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each of them.At the top are Chairman and Board of Directors. its wholly owned subsidiaries and their wholly owned subsidiaries. who are responsible for the strategic supervision of ITC. There are four board committees. Secretarial. which is responsible for the strategic management of the company's businesses within Board-approved direction/framework. Human Resources. Corporate Functions of the Executive Management Team includes Planning and Treasury. Accounting. the Compensation Committee and the Investor Services Committee. Internal Audit and Information Technology." This three-tier governance structure ensures that: For and on behalf of the shareholders the company believes in incorporating strategic governance in its work culture so as to ensure that despite being free from involvement in 22 . Communications. the Audit Committee. It comprises all the Executive Directors and three or four key senior members of management. Legal. Third level consists of divisional CEOs of each business assisted by their own divisional management committees. namely. the Nominations Committee.

good corporate citizenship and exemplary personal conduct. With mundane tasks of everyday executive management being delegated the management remains focused on issues of immediate importance. viz. Overall. senior management and employees of the Company.the task of strategic management of the Company. the structure of ITC has high complexity because of horizontal differentiation within the organization. empowerment and accountability. which is the development of the nation’s economic. it can be conducted by the Board with objectivity. transparency. The ITC Code of Conduct. The practice of each of these creates the right corporate culture that fulfils the true purpose of Corporate Governance. This is further reflected in the deep commitment of the company to contribute to the ‘Triple Bottom Line’. control and ethical corporate citizenship. as adopted by the Board of Directors. thereby sharpening and ensuring accountability of management. But corporate governance ensures a system of checks and balances to ensure that these powers that are bestowed upon the executive management are used in a responsible manner so as to meet shareholder and societal expectations. The most visible evidence is that of specialization and departmentation. This Code is derived from three interlinked fundamental principles. is applicable to all Directors. The Code 23 . The core strengths of ITC's governance philosophy are trusteeship. ecological and social resources. The company believes in empowering the executive management. Corporate Governance as defined by ITC is a systemic process by which companies are directed and controlled to enhance their wealth-generating capacity. ITC is of the firm belief that the governance process being followed should ensure that these resources are used optimally to meet the aspirations of its stakeholders and society. A company employs vast sums of societal resources during this process of wealth generation. Complexity also increases because of spatial differentiation. The Executive management of the individual businesses that are free of handling strategic management responsibilities of ITC as a whole is then able to channelize their energies and time in enhancing the effectiveness and overall growth of their individual units. good corporate governance.

and the philosophy of leading by personal example. as the company believes in giving executive freedom to the management to drive the enterprise forward without undue restraints but this freedom of management should be exercised within a framework of effective accountability. formalization is also there in ITC. Since non-adherence to the code is brought to the attention of the immediate reporting authority. CULTURE 24 . Decision-making is decentralized. safety and environment. transparency and auditability. a gender friendly workplace.covers ITC's commitment to sustainable development. concern for occupational health. legal compliance.

ITC's Mission • • To enhance the wealth generating capability of the enterprise in a globalizing environment Deliver superior and sustainable stakeholder value. at the same time ensuring that in achieving these goals no compromises are made whatsoever in complying with rules and regulations as specified by law. Mutuality. Collaboration. Meritocracy. services and management practices. Trust. preventing sexual harassment of any form and the adherence to good employment practices. do it well and win. It fully understands that it has a commitment to its stakeholders to act as a guardian of the company from stakeholder’s point of view and deliver results in a manner that actualizes stakeholder’s interest on a long-term basis. Create growing value for the Indian economy and the Company's stakeholders. processes. We will strive for excellence in whatever we do”. ITC’s Philosophy ITC believes in practicing ethical behavior among the corporate citizen. values their differences and helps them to experiment in the pursuit of various opportunities. Objectivity. “we do what is right. Collaboration. It respects the values of people and also encourages individuals to pursue their dreams. ITC firmly believes in the concept of Excellence with their mantra being. Apart from the interest of shareholders they also address their commitment to the nation to generate economic value. It is also deeply committed to make the company a gender friendly place for each individual while also ensuring enhancement of equal opportunities for men and women. value and overall satisfaction. Self-respect and Human-dignity. It also delivers on the commitment to its customers by consistently addressing their needs on product quality. It is constantly in the pursuit of better and newer products. ITC's Core Values The company’s Core Values are aimed at developing a performance-oriented organization that is highly customer focused and also creates value for those holding stake in it. It is ensured 25 .ITC's Vision • • Sustain ITC's position as one of India's most valuable corporations through worldclass performance. The company follows an HR policy that is regulated by Teamwork.

ITC also gives a lot of input to develop their skill and career.that the interest of the company is foremost and in this context acceptance of any kind of gifts or payments from suppliers or customers is viewed as a serious breach of company discipline. strategic decision making is done at the top level 26 . It is understood that all the directors. better work environment. i. and the way people are treated.e. Big picture. senior management and employees shall conduct themselves in an honest manner and avoid any conflict of interest. The top officials and employees of ITC believe that ITC provides them freedom at work and resources to experiment. DESIGN Looking at the structure and culture of ITC. the board and corporate management committee. The top management provides support services to the divisions. evaluating and controlling performance. Hence the top management is free from being concerned with the day-to-day operating details so they can pay attention to the long term. environment. ITC has a diversified presence in different industries and each of its businesses act as an autonomous unit which are coordinated by the top level. It acts as an external overseer. And such acts are also considered as damaging to the reputation of the company. They are consulted before a new project\system is introduced and their concerns and suggestions addressed. Employees take pride in working for ITC for its work culture. They give utmost importance to equal opportunities. The divisional managers are responsible for performance and hold complete strategic and operating decision-making authority. High standards of house keeping and hygiene are followed to ensure excellent physical working conditions. we can say that its design is based more or less on the Divisional Structure.

Also their selling has increased considerably at an average rate of 20-25% in last 6 yrs.(they didn’t enter into chocolates. Outsourcing manufacturing of confectionary items. set up new plant in Haridwar. Expanding size of work force by expanding target market Goals are clear and well understood as they are clear about the markets they want to enter in and the markets they do not want to enter. milk products) Combining various facilities to improve efficiency (manufacturing along with printing and packaging) Prices of almost all the products are at par with the competitors. At their Haridwar plant they are able to get the more production with the limited technology and machine utility which they had in 2006. Employees are always consulted before a new project/system is introduced. 2 Acquisition of resources 8 3 Planning 7 4 Productivity and efficiency 8 5 Availability of information 8 9 6 Stability 7 Skilled work force 9 27 . where there is no tax for first 5 years. acquisition of an Australian firm for new improved seeds. In 2007. 9 Launch of various new products in diverse categories in accordance to the demand of the consumer market. Timely operations are carried out to maintain freshness of the inputs (Transporters are fined in case of delay) ITC leverage human capital for competitiveness by nurturing knowledge. entrepreneurship and creativity It has a no.Effectiveness Organizational Effectiveness criteria 1 Flexibility Rating Remarks Entered into food business because of the various constraints in cigarette industry. of training programs which helps the employees gain exposure to the latest technologies and developments.

the current design of their organization is rational but as the environment is highly uncertain and intense. Leadership in ITC foods division is rational as the leader is functioning logically in accordance to the market forces. but again as the environment is highly uncertain and intense. To do this. It is also highly intense as the organization’s main strategy to achieve their goals is through extea nsive marketing and for that they need to know how their products are received in the market. he is an expert as he has made optimal use of ITC Ltd’s resources in ITC Foods’ division. Thus. The structure of the ITC Foods’ division is ‘market oriented’ because of the same reason that they are focusing into the market deeply. For example. 28 . they need high flexibility within the organization and hence should move towards an adhocratic structure. they are conducting various surveys and also they are launching their products only after a brief research of the market and trials. they need to move towards a ‘Developmental’ design. ITC’s distribution network. Also.Competing Values Framework Environment Uncertainty Intensity Culture Design Structure Leadership Leader’s role High High Developmental Adhocracy Idealistic Prime mover Rational Current Framework Favorable Framework Marketoriented Rational Expert Environment in which ITC foods division is operating is highly uncertain because of the immense competition that they are facing in each category and due to the launch of new products and flavors in each category every other day. ITC Foods’ aggressive effort to capture market share and heavy investments in manufacturing and infrastructure suggests that they are focusing mainly on both of their short and mid term goals. 29 www.rediff.Bibliography: • • • • • • • • • • • • • • • • • www.economictimes.

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