Porter’s five forces

Bargaining power of suppliers(low):ITC consumer product faces low supplier power as it deals in
huge volume of goods and have direct access to its distribution network. Due to constant pressure of taxes
on tobacco, ITC has created a separate division for distribution. Earlier distribution was a part of firms
cigarette division. ITC’s innovation e-choupal also helped the firm in a way to have direct access to
products and faster delivery.

Threat of substitutes(low): The threat of substitutes were comparatively low as ITC strong
consumer base and brand power. Its competitor Godfrey Philips prices were strategically kept
low to capture market share of gold flake. In order to fight this, ITC launched a similar variant
which was cheaper and smaller in size. ITC’s diversification strategy has further helped the
firm in keeping its hold over market share.ITC has launched 20 flavours of bingo which was
comparatively huge in number than its competitors lays and Frito Lays. It also launched new
flavours for its yippee noodles which is giving tough competition to Nestlé’s maggi.

Threat from new entrants(low):.FMCG sector is already dominated by brands like HUL, P&G,
Britannia ,Nestle, Patanjali and ITC.. Also because the capital requirement in this sector is high.
Further, these companies have maintained a direct and strong control over its distribution
network.which makes it difficult for the new player to invest in this sector .One of the many reasons is
also product differentiation as this companies has already launched variety of products and its variants
in different price segments.

Bargaining power of buyer(low): Bargaining power of buyer is low as the nature of product is
addictive.

Competitive rivalry(high): There is a tough competition between established brands like

HUL, Parle, Nestle etc over price.Every industry indulging in product differentiation are
providing customers with numerous varieties to switch to other products. Therefore, price
sensitivity plays a major in increasing rivalry between competitors in this sector.

RECOMMENDATIONS

 Less advertising for Ashirwaad Aata and dark fantasy can be done as they sell well even when
they are not advertised, thereby saving a lot on advertising expense.
 Packaging for displaying engage Deo (Hangers) should be made available in all the small
shops as well, it should be made in such a way that they can hang and advertise the deo.
Otherwise they start hanging it in other Company’s packaging material like Pass-Pass or KS
deo.
 Focus should be given on advertising B Naturals, sampling them might increase sales in Big
Bazaar/ Spencers as done by their competitors like Real, Tropicana etc..
 Coordination between the person giving the branding and the distributors giving the products
to be placed on shelf for facing, should be proper in order to ensure proper display and has to
be looked into.
  For increasing the sale of the Dermafique products, free samples of the product should be
given with already well selling ITC products like Vivel or Fiama di Will instead of giving
snoffers like one-on-one on Dermafique itself.

BCG MATRIX

STAR QUESTION MARK

M  Agri business  FMCG- FOODS
a  Hotels
r  Paperboards &
k packaging
e
t
s
h CASH COW POOR DOGS
a
 FMCG- cigarettes  ITC infotech
r
e

Market Growth