Imperial Tobacco Company of India Limited (ITC).

Presented by GROUP NO.10

Sumit Roy Anamika singh Akansha Kashish Arora Tarun Dutt Minaz humdule

ITC. Touching your life. Everyday

FLOW OF PRESENTATION
COMPANY PROFILE VISION & MISSION VALUE POSITIONING OF ITC DISTRIBUTION NETWORK SUPPLY CHAIN ANALYSIS OF FMCG PRODUCT(CIGARATTE) & PEST AND SWOT ANALYSIS OF ITC. SYNERGIES FOR ITC EFFICIENCIES IN E-CHOUPAL NETWORK COMPARISON WITH HARYALI KISAN BAZAR FUTURE OF E-CHOUPAL CONCLUSION

ITC. Touching your life. Everyday

Introduction
ITC is one of India's foremost private sector companies Has a diversified presence in Cigarettes, Hotels, Paperboards &Specialty Papers, Packaging, Agri-Business, Packaged Foods &Confectionery, Branded Apparel, Greeting Cards and other FMCG products. ITC is one of the country's biggest foreign exchange earners (US $2 billion in the last decade). April 09) No. 1 in FMCG Sector Rated as one of Indias Most Respected Companies (IMRB-Business world Survey 2006). Diversified group of companies with operations in various industry segments from cigarettes to apparels. Annual turnover is of the order US$2.4 billion

Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@

ITC. Touching your life. Everyday

VISION & MISSION

Vision: Sustain ITCs position as one of Indias most

valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders.

Mission: To enhance the wealth generating capability

of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

ITC. Touching your life. Everyday

Values
ITC's Core Values are aimed at developing a customerfocused, high-performance Organisation.
Customer Focus we are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction.

ITC. Touching your life. Everyday

POSITIONING OF ITC

ITC. Touching your life. Everyday

PRODUCT PROFILE
Branded Apparel Hotel

Stationery

Cigarett es

Package d Foods

Incense Sticks

Paperbo ards

Personal Care

Informat ion Safety Matches Technolo Agricult gy ITC. Touchingural life. Everyday your Industry

PRODUCT LINE

ITC. Touching your life. Everyday

ITC Distribution network in India

ITC. Touching your life. Everyday

ITCs Distribution channel

ITCs Distribution channel is as follows:COMPANY HUB FACTORY

Carried and forward agent

Wholesale dealer small Wholesale dealer

Retailer consumer

ITC. Touching your life. Everyday

HI-TECH SUPPLY SOLUTIONS

Thousands of small retailers in India who sell cigarettes and confectionery supplied by ITC Ltd, and who have thus far had to wait for the next arrival of the companys delivery van.
Place orders through mobile phones Vans go without knowing actual demand so after using this they can save cost as well as time. Mobility based applications can bring down the cost of operation by 2030% from the manual basis of operation

ITC. Touching your life. Everyday

ITC FMCG Supply chain

Consists of diverse categories with different priorities More than 1000+ SKUs Buying Value $68 MM Warehousing space of more than 3.5m SFT around 55+ Locations Products manufactured at 45+ plants More than 650 trucks moved every day Direct distribution from factories to Distributors. Indirect movement through RDCs Combination of Rail/Road/Sea movement within the country depending on the product type. (Target is Safer, Faster, cost effective
ITC. Touching your life. Everyday

Indian Tobacco Division (ITD)

Market leaders in Cigarettes and Tobacco business & is among Indias most profitable companies Brands owned by ITC Ltd are Wills Classic, Wills Navy Cut, Gold Flake, Bristol and Scissors ITD also sells two luxury filter brands of its parent company Benson & Hedges and 555 Four manufacturing units for cigarettes at Bangalore, Saharanpur, Kidder pore, Munger

ITC. Touching your life. Everyday

PEST ANALYSIS
Huge burden of VAT Excise duty raised by union budget by 5 % Ban on communication Luxury tax in 10 states Smuggling 100% FDI allowed Bidee : cigarette ratio-10:1 Profit margin is high Other forms of cheap tobacco intake

POLITIC AL

ECONO MICAL

SOCIO CULTUR AL

TECHNICAL

State-of-the-art factories Cheap labour supply Development of IQMS Adapting other concepts like QC,TQM, KSS, 5 S, 6 sigma
ITC. Touching your life. Everyday

Becoming status symbol Companions mounted by W.H.O. Changing attitudes towards tobacco May 31 is no tobacco day Change in life style

SWOT ANALYSIS
Strength Cigarette market is 22,000 cr and ITC has lions share in it Strong brand recognition and product portfolio Distribution network Management Opportunity Low per capita consumption Of personal care products Rural Market E-Choupal Filter cigarette segment of less than 60mm size Weakness Dependence on tobacco revenues Negative Connection of Tobacco

Threat Competition both Domestic & International Increasing Tax on cigarettes Excise duty on unfiltered cigarettes less than 60mm in length was increased 387% last year Hike was 142% for those between 61mm and 70mm long. Regulatory restrictions on cigarettes ITC. Touching your life. Everyday Ban on smoking

CONFRONTATION
NAVY CUT,CLASSIC,INSIGNIA,INDIA KINGS,CAPSTEN,GOLD FLAKE,SISSORS,SILK CUT,BRISTOL,BERKELEY
Red & White Super Cavender Magna 4% Panama Plain 4% 4% Four Square Premier 5%

Four Square Specia 5%

Select Filter 5% Marlboro Regular 6%

GOLD FLAKE PREMIUM 29%

GOLD FLAKE KINGS 4%

Silk Cut Premium 11% Wills Navy Cut 7% Silk Cut Kings 5% IK Regular (Rich Gold) B&H Light 1% 2% Classic Regular 4% Classic Ultra Mild 4%

ITC. Touching your life. Everyday

Diversification
ITC over the years has been investing cash flows from its cigarette business into various lucrative segments like foods, personal care, hotels and paper. With the paperboard division coming out of a major capex cycle and a reduction in losses from FMCG-others division from FY10E, we expect the non-cigarette businesses to become self-sufficient. The agriculture division continues to provide a strong support as an excellent raw material sourcing base. Hotels segment though is likely to register slower growth in FY10E due to economic slowdown and terror attacks.

ITC. Touching your life. Everyday

Per Capita Adult Cigarette Consumption (Sticks)

1662 1753

1190

561

488 141

USA

China

Pakistan

Nepal

India

World Avg.

Source : Based on Cigarette consumption data(2003) from World Cigarettes,ERC Group plc.
ITC. Touching your life. Everyday 18

CONT.
It has 3 contract manufacturers (OCMs)Reliable Cigarette and Tobacco IndustriesPrivate Ltd. (RCTI) Asian Tobacco Company (ATC )Hyderabad Deccan Cigarette Industries(HDC) Huge distribution network with 19 marketing branches and 33 Godowns across nation Also caters to the exports mainly in United States and Middle-Eastern countries

ITC. Touching your life. Everyday

DISTRIBUTION NETWORK(Tobacco Div.)

Bangalore Calcutta Saharanpur Munger

Factories (4)

GODOWNS (19)

BRANCHES (19)

WHOLESALE DISTRIBUTORS (60 PER BRANCH)

Information Goods

RETAILERS

SECONDARY WHOLESALERS

ITC. Touching your life. Everyday

Role of Each Member

Factories Supply to 18 godowns Godowns & Branches Manage by C&F agents getting monthly remuneration No rent paid by ITC one branch 60 WDs , 5 AMs and 20 Area Executives Wholesale Distributors(WDs) Margin 2% of sales Appoints secondary Wholesalers

ITC. Touching your life. Everyday

PHYSICAL DISTRIBUTION
Demand Estimation collaborative forecasting( Sales force with dealers) Forecast based on last month sales Production plan made according to forecast Delivery to C & F agents within 7 days CFAs deliver goods to dealers on the basis of the branch office route plan Factory CFAs- Trucks CFAs Dealers Small Vehicles

ITC. Touching your life. Everyday

ITCS AGRI COMMODITY DIVISON

Farm linkages in 14 states covering Soya, Wheat, Marine products, Coffee etc. Focus on value added agri commodities Unique CRM programme in commodity exports Leveraging IT for the transformational e-Choupal initiative

Rural Indias largest Internet-based intervention

Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million farmers

Distinctive sourcing capability for ITCs Foods business

THE PREDICAMENT OF INDIAN FARMERS

Low Risk Appetite

Low Margins

Caught in a vicious cycle of underdevelopment

Low Investment

Low Value Addition

Weak Market Orientation

Low Productivity

OTHER E-CHOUPAL INITIATIVE

Company Logo

Companies using e-Choupal network

Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008

Critical Analysis of ITCs Supply Chain

Company Logo

Stake holder Analysis

Primary Stakeholders
Farmer Community

Interest
Access to information Empowered decisions Improved agriculture Economic benefits through lower transaction costs and process efficiencies Served with dignity Knowledge bundled sale of goods and services Co-opted in product design Hope for a brighter future Lower procurement costs Direct interaction with farmers - Control on quality & supply security Low cost distribution channel Access to market intelligence Gain access to global markets through ITC and commission to compensate some of the loss revenue

ITC

Commission Agents (Kachha Adatiyas) & Pakka

ITC e-Choupal Footprint

CONCLUSION
ITC promoting their brands through advertisement campaign as well as door to door promotion. ITC is also focusing on Retailers and Wholesalers to promote their brand. The demand of their product in very low, because people dont know about their brands very well. ITC knows their strength and weakness in the personal care market, so they are applying new concept to overcome their weaknesses. ITC now offering more margins, exiting offers and long credit period to retailers and wholesalers.

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ITC. Touching your life. Everyday

THINK BEFORE SMOKING.

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