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Imperial Tobacco Company of India Limited (ITC)
Imperial Tobacco Company of India Limited (ITC)
Presented by
Anuja Jain
Arihant Darda
Arun Chahar
Ashwini Jain
Charu Pahwa
ITC. Touching your life. Everyday Mohit Rathi
INTRODUCTION
• ITC Limited which previously stood for ‘Imperial Tobacco Company
one of India's foremost private sector companies with a market
capitalization of nearly US $ 18 billion and a turnover of over US $
4.75 billion.
• ITC's diversified status originates from its corporate strategy aimed at
creating multiple drivers of growth anchored on its time-tested core
competencies: unmatched distribution reach, superior brand-building
capabilities, effective supply chain management and acknowledged
service skills in hoteliering.
• continues in its traditional businesses of Cigarettes, Hotels,
Paperboards, Packaging and Agri-Exports, it is gaining market share in
its nascent businesses of Packaged Foods & Confectionery, Branded
Apparel and Greeting Cards.
ITC. Touching your life. Everyday
Contd..
• ITC's wholly owned Information Technology subsidiary, ITC
InfoTech India Limited, is pursuing emerging opportunities in
providing end-to-end IT solutions, including e-enabled services
and business process outsourcing.
• ITC's Agri-Business is one of India's largest exporters of
agricultural products.
• ITC's Agri-Business is one of India's largest exporters of
agricultural products.
Stationery Cigarette
s
Package Incense
d Foods Sticks
Paperbo Personal
ards Care
Informat
ion Safety
Technolo Matches
gy Agricult
ural
Industry
ITC. Touching your life. Everyday
Strategy of Organisation to manage diversity of
Portfolio
Executive Director
Anup Singh K.vaidyanath
2. ITC's globally recognised e-Choupal initiative is the world's largest rural digital infrastructure
benefiting over 4 million farming families.
3. ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an
estimated 35 million person days of employment among the disadvantaged.
4. ITC's Watershed Development Initiative brings precious water to nearly 35,000 hectares of
dry lands and moisture-stressed areas.
Healthcare services have develop water and forest ITC offers facilitation to
been provided to over resources to enhance soil farmers to form agri-
45,000 mothers-at-risk fertility, business societies, pool
and children below 5 adopt soil and water knowledge and
Women join their ITC management practices, resources, improve
supported self-help productivity and quality
the teachers at village
cow artificially ITC Supplementary Over 8 years, ITC has
inseminated at ITC’s Learning Centre assisted nearly 2,700
cattle development centre persuaded parents to families to construct their
send children to evening own sanitary units.
ITC assists rural families
to construct low cost coaching classes at the apply superior farming
sanitary units for their Centre
ITC. Touching your life. Everyday methods to improve
homes quality and quantity of
farm yields.
Pest analysis
• Huge burden of VAT
• Excise duty raised by union budget by 5 %
• Ban on communication
POLITIC • Luxury tax in 10 states
AL
• Smuggling
• 100% FDI allowed
• Bidee : cigarette ratio-10:1
ECONO • Profit margin is high
MICAL • Other forms of cheap tobacco intake
• Becoming status symbol
SOCIO - • Companions mounted by W.H.O.
CULTUR
AL • Changing attitudes towards tobacco
• May 31 is no tobacco day
• Change in life style
• State-of-the-art factories
• Cheap labour supply
TECHNICAL
• Development of IQMS
ITC. Touching your life. Everyday
• Adapting other concepts like QC,TQM, KSS, 5 S, 6 sigma
SWOT Analysis
Strength Weakness
•Cigarette market is 22,000 cr and ITC has •Dependence on tobacco revenues
lion’s share in it • Negative Connection of Tobacco
•Strong brand recognition and product
portfolio
•Distribution network
•Management
Opportunity Threat
•Low per capita consumption •Competition both Domestic & International
Of personal care products •Increasing Tax on cigarettes
•Rural Market •Excise duty on unfiltered cigarettes less than
•E-Choupal 60mm in length was increased 387% last year
• Filter cigarette segment of less than 60mm •Hike was 142% for those between 61mm and
size 70mm long.
•Regulatory restrictions on cigarettes
•Ban on smoking
ITC. Touching your life. Everyday
TOWS MATRIX
Strengths Weaknesses
Opportunity Threat
•Increasing retail market •Bargaining power of suppliers
•Rural market •Bargaining power of customers
•Increasing e-commerce •Smuggling
•Ban on smoking
Porters 5 forces
High threats of
High rivalry
new entrants
Rs crs
Half Year Half Year Goly
ended ended (%)
30.09.2008 30.09.2007
Cows Dogs
FMCG-Cigarettes •Branded apparel
•Packaged foods
Wholesale dealer
Retailer
consumer
P1
P2
P3
ITC. Touching your life. Everyday
POSITIONING
In 70’s they have positioned themselves by
saying:-
• “For the gracious people”
• “A touch of Gold”
• "A tribute to the gracious people”
It is still differentiating itself on the purity
and quality of its experience.
• The brand stands for a celebratory attitude.
“Celebrate the feeling” is the new message
ITC. Touching your life. Everyday
COMPETITOR ANALYSIS
The cigarette market in India has 3 players
• Godfrey Phillips India (GPI), a Philip Morris affiliate,13%
of market share
• Vazir Sultan Tobacco (VST), a BAT affiliate, 13% of the
total market share
• Golden Tobacco Company (GTC) with 8% of the market
share.
Domestic competitors
• Kanhayya tobacco
• MR tobacco
• Sapna enterprises
• Sudarshan tobacco
• STRATEGY
• STRUCTURE
• SYSTEM
• STYLE
• SKILLS
• STAFF
• SHARED VALUES
ITC. Touching your life. Everyday
CONFRONTATION
Select Filter
5%
Marlboro Regular
6%
• 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.
1753
1662
1190
561
488
141
Gold flake
Profit Before Tax 28083757
Provision For Taxi ncluding Tax 141700
Profit After Tax 27942057
Add:profit Brought Forward 15605975
From Previous Year
Surplus Available For Appropration 43548032
Tranffered To General Reserve --------
Balance Carried Forward 43548032