STRATEGIC

MANAGEMENT OF ITC
INDIAN TOBACCO COMPANY LIMITED
INDEX
 INTRODUCION
 24 Aug1910- ITC incorporated under the name of
‘Imperial Tobacco Company of India Limited’.
 In 1974 the company name was changed to ITC Limited.

 One of India’s most Admired and Valuable companies -

Market Capitalisation: ~Rs. 3.2 lakh crores .
 A US$ 10.8 billion enterprise by Gross Sales Value -
60% of net revenue from non-Cigarette segments .
 10 year Value Addition ~ Rs. 3.5 lakh crores (US$ 59
billion). - Among the top tax payers in the country .
 Supported creation of ~6 million sustainable
livelihoods.
 Foreign exchange earning in the last 10 years; US 7.2
billion – of which Agri exports constituted ~56%.
Product Category
Food And Food Products
MARKETING STRATERGY
 Segmentation, Targeting, Positioning
in the Marketing Strategy of ITC-
 ITC as a brand caters to the needs of a diverse range of
consumer segments which is done by segmenting the
population based on similar sorts of characteristics.
 ITC uses a mix of geographic demographic and 
psychographic segmentation variables such as
profession, income class, gender, age, region, behavior
etc.
 ITC uses selective and differentiated targeting strategy
 is used by the company for offerings of the different
group of companies.
 BCG Matrix in the
Marketing strategy of ITC –
PORTER FIVE FORCE ANALYSIS
Value Chain Analysis
  Primary Activities
The primary value chain activities of ITC Limited India
First are directly involved in producing and selling the product
to targeted customers. Analysis of primary value chain
activities can improve the performance of ITC Limited India
First as explained below.
 Inbound Logistics
It is important to develop strong relationships with suppliers as
their support is necessary to receive, store and distribute the
product. Without analysing the in-bound logistics, ITC Limited
India First can face various challenges in product development
phases. Analysis of in-bound logistics requires a company to
focus on every aspect of transformation from raw material to
finished product. Some examples of inbound logistics are
retrieving raw material, storing the inputs and internally
distributing the raw material and components to start
production.
Operations
The importance of analysing operational activities raises when
raw material arrives, and ITC Limited India First is ready to
process the raw material into the end product and launch it in the
market. Some examples of operational activities are machining,
packing, assembling and testing. Equipment repair and
maintenance also falls into this category.
It includes both- manufacturing and service operations. Analysis
of operational activities is important for improving productivity,
maximising the efficiency and ensuring the competitive success of
ITC Limited India First. The increased productivity can help ITC
Limited India First to achieve consistent economic growth,
increase profitability and set a powerful basis for competitive
advantage.
 Outbound Logistics
Outbound logistics include the activities that deliver the
product to the customer by passing through different
intermediaries. Some outbound logistics activities are
material handling, warehousing, scheduling, order
processing, transporting and delivering to the destination.
ITC Limited India First can analyse and optimise the
outbound logistics to explore competitive advantage sources
and achieve its business growth objectives.
Because, when outbound activities are timely managed with
optimal costs and product delivery processes put a minimum
negative effect on the quality, it maximises the customer
satisfaction and increases growth opportunities for the firm.
ITC Limited India First should pay specific importance to its
outbound value chain activities when its offered products are
perishable and require quick delivery to the end customer.
 Marketing and Sales
At this stage, ITC Limited India First will highlight the benefits and
differentiation points of offered products to persuade the customers that
its offering is better than competitors. Only producing a high quality
product at affordable costs and distinctive features cannot create value
until ITC Limited India First invests on the marketing and sales activities.
The sales agents and marketers play an important role here.
Some examples of ITC Limited India First's marketing and sales activities
are- sales force, advertising, promotional activities, pricing, channel
selection, quoting and building relations with channel members. The
company can use the marketing funnel approach to structure its marketing
and sales activities. The marketing strategies can either be push or pull in
nature, depending on the ITC Limited India First’s business objectives,
brand image, competitive dynamics and current standing in the market.
Effective and wisely integrated marketing activities can develop the
brand equity of ITC Limited India First and help it stand out from the
competition. However, ITC Limited India First must avoid making false
commitments about product features that cannot be fulfilled by the
production department. It indicates the need to ensure coordination
between different value chain activities.
 Services

The pre-sale and post-sale services offered by the ITC

Limited India First will play an important role in
developing customer loyalty. The modern customers
consider post-sale services as important as marketing
and promotional activities. The power of negative e-
WOM due to poor support service cannot be undermined
in the current technologically advanced era. The
company must analyse its support activities to avoid
damaging brand reputation, and instead use it as a tool to
spread positive word of mouth due to quick, timely and
efficient support services.
 SECONDARY ACTIVITIES
THE SUPPORT ACTIVITIES PLAY AN IMPORTANT ROLE IN
COORDINATING AND FACILITATING THE PRIMARY VALUE CHAIN
ACTIVITIES. ITC LIMITED INDIA FIRST CAN ALSO BENEFIT FROM
ANALYSIS OF ITS SUPPORT ACTIVITIES AS EXPLAINED BELOW.

 Firm infrastructure
The firm infrastructure denotes a range of activities, such
as- quality management, legal matters handling, accounting,
financing, planning and strategic management. Effective
infrastructure management can allow ITC Limited India
First to optimise the value of the whole value chain. ITC
Limited India First can control the infrastructure activities
(or commonly called overhead costs) to strengthen the
competitive positioning in the market.
  Human resource management
ITC Limited India First can analyse human resource
management by evaluating different HR aspects, including-
recruiting, selecting, training, rewarding, performance
management and other personnel management activities.
The effective HR management can allow ITC Limited India
First to reduce competitive pressure based on motivation,
commitment and skills of its workforce. The company can
also achieve its cost minimisation objectives by analysing
hiring and training costs with their relative return. The
heavy dependence of ITC Limited India First on
employees' talent will increase the importance of this value
chain support activity.
 Technology development
In a modern, technological advanced era, almost all value
chain activities depend on technological support. The
technological integration in production, distribution,
marketing and human resource activities requires ITC
Limited India First to realise the importance of technology
development. It can be divided into product and process
technological development activities. Some examples are-
automation software, technology-supported customer
service, product design research and data analytics. The
research and development department of ITC Limited India
First is classified in this category.
 Procurement
The procurement in value chain denotes the processes
involved in purchasing the inputs that may range from
equipment, machinery, raw material, supplies, raw
material and other items necessary for producing the
finished product. Due to its linkage with multiple value
chain activities, ITC Limited India First should carefully
consider its procurement activities to optimise the
inbound, operational and outbound value chain.
Thank you.