ITC LIMITED : INDIA

FIRST A CASE STUDY PRESENTATION BY

JYOTI NEGI 2023BLP024
RAHUL JALAN 2023BLP048
SAURABH SINGH 2023BLP060
SHYAMSUNDAR 2023BLP067
 1. Introduction

2. Performance of ITC over the years

Table Of 3. Contribution of the various chairmen over the years

Content
4. Strategic and organizational challenges faced by
ITC in 2012

5. As a chairman of ITC, what could have been done?

6. Resources of ITC which would help it to achieve

the competitive advantage
Introduction
• ITC started its operations in 1910.

• Started the first Cigarette manufacturing factory in Munger, Bihar.

• After India’s independence, taxes were levied for Cigarettes in 1948.

• Company’s market share reduced to less than 40% after independence

from 70% before independence.

• Introduced filter Cigarettes in 60’s

• In 1970, changed the name of the company due to the attack on

nationalist view.
Contribution of various Chairmen over the
years

Ajit Narain Haksar (1969 – 1983)

• Two strategy to win over people of India: earn foreign exchange,
enter area where government find difficult attracting investment.

• Founded Market research department in ITC.

• Diversification to Hotels, Marine foods, paperboards

• Foreign exchange regulation which controlled BAT dominance

• Marine foods failure

Contribution of various Chairmen over the
years
Jagdish Sapru (1983 – 1991)
• Change in custom and excise duty - company paid totally 850 crores.

• Competition from Flair.

• Increase in cigarette profit - tax started charging on length instead of

price
.
• Because of tax evasion the image got tarnished which lead to diversify
into agri business.

• Entered into financial service sector in 1980s- hired purchase lease

agreement

• Good relation between ITC and BAT

Contribution of various Chairmen over the
years
Krishanlal Chugh (1991- 1995)
• In financial services entered into every segment- Banking, brokerage,
NBFC(non-banking financial services, fund management, insurance

• ITC export business (ITC global), separate 100% subsidiary with Singapore
office achieved impressive sales of Rs. 380 crores and was granted approved
international trader status

• BAT alleged financial irregularities against chugh and demanded his

resignation

• Bat opposed every plan of ITC diversification

• Bitter relations further increased between BAT and ITC

• BAT wanted to separate CMD position, but Board rejected and appointed YC
as CMD
Contribution of various Chairmen over the
years
Yogesh Chander Deveshwar ( Since 1995)

• ITC global went under liquidation

• ITC classic (financial service) incurred huge operational losses, exit cost of
Rs. 800 cr.

• BAT started creating atmosphere against ITC

• ITC image tarnish, Chug and Sapru arrested by ED for under invoicing

• ITC started focus on 3 aspects- Hotels, Packaging, Tobacco

• New business- Lifestyle retailing, Wills Lifestyle and ITC Infotech

Contribution of various Chairmen over the
years
Yogesh Chander Deveshwar ( Since 1995)
• Capital Investment in Paper industry to 1lakh tonne per annum- 1st in India.

• Most significant move was the setting up of e-sourcing hubs, branded as “e-
choupals”.

• Received many awards and recognitions for triple bottom line performance.

• ITC infotech offered off-shoring solutions in four verticals-Banking, consumer

packaged goods & retail, hospitality & transportation, manufacturing and
travel, financial services and insurance.

• ITC entered FMCG, branded foods and personal care.

• Introduction of “classmate” brand for Educational and Stationery Products.

Performance of ITC over the years
Strategic and organizational challenges faced by ITC in
2012
• They were in the hotel business for the past 25 years, but their
presence was still missing in metro cities.

• FMCG loss (2000 crores) – heavily dependent on cigarette business.

• Personal care products – still in growing stage.

• Conflicts with BAT

As a chairman of ITC, what could have been done?

• Have to expand the hotel business in all the metro cities of India.

• Instead of concentrating only in cigarette business, have to improve

business in other segments as well.

• Ensure the growth of personal care products.

• Improve the relationship with BAT.

• Can ask for deadline of 5 years to improve the business with other
products.
 Pro – Farmers image
E sourcing hub named e-Choupal
eliminated middlemen and helped farmers
to directly reach out through technology.

Resources of ITC which Educational sector donation

would help it to achieve the For every four notebooks people buy, ITC
competitive advantage contribute 1 Rupee to rural education

100 years legacy

Deeply rooted in Indian culture due to the
brand reputation

Resources of ITC which
would help it to achieve the
competitive advantage
Promoting their products using their hotel
chains
Using their own soaps and shampoos and food
products in their hotels for promotion
Rural Linkage and Distribution Network
Start promoting brands like Bingo the way cigarettes
were done initially, like showing the different taste it
has (the rural awareness drive they conducted for
promoting cigarettes)
Wills Lifestyle
Three approach:
• Availability
• Visibility
• Freshness
THANK YOU