Touching your life everyday !

ITC LIMITED
Founded on
Chairman Employees Head Quarters

24 August 1910
Yogesh Chander Deveshwar 26,000 (2009) KOLKATA

ITC is one of India's foremost private sector companies with a market capitalization of over US $ 22 billion and a turnover of US $ 6 billion. ITC also ranks among Asia's 50 best performing companies compiled by Business Week.

ITC is an outstanding market leader in its traditional businesses of  Cigarettes,  Hotels,  Paperboards,  Packaging,  Agri-Exports. It is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care Stationery.

The ITC leadership

 Corporate Governance adopted by the Company,

leadership within ITC is exercised at three levels.  1.Directors  2. Corporate Management Committee  3. Divisional Management Committee (DMC)

Directors
The Board of Directors at the apex, as trustee of shareholders, carries the responsibility for strategic supervision of the Company. Corporate Management Committee(CMC): The strategic management of the Company rests with the Corporate Management Committee comprising the whole time Directors and members drawn from senior management. Divisional Management Committee (DMC): DMC is responsible for and totally focused on the management of its assigned business

ITCs corporate strategies are :

 Create multiple drivers of growth by developing a

portfolio of world class businesses that best matches organisational capability with opportunities in domestic and export markets.  Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology.  Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality.  Ensure that each of its businesses is world class and internationally competitive.

Contd.
 Enhance the competitive power of the portfolio through

synergies derived by blending the diverse skills and capabilities residing in ITCs various businesses.  Create distributed leadership within the organisation by nurturing talented and focused top management teams for each of the businesses.  Continuously strengthen and refine Corporate Governance processes and systems to catalyse the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

VISION

MISSION

VALUES
 Values  ITC's Core Values are aimed at developing     

a customer-focused, 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. WORKING FOR YOU. WORKING FOR Society

WHERE COMPANY STANDS?

 ITC is one of India's foremost private sector companies with a market

capitalization of nearly US $ 14 billion

 ITC is rated among the World's Best Big Companies, Asia's 'Fab 50'

and the World's Most Reputable Companies by Forbes magazine,


 ITC ranks among India's `10 Most Valuable (Company) Brands  ITC has a diversified presence in Cigarettes, Hotels, Paperboards

& Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products

ITC

FMCG

Hotels

Agri Business, Leaf Tobacco, Agri commodities

Paper board, paper & Packaging

Cigarettes

Personal care

Packaged Food products

swot
99 years tradition Huge capital Distribution Network Interlinked Business
Image As Company Tobacco

Apart from FMCG other SBU are in loss

Rural Exposures Can strengthen FMCG Coordination in Business Units

Govt. ban/tax increase Domestic/ international Competition

PESTL
Political (incl. Legal) Environmental regulations and protection Tax policies Economic Economic growth Social Income distribution Technological Government research spending

Interest rates & monetary Demographics, Population Industry focus on policies growth rates, Age distributiontechnological effort Labor / social mobility New inventions and development Rate of technology transfer

International trade regulations Government spending and restrictions Contract enforcement law Consumer protection Unemployment policy

Lifestyle changes Work/career and leisure attitudes Entrepreneurial spirit Education Fashion, hypes Health consciousness & welfare, feelings on safety Living conditions

Employment laws Government organization / attitude Competition regulation

Taxation

Life cycle and speed of technological obsolescence Energy use and costs (Changes in) Information Technology (Changes in) Internet (Changes in) Mobile Technology

Exchange rates Inflation rates Stage of the business cycle Consumer confidence

Political Stability

Safety regulations

100%

80%

60%

40%

20%

0% 100%

-20%

90%

80% FMCG OTHER 7% 30.056 paper boards 85% 26.471

70%

Agri Bus. 30% 38.46

60%

Hotels paper boards

50% Hotels 2% 9.355 cigarettes 85% 75.568

FMCG OTHER Agri Bus. cigarettes

40%

30%

20%

10%

0%

5 Forces Model
Threat of New Entrants Bargaining Power of Suppliers Rivalry Among Existing Competitors Threat of Substitutes

Bargaining Power of Customers

Purpose of 5 Force Analysis

 The five forces are environmental forces that impact on a companys ability to compete in a given market.  The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.

Threat of New Entrants

Economies of Scale - Not Easy to Achieve - positive Product Differentiation Requires huge R&D - positive Capital Requirements - high - positive Switching Costs - low - negative Access to Distribution Channels - Not Easy - positive Cost Disadvantages Independent of Scale - more positive Government Policy Are More - positive

Bargaining Power of Suppliers

Supplier industry is dominated by a few firms Suppliers products have few substitutes Buyer is not an important customer to supplier Suppliers product is an important input to buyers product Suppliers products are differentiated Suppliers products have high switching costs Supplier poses credible threat of forward integration

Bargaining Power of Buyers Buyer groups are likely to be powerful if:

Buyers are concentrated or purchases are large relative to seller s sales Purchase accounts for a significant fraction of supplier s sales Products are undifferentiated Buyers face few switching costs Buyers industry earns low profits Buyer presents a credible threat of backward integration Product unimportant to quality Buyer has full information

Threat of Substitute Products

Keys to evaluate substitute products:
 Products with improving price/performance tradeoffs relative to present industry products

Rivalry Among Existing Competitors

Intense rivalry often plays out in the following ways:

Using price competition Staging advertising battles Increasing consumer warranties or service Making new product introductions

Cont d
Occurs when a firm is pressured or sees an opportunity
Price competition often leaves the entire industry worse off Advertising battles may increase total industry demand, but may be costly to smaller competitors

Cutthroat competition is more

likely to occur when:

 C Numerous or equally balanced competitors

Slow growth industry High fixed costs High storage costs Lack of differentiation or switching costs Capacity added in large increments Diverse competitors High strategic stakes High exit barriers

5 Force Model for ITC Fmcg

Bargaining Power supplier is high

Bargaining Power of Buyer is Very High

Rivalry Among the competitors is very High

Threat of substitutes is Moderate or High

Threat of New Entrants is Low

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. qDomestic competitors Kanhayya tobacco MR tobacco Sapna enterprises Sudarshan tobacco qITC still attains a gigantic market share of 66

Competitor Analysis
 HUL:Net sales of the company grew by 19.7%

y-o-y to Rs 4027.9crore driven by 22.5% growth in FMCG HPC business ,  17.5% growth in FMCG Foods business and underlying volume growth of 7%.  P&G
 Parle  Britannia

Marketing Conglomerate Diversification

ITC

FMCG

Hotels

Agri Business, Leaf Tobacco, Agri commodities

Paper board, paper & Packaging

Cigarettes

Personal care

Packaged Food products

FMCG

Apparels

Food

Personal Care

Stationary & Sticks

 Wills Classic
Wills Sport

Wills Clublife

Wills Signature John Players

Miss Players

Styling life for upper middle class

 ITC's Packaging & Printing Business is THE COUNTRY'S

LARGEST CONVERTOR OF PAPERBOARD into packaging. It converts over 35,000 tonnes of paper and paperboard per annum into a variety of value-added packaging solutions for the food & beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. It has also entered the Flexibles and Corrugated Cartons business.
 The Division, which was set up in 1925 as a strategic backward

integration for ITC's Cigarettes business, is today India's most sophisticated packaging house. State-of-the-art technology, world-class quality and a highly skilled and dedicated team have combined to position ITC as the FIRST-CHOICE SUPPLIER OF HIGH VALUE ADDED PACKAGING.

OPERATIONS

ANSOFFS MARKET MATRIX

Existing Prod. Existing Market Market Penetration New Product Product Development

New Market

Market Development

Diversification

New Product Launchings

PRODUCT PORTFOLIO

Affluent

Aspiring

Starving

Target Market
Urban (High Income ) 'Essenza Di Wills' 'Fiama Di Wills' 'Vivel Di Wills' Superia' Urban & Semi-urban (Upper & middle class) Rural

POSITIONING
In 70s 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
     

7 S FOR ITC

BACKWARD INTEGRATION
 ITC PRINTING & PACKAGING IN 1925

& NOW ITC INFOTECH

FORWARD INTEGRATION
 Classmates  E-choupal  Sunfeast

Competitive Tactics
 FIRST MOVER: Cigarettes, HOTELS, Echoupal  EARLY IMMITATERS: PAPER PACKAGING ITC INFOTECH.  LATE MOVERS: FMCG, FOODS

Promotion Strategy
 Push Strategy: In Popular category with innovative incentive schemes to distributors.  Pull strategy: 1) Luxury products Ex. Wills Signature, Essensa 2) Strong Brands Ex. Pasta, MTR, BINGO

Pricing Strategy
 Competitive reference pricing in mass products or popular category

 Value pricing for luxury products.

Growth strategies
 Synergy of all SBU.  Intra SBU Communication.  Emerge as clean in practices in CSR, Corporate Governance & Sustainability.  Outsourcing

R & D
 T ITC RESEARCH AND DEVELOPED 

  

FACILITIES RAJAHMUNDRY IN AP COVER ALL ASPECTS OF TOBACCO CROP CULTIVATION. ITS COLLABORATION WITH THE CENTRAL TOBACCO BOARD RESEARCH INSTITUTE AND TOBACCO BOARD ITC PIONEERED FCV TOBACCO CULTIVATION IN INDIA AND INTRODUCED THE BURLEY AND HDBRG VARIETIES.

FINANCIAL OBJECTIVES
total
300000 260557 250000 200000 150000 total 100000 50000 0 FY-09 FY-10 FY-11 231435 296862

350000

330581

300000

250000

231728

200000

189010 FY-09 FY-10

150000

FY-11

100000 42718 12047 0 Cigarettes other total fmcg hotels agri business paper &paper boards total 48406

50000

38400

THANK YOU