Strategy Analysis of ITC

ITC Limited is one of the first big national firm in Indian to have undertaken significant
diversification and restructuring as a part of its business strategy. As students of management it makes
us curious about the conditions that guided the company to take such an effort. The company has
made its presence felt in the three most important sectors of the Indian economy agriculture,
manufacturing and services. The multi-business enterprises corporate strategy to be significant player
in the FMCG, Paperboards & Packaging, Agri-Business, Hotels and Information Technology is
noteworthy.
ITC has over a short span of time managed to build brands especially in the FMCG sector which have
a significant standing. Some of these include Aashirvaad, Sunfeast and its sub-brands Dark Fantasy,
Delishus, Farmlite, Yumfills, Moms Magic and Bounce; Bingo!, YiPPee!, B Natural!, Candyman.
The company aspires to be the countrys top FMCG player and reach annual revenue of Rs 1,00,000
only from FMCG sector by the year 2030.
The company has also made sizeable investments in the R&D to drive innovation and gain a
maintainable competitive advantage. Its focus is on the products in nutrition, health and well-being.
The Agri sciences research focus is on developing new crop varieties having better quality and higher
yield.
In the area of the social and environmental contribution, ITC has actively strived to improve the
quality of life of the weaker section of the society. Some large-scale programmes such as ITC eChoupal, Integrated Watershed Development, Skilling & Vocational Training, Health & Sanitation
programme have made a significant impact.
The companys strategy to generate profits from high volume and low margin businesses which are
matured or have reached growth saturation would be interesting to us. This is due to the simple fact
that in spite of venturing in so many diverse businesses its the Tobacco business of ITC which still
earns the chunk of the revenue. We would thus like to learn about how the company went about its
diversification strategy by determining the restructuring in its business and ensuring the sustainability
and maintaining growth.

ITCs multipronged social investment programmes help build capacity of the weakest in society while
its pursuit of a low carbon growth strategy contributes to combatting climate change. ITCs wide
spectrum of sustainability initiatives and social investments is manifest in several large-scale
programmes covering 166 districts in 26 states. The celebrated ITC e-Choupal initiative has
empowered 4 million Indian farmers. Integrated Watershed Development programmes bring soil and
moisture conservation to nearly 2,60,000 hectares.

ITC Limited was the first large Indian transnational firm to undertake significant
diversification and restructuring as part of its corporate strategy. The
diversification strategy was designed by visionary leaders and professional
managers from within. The strategy required to be supported by generating
profits from low margin high volume traditional businesses that were close to
growth saturation and maturity. The company was required to set the rate of
engagement with its diversification strategy by determining the extent to which
the deep restructuring in its traditional businesses was feasible and sustainable.
The case brings out hidden dimensions of power conflicts that strategy
formulation and implementation involve and raises questions about the alleged
inflexibility of labour markets, the interface between product markets and
internal labour markets and management processes.