ITC LIMITED

Tufail Khan
PGPM- Business Strategy

Introduction
Type: Public (BSE:ITC) Founded: 24 August 1910 Radha Bazar Lane, Kolkata, India Headquarters: Kolkata, India Key people: Yogesh Chander Deveshwar, Chairman K. Vaidyanath, Director, Partho Chatterjee, CFO Industry: Tobacco, foods, hotels, stationery, greeting cards Products: Cigarettes, packaged food, hotels, apparel Employees: over 25,000 (2009) Website: http://www.itcportal.com/ Forbes Global 2000 List: 987 rank (2009)
Sales (Rs.crore):15388.11 Profits (Rs. million): 32636 Market Value($ billion): 13.48

From a leading cigarette manufacturer to an umbrella group that offers a diversified product mix
ITC's diversification into related and unrelated areas in recent years
Why they did this ?
Huge Impostion of Govt. on Cigarette Market To reduce dependence on cigarette business

How they did ?

The Companys relentless efforts to create value through International quality products. Significant investments in technology and product development Strong portfolio of brands have enabled it to maintain its leadership position in terms of market standing and share. Customization of product Brand image enhancement

BCG MATRIX FOR ITC LTD Stars Hotels Paperboards/ Packaging. Agri business. Cows FMCGCigarettes ? FMCG- Foods

Dogs Maybe ITC InfoTech.

ITC PRODUCTS
FMCG-FOOD
Packaged Food Snack & confectionery

Indian Packaged Food industry

1.

With improving living standards, Indian consumers are now becoming more Hygiene and health-conscious Demand for neat and tidy packaged branded food in India.

2.

3.

The increasing number of working women and fast pace of life change social structure has driven the demand of packaged branded food.
Changing life style, the consumers now look for ways to reduce cooking time. Processed food output in India is likely to grow by 44.2% to touch US$ 90.1 billion, while packaged food sales will increase by 67.5% to reachUS$ 21.7 bn by 2012

4.

5.

Snacks and Confectionery Industry

1.

The Snacks and confectionery market is equally divided into the organised and unorganised sector.
The market size is estimated to the tune of US$3bn.

2.

3.

The organised sector of the snack food market is growing at 15-20 % per year
While the growth rate of unorganised sector is 7-8 per cent and the market Size is estimated to be worth of US$ 1.56 bn.

4.

5.

FMCG FOODS

Sales & Market Growth

Sales for FMCG business 35,000 30,000 25,000 20,000 Sales 15,000 10,000 5,000 0 2006 2007 2008 2009

Market for Biscuits

11% 31% 10% Sunfeast Others Parle Priya Gold Britannia 15% 33%

Promotion
Direct marketing:- Sign boards, posters at shops on point of sale Sales force ITC has just packed a classic punch (Jazz, Blues, Rocks) Interaction with customers in form of Competitions

ITC. Touching your life. Everyday

Positioning of ITC
VPN providing SCM, ERP & CRM capability

F A R M E R S

e-choupal rural two-way fulfillment capability

Cigarette Trade Marketing capability

Expanded FMCG distribution capability

M A R K E T S

Branded Foods

Lifestyle retailing

Education Stationery

Matches & Agarbattis

Personal Care Products

A basis for strategic partnerships with other FMCG brand owners

15

Targeting
Bingo Snacks The has flavors such as Masala Chaas, Chatpata Nimbu and Paneer Tikka, it has variants with truly Indian flavors. The segmentation was mainly done on basis of the age of the people. The primary target for Bingo is 18-30 year old people, who are willing to try out new flavors more easily than the small kids. Bingo is positioned as a youthful and innovative snack. KOI READY-TO-EAT CATEGORY) targeted at Tourists Consumers who order at Home NRIs US/ canada Makets Availabilty in more than 4500 stores Women in age group 25 plus Sunfeast Pasta Treat Targeted towards children as Healthy snack Youngsters as Fun Food

Various marketing strategies

The Company is planning to double its distribution and its advertisement budget to counter the PepsiCo's Frito lay. SHARUKH KHAN DHONI & SURYA as brand ambassador of SUNFEAST Sunfeast World 10K Bangalore-Brand philosophy -Spread the smile

E-COMMERCE activities for READY-TO-EAT Snack brand KOI Tie-up with leading portals to promote snack range Online advertising & can order snack on toll-free number 1600 ITC Foods has contract manufacturing facility. Panel tastes & approves it before processing takes place.

Organizational Structure for FMCG Foods

Important factors
CREDIT SYSTEMS MARGINS

PROMOTIONS

FOOD

STOCK OUTS

DISTRIBUTION CHANNELS

WASTAGES

Distribution of Food Products

Strict compliance standards, low profit margins, intense competition, high customer-service expectations.

Fast and effective sales ordering processes. Flexibility Quick reaction

ITC uses FIFO method They also keep the good on constant move from low sales area to high sales area. The company collects all the expired goods four times a year, and destroys them. Retailers must return expired or damaged products within six months after the date of expire. Adjustment for them is done in three months time. ITC provides their retailers with racks, hangers, etc to display the products. The benefits received by the retailers depend upon their sales volume and also the location of their shops. ITC has hired IMRB to do the market research.

CNF

Flow Diagram
FACTORY

WHOLESALE DEALER BASE WHOLESALE DISTRIBUTOR

RETAILER

Places

ITC. Touching your life. Everyday

e-Choupal

To Tackle Challenges Fragmented farms Weak infrastructure Involvement of various intermediaries e-Choupal unshackles low investment low productivity weak market orientation low value addition low margin low risk taking ability
e-Choupal

Mandi

e-Choupal Pricing

Inbound Logistics

Display & Inspectio n

Inbound Logistics

Auction

Operational Process

Inspection & Grading

Bagging & weighing

Weighing & Payment

Payment Hub Logistics

Outbound Logistics

Business Model

The e-Choupal Services

Information

Knowledge
Purchase-choupal Sales

saagar

Distribution Challenges first time internet users infrastructural inadequacies, How challenges are encountered Power back Upgrading BSNL exchanges by installation of VSAT equipment, Mobile Choupals, 24x7 helpdesk etc

Solar Power

VSAT equipment

Mobile Choupal

Over Coming Challenges Through

Trustmanship Creating Goodwill

NEW PRODUCTS LAUNCHED-2008-09

Paperkraft Copier Paper

Classmate Invento

Classmate Pencils

Classmate Pens

Mangaldeep Durbar Gold

Mikkel

Classic Verve

Fortune Select Dasve

Fortune Select Manohar

No Questions

Thank you ..