Final Itc Grp10

8/8/2019 Final Itc Grp10

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ITC. Touching your life. EverydayITC. Touching your life. Everyday

Presented by

GROUP NO.10GROUP NO.10Sumit Roy (06)

Minhaz Hamdule (09)

Kashish Arora (34)

Akansha (35)

Anamika Singh (40)

Tarun Dutt (51)


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IntroductionIntroduction India's foremost private sector companies

No. 1 in FMCG Sector

Registered office in Kolkata

Employees over 20000 people

Annual turnover is of the order US 4.75 billion


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ITCITC -- Business PortfolioBusiness Portfolio

ITC

FMCG

Cigarettes

Paperboard

Paper &

Packaging

Agri Business

Leaf Tobacco

Agri

Commodities


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Agriculture in India

Agriculture is vital to Indiavital to India

produces 16.7% of GDP, feeds a billionpeople, and employs 66% of the

Workforce Extensive dependence on Monsoondependence on Monsoon

Illiteracy & black-marketing prominent

Farmers still suffering Unfair agricultural systemUnfair agricultural system

Mandi systemMandi system


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Problem in rural India

ROOT CAUSES IMPLICATION

Fragmentation Weak Bargaining Power

Dispersion No access to real-time

information

Heterogeneity Need for customized knowledge

Weak

Infrastructure

Dependence on middlemen


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Mandi systemMandi system

Lack of information

Local Mandis dominated by commissionagents

Spoilage, Wastage further hamper netproductivity

Multiple point of handling

Untimely Payments

Mixing of premium quality produce with inferior

to inflate price High dependence on Commission Agent

(Adatiyas)

Commission 2.5% to 3%

FARMER MANDI BUYER


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IntroductionIntroduction Started in the year 2000

ITC began the silent ee--volutionvolution of rural India with soyagrowers in the villages of Madhya Pradesh

Target Area so far 38,000 villages, 6500 kiosks, 9 states

Only initiative to attempt to combine Services and an

Effective Business Model successfully

Designed to address the issues such as:1. Fragmented farms

2. Weak institutions

3. Involvement of intermediaries

4. Information Asymmetry


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What is eWhat is e-- Choupal ?Choupal ?

The e- choupal Infrastructure

kiosk with Internet Accesskiosk with Internet Access

In the house of a trained farmerSanchalak

Within walking distance of target farmersAdditional investments in Solar Power &

VSATs to overcome weak infrastructure


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ee-- Choupal PlatformChoupal Platform

Information

(e.g. Price

Discovery)

Sanchalak

Knowledge(Customized)

Transaction

Samyojak

Choupal Sagar

PRODUCT

&

SERVICE

PROVIDERS

VILLAGE TOWN PAN-INDIAN


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Why ITC thought of e- Choupal

The TacticalImperative

Capture of Intra-dayPrice shifts

Seasonal price Inflation

Daily price inflation

ITCs distance from

Farmer

The StrategicImperative

Horizontal spread

Vertical presence

Risk management


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How is e- Choupal different?

1. Freedom of Information

Information & Knowledge is free of cost

No initial investment of the Sanchalak

Not subsidized- Govt does not pay , the shareholders look for a

competitive return.

2. Freedom of Transaction

Farmers are free to sell their produce anywhere

3. Entrepreneurship

No salary paid to Sanchalaks a commission based model

Transaction-based income stream for the Sanchalak &Samyojak


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E-CHOUPAL NOW

States covered 10

Villages covered 40,000

No. of e-Choupals 6,500

Farmers e-empowered 4 million


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How is E- choupal Supply chain better from Mandi system?


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Supply chain-Mandi operation system

InboundLogistics

DisplayInspection

AuctionWeighing

andBagging

PaymentOutboundLogistic


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Supply chain post re-engineering- ITC

PricingInboundLogistics

InspectionGrading

Weighingand

Payment

HubLogistics

Technological

support


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Transaction cost in Mandi Chain (before e-Choupal)

Source: Seminar on Bottom of thePyramid and CSR, IIM-K, Sept.

24, 2008


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Transaction cost in Mandi Chain (after e-Choupal)

Source: Seminar on Bottom of thePyramid and CSR, IIM-K, Sept.

24, 2008


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Network Size in 2005

State Choupals Hubs

Madhya Pradesh 1750 43

Uttar Pradesh 1750 42

Maharashtra 900 22

Rajasthan 500 15

Karnataka 100 2

Andhra Pradesh 150 3

Choupals 5,150 127

Villages 31,000

Farmers 3,500,000

Adding Six New Choupals Every Day

Intend Scaling up to 100,000 Villages in 15 States by 2010


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Key components of ITC EKey components of ITC E-- ChoupalChoupal

implementation that led to its successimplementation that led to its success:

incorporated e into the age old tradition on village E-choupals.

Reorganization of the supply chain. Village A Mandi B Factory C (Old) Village A

hub Factory C ( New)It was developed with full involvement of farmers.

In-depth knowledge of rural markets User friendly websites - Site provided

information on weather, best practices, crop information, market information,

FAQs, news, feedback and information about ITC. Beneficial for processor as

well as farmerImproved logistic facility Selection of Sanchalak and Samyojaks

Evolving an appropriate user interface Vast scope for rural development

E-choupal was one stop shop. ITC hubs were better equipped than mandis.

Rest rooms Electronic weighing machines Cash on delivery Transportation cost

was reimbursed. Tented seating area. Soil testing lab on premises.


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ITCs Aqua Care Centre

Kakinada, Andhra Pradesh

Revolutionized the concept of shrimp

seed testing.

Sophisticated laboratory detects

the deadly White Spot virus in the

shrimp seed

advises farmers on appropriate remedial

action.


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Choupal SaagarChoupal Saagar

Physical infrastructure hub that comprises collection andstorage facilities and a unique rural hypermarket that offersmultiple services under one roof.

agriagri--sourcing centers, shopping centers, and facilitation centerssourcing centers, shopping centers, and facilitation centers

This landmark infrastructure, which has set new benchmarks forrural consumers also incorporates farmer facilitation centreswith services such as sourcing, training, soil testing, healthclinic, cafeteria, banking, investment services, fuel stationetc.

24 'Choupal Saagars' have commenced operations in the statesof Madhya Pradesh, Maharashtra and Uttar Pradesh.

ITC is engaged in scaling up the rural retailing initiative toestablish a chain of 100 Choupal Saagars in the near future.


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Whats in it for ITC?

Better supply chain forITCs Food & Agri BusinessesBetter supply chain forITCs Food & Agri Businesses

Costs, Quality, Traceability

Access to the Underserved Rural MarketsAccess to the Underserved Rural Markets

Through a Virtuous Cycle created by LargerIncomes, and

founded on Trust that is built

New ITES Business OpportunitiesNew ITES Business Opportunities

Health, Education, Entertainment

Shareholder Value through Serving SocietyShareholder Value through Serving Society

Also, the infrastructure serves as a reliable delivery

mechanism for resource development initiatives (e.g.

water,animal management)


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Whats in it for the farmer?

Payment on Delivery

No malpractices

Reduction in wastage and spillage

Increased yields

Transaction costs are reimbursed

Power of Scale to the Small Farmer

Customized Knowledge despite Heterogeneity

Real time information despite Distances


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Availability:

It emphasizes on the availability of the

goods and services to the end

consumers.

In the case of e- choupal the products

are available continuously because

sanchalaks maintains continuous

inventory and maintains aggregatedemand.


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Affordability:

It focuses on product pricing.

ITC buys from farmers directly in the last

days closing price and even pays them

for transportation. Goods are weighted

electronically and hence farmers are nofarmers are no

more cheatedmore cheated as they used to be

previously. Hence it is a win-win situation both for

farmers and the company.


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Acceptability:

It focuses on convincing the customer to buy theproduct.

ITCs e- choupal initiative is proving the farmers with

real time updated information on weatherupdated information on weather.

It is providing them customized knowledgecustomized knowledge in theform of farm management and risk managementfarm management and risk management.

lower transaction costlower transaction cost.

financial servicesfinancial services in the form of life, general, healthand crop insurance.


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Awareness: It focuses on making people aware of the product. active servicing up to rural outletsactive servicing up to rural outlets.

It is providing them with wide range of product categorieswide range of product categories.

Moreover it has made entrepreneurs out of farmersmade entrepreneurs out of farmers as they are

managing most of the work, it instills in them the sense of

ownership.

Promotion in local haats & melas

In local festivals

Information through Sanchalaks

This enthusiastic response from farmers hasThis enthusiastic response from farmers has

encouraged ITC to plan for theencouraged ITC to plan for the

extension of the eextension of the e-- ChoupalChoupal initiative toinitiative to

altogether 15 states across Indiaaltogether 15 states across India

over the next few years.over the next few years.


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Future plans Scalability

Sourcing IT-enabled services from rural India

Elaborate rural Marketing & Distribution strategy

Use ofITC hub for selling of other products to rural community

Agro-extension

Use of e- choupal portal for advertising

channelize other services related to micro-credit, health and

education through the same 'e-Choupal' infrastructure


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ChoupalChoupalMahotsavMahotsav A rural marketing initiative, in Uttar Pradesh.

First event - March 26-April 18 (three-day event)

Held at---- 8 ITC Choupal Saagars spread across the state

in locations including Hathras, Chandauli, Hardoi, Badaun,Bahraich and Gonda.

happen twice a year, coinciding with the two harvest seasons

of Rabi in March and Kharif in november.

provide opportunities for marketersopportunities for marketers to interact with, engage

and above all, showcase their products and activitiesshowcase their products and activities

targeted at rural consumerstargeted at rural consumers. The participating brands include

Superia, Vivel, Monsanto, TVS Motors, Bharat Petroleum,

JCB, Tata Magic, Tata Tea, ACC Cement and Texmo Pumps.


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Marketing

pre-activation publicity is being carried out across these

villages

handing out leaflets

putting up posters

banner activities

door to door invites.

More than 1,00,000 rural consumers from more than 2,000

catchment villages are expected to attend the rural

interactive platform.


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Training


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Power Connectivity

Website


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eChoupal Sagar

Thank You

ITC Limited

Final Itc Grp10

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