ITC SCM Finalll Rev
Transcript of ITC SCM Finalll Rev
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Group Membersndro Saha - 81Wani 92h Ghanavat 100s Koli 119
hwanathan Hariharan - 128
Supply Chain
Management of ITCLtd. Cigarettes
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Market capitalisation : US $ 33billion and a turnover of US $ 7billion.
Rated among the World's Best BigCompanies, Asia's 'Fab 50' and theWorld's Most Reputable Companies
by Forbes magazine, Diversified presence in Cigarettes,
Hotels, Paperboards & Specialty
Papers, Packaging, Agri-Business,
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India the second largest producer of tobacco in
the world after China.
The Indian cigarette industry forms 32 % value ofthe Rs.72000 Crores.
Cigarettes account for 85 per cent of the countrystotal tobacco exports.
Of the total tobacco produced in the country,around 48 per cent is consumed in the form of
chewing tobacco, 38 per cent as bidis, and 14 percent as cigarettes.
*Business Standard June 02,2011
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The per capita consumption of cigarettesin India is a tenth of the world average.
In the recent past, the consumption oftobacco has been reduced by anti-tobaccodrives and the ban of consumption inpublic areas.
The biggest player in this industry is ITC
with a market share of 73 per cent
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20% of bidis are produced in the organized sectorand 80% in the unorganized sector.
It is estimated that 750 billion to 1.2 trillion sticksare produced annually.
The bidi industry in India is worth Rs200 billion($4bn)
Bidis are much cheaper than cigarettes
Bidis cost between Rs2.50-5.00 for 25 sticks (lessthan one Rs per stick)
In 2009, Euromonitor reported that bidi volumesales were down 5% from the previous year
because of a ban on smoking in public places.
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Declines in cigarette volumes aremainly due to a 2008 increase in thetax on unfiltered cigarettes.
The tax increase has led to manyunfiltered brands being removed
ITC Ltd stopped unfiltered cigaretteproduction entirely
Despite declines in sales, it is
expected that cigarette use willincrease - dis osable incomes66
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Indias total cigarette production isvalued at Rs 220 billion (12%-exported)
According to EuromonitorInternational database, the retailvolume sales of cigarettes have been
stagnated for three-four year ataround 90 billion level.
Retail level of the sales have been
decreased by 9% from 99.6 billion77
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CigaretteIndustryOverview
Main players inthis industry areas follows:
ITC, GodfreyPhillips, VST,GTC theirmarket shares
are:
88
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PRICINGSTRATEGIES
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Retailer prices for ITCCigarettes
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DistributorPricing
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Gold Flake -
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Gold Flake - Honey
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RetailPricing
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Retail Pricing
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