Itc Vishal Final

8/3/2019 Itc Vishal Final

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Company profile :

Type Public (BSE: 500875)

Industry Conglomerate

Founded 24 August 1910

Headquarters: Kolkata, India

Key people

Yogesh Chander Deveshwar,ChairmanK. Vaidyanath, Director,Kurush Grant, Director,Rajiv Tandon (CFO)
http://en.wikipedia.org/wiki/Types_of_business_entityhttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://www.bseindia.com/stockreach/stockreach.htm?scripcd=500875http://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Conglomerate_%28company%29http://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Yogesh_Chander_Deveshwarhttp://en.wikipedia.org/wiki/CFOhttp://en.wikipedia.org/wiki/CFOhttp://en.wikipedia.org/wiki/Yogesh_Chander_Deveshwarhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Conglomerate_%28company%29http://en.wikipedia.org/wiki/Industryhttp://www.bseindia.com/stockreach/stockreach.htm?scripcd=500875http://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Types_of_business_entity


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Products

CigarettesHotels

ApparelTobaccoFoodsStationeryPersonal CarePaperboard and specialty papersPrinting and packagingMatches and AgarbattisInfotech

Revenue US$ 9 billion (2011)

Employees 35000 + (2011)
http://en.wikipedia.org/wiki/Product_%28business%29http://en.wikipedia.org/wiki/Cigaretteshttp://en.wikipedia.org/wiki/Hospitality_industryhttp://en.wikipedia.org/wiki/Garment_Industryhttp://en.wikipedia.org/wiki/Tobacco_industryhttp://en.wikipedia.org/wiki/Foodshttp://en.wikipedia.org/wiki/Stationeryhttp://en.wikipedia.org/wiki/Personal_Carehttp://en.wikipedia.org/wiki/Printinghttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Matcheshttp://en.wikipedia.org/w/index.php?title=Agarbattis&action=edit&redlink=1http://en.wikipedia.org/wiki/Infotechhttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Infotechhttp://en.wikipedia.org/w/index.php?title=Agarbattis&action=edit&redlink=1http://en.wikipedia.org/wiki/Matcheshttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Printinghttp://en.wikipedia.org/wiki/Personal_Carehttp://en.wikipedia.org/wiki/Stationeryhttp://en.wikipedia.org/wiki/Foodshttp://en.wikipedia.org/wiki/Tobacco_industryhttp://en.wikipedia.org/wiki/Garment_Industryhttp://en.wikipedia.org/wiki/Hospitality_industryhttp://en.wikipedia.org/wiki/Cigaretteshttp://en.wikipedia.org/wiki/Product_%28business%29


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Company Background


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

market capitalization of nearly US $ 15 billion and a turnover of over

US $ 4.75 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, among India's Most RespectedCompanies by Business World and among India's Most Valuable

Companies by Business Today. ITC also ranks among India's top 10

`Most Valuable (Company) Brands', in a study conducted by Brand

Finance and published by the Economic Times.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards &

Specialty Papers, Packaging, Agri- Business, Packaged Foods &

Confectionery, Information Technology, Branded Apparel, GreetingCards, Safety Matches and other FMCG products. While ITC is an

outstanding market leader in its traditional businesses of Cigarettes,

Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly

gaining market share even in its nascent businesses of Packaged

Foods & Confectionery, Branded Apparel and Greeting Cards.

As one of India's most valuable and respected corporations, ITC is

widely perceived to be dedicatedly nation-oriented. Chairman Y C


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Deveshwar calls this source of inspiration "a commitment beyond

the market". In his own words: "ITC believes that its aspiration to

create enduring value for the nation provides the motive force to

sustain growing shareholder value. ITC practices this philosophyby not only driving each of its businesses towards international

competitiveness but by also consciously contributing to enhancing

the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed

at creating multiple drivers of growth anchored on its time-tested

core competencies: unmatched distribution reach, superior brand-

building capabilities, effective supply chain management andacknowledged service skills in hotelier. Over time, the strategic forays

into new businesses are expected to garner a significant share of

these emerging high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural

products. ITC is one of the country's biggest foreign exchange earners

(US $ 2.8 billion in the last decade). The Company's 'e-Choupal'

initiative is enabling Indian agriculture significantly enhance itscompetitiveness by empowering Indian farmers through the power of

the Internet. This transformational strategy, which has already

become the subject matter of a case study at Harvard Business

School, is expected to progressively create for ITC a huge rural

distribution infrastructure, significantly enhancing the Company's

marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC InfoTechIndia Limited, is aggressively pursuing emerging opportunities in

providing end-to-end IT solutions, including e-enabled services and

business process outsourcing.

ITC's production facilities and hotels have won numerous national

and international awards for quality, productivity, safety and

environment management systems. ITC was the first company in India

to voluntarily seek a corporate governance rating.


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ITC employs over 21,000 people at more than 60 locations across

India. The Company continuously endeavors to enhance its wealth

generating capabilities in a globalizing environment to consistently

reward more than 3, 95,000 shareholders, fulfill the aspirations of itsstakeholders and meet societal expectations. This over-arching vision

of the company is expressively captured in its corporate positioning

statement:

ITC was established on August 24, 1910 as the Imperial

Tobacco Company in Kolkata. Initially, the company was

involved in the trading of imported of cigarettes.In 1925,in a backward integration move, the company started a

packing and printing business.

The name of company was changed to Indian Tobacco Company

Limited (ITC Ltd.) in 1974.

In 1975, ITC Ltd., through ITC-Welcome group, tied up with the

US-based Sheraton Corporation to enter the hospitality

industry. It acquired the first hotel in Madras (later renamedChannai) in Tamil Nadu and called it the Welcome group Chola

Sheraton.

ITC Ltd established ITC Bhadrachalam Paperboards Ltd

(IBPL) in 1975. The company started production at its

integrated pulp and paper/board manufacturing facility at

Bhadrachalam, Andhra Pradesh, in 1979.

In 1990, ITC Ltd. set up International Business Division (IBD)

for export of agri-commodities.

ITC started a greeting cards business under the brand name

Expressions in the year 2000.

In the same year, ITC also entered the fashion retailing business

by extending its well known cigarette brand Wills. The retail

outlets were called Wills Lifestyle and offered premium leisure

wear for men and women under the Wills Sport brand.


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In September 2001, the company was renamed ITC Ltd (without

full stops, and with no meaning attributed to the alphabets).

In 2001, ITC made an entry into foods business.

In 2004, the company launched another clothing brand, JohnPlayers, which targeted the urban youth.

In 2004, ITC was one of eight Indian companies to make it to

the Forbes A List8 which featured400 of the worlds best

big companies.

In Oct 2005, ITC has launched an exclusive line of prestige fine

fragrances and personal care products under the Essenza Di

Wills brand.In late 2007, ITC launched Fiama Di Wills soaps and shampoos

following the success of Essenza Di Wills.

In Dec 2007, ITC launched ECF (Elemental Chlorine Free).

ITC is the first and only Company in India using the ECF

technology.

Products:


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ITC's Vision


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Sustain ITC's position as one of India's most valuablecorporations through world-class performance.

Create growing value for the Indian economy and the Company'sstakeholders.

ITC's Mission

To enhance the wealth generating capability of the enterprise in aglobalizing environment

Deliver superior and sustainable stakeholder value.

ITC's Core Values


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The companys Core Values are aimed at developing a performance-oriented organization that is highly customer focused and also createsvalue for those holding stake in it. It fully understands that it has acommitment to its stakeholders to act as a guardian of the companyfrom stakeholders point of view and deliver results in a manner that

actualizes stakeholders interest on a long-term basis.

It also delivers on the commitment to its customers by consistentlyaddressing their needs on product quality, value and overallsatisfaction. It respects the values of people and also encouragesindividuals to pursue their dreams, values their differences and helps

them to experiment in the pursuit of various opportunities.

ITC firmly believes in the concept of Excellence with their mantra

being, we do what is right, do it well and win. We will strive for

excellence in whatever we do. It is constantly in the pursuit of better

and newer products, processes, services and management practices.

Apart from the interest of shareholders they also address theircommitment to the nation to generate economic value, at the same

time ensuring that in achieving these goals no compromises are

made whatsoever in complying with rules and regulations as

specified by law.

ITCs Philosophy


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ITC believes in practicing ethical behaviour among the corporatecitizen. The company follows an HR policy that is regulated by

Teamwork, Trust, Collaboration, Mutuality, Meritocracy, Objectivity,

Collaboration, Self-respect and Human-dignity. It is also deeply

committed to make the company a gender friendly place for each

individual while also ensuring enhancement of equal opportunities

for men and women, preventing sexual harassment of any form and

the adherence to good employment practices. It is ensured that the

interest of the company is foremost and in this context acceptance of

any kind of gifts or payments from suppliers or customers is viewed

as a serious breach of company discipline. And such acts are also

considered as damaging to the reputation of the company.

High standards of house keeping and hygiene are followed to ensure

excellent physical working conditions. It is understood that all thedirectors, senior management and employees shall conductthemselves in an honest manner and avoid any conflict of interest.

The top officials and employees of ITC believe that ITC provides them

freedom at work and resources to experiment. Employees take pride

in working for ITC for its work culture, environment, and the way

people are treated. They are consulted before a new project\system

is introduced and their concerns and suggestions addressed. ITC alsogives a lot of input to develop their skill and career. They give utmost

importance to equal opportunities, better work environment.


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Structure

ITC has a three-tier management structure

At the top are Chairman and Board of Directors, who are responsiblefor the strategic supervision of ITC, its wholly owned subsidiaries andtheir wholly owned subsidiaries. The ITC board is a balanced boardcomprising Executive and Non-Executive Directors. The Boardensures that the Company has clear goals relating to shareholdervalue and its growth. It sets strategic goals and seeks accountabilityfor their fulfilment. There are four board committees, namely, theAudit Committee, the Nominations Committee, the CompensationCommittee and the Investor Services Committee.

At the second level is the Corporate Management Committee, which isresponsible for the strategic management of the company's businesseswithin Board-approved direction/framework. It comprises all theExecutive Directors and three or four key senior members ofmanagement.

Third level consists of divisional CEOs of each business assisted by

their own divisional management committees. Corporate Functions

of the Executive Management Team includes Planning and Treasury,

Accounting, Legal, Secretarial, Human Resources, Communications,

Internal Audit and Information Technology.


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Areas of Diversification

ITC has transformed itself from a leading cigarette manufacturer toan umbrella group that offers a diversified product mix to enhance itsbrand image and reduce dependency on tobacco related products. Ithas forayed into the hospitality service industry and has become amajor player in the hotels segment. Its position in the FMCG (fastmoving consumer goods) business is also on a growth curve;especially its confectionery and biscuits which are slated to achievethe top ranks among its peers. It has made heavy investments tostrengthen its IT (information technology) segment and to competewith the big players like Infosys and Wipro. Although the ITC group is

marketing its image as an ideal corporate citizen and a company thattakes its social responsibility seriously, it still earns 80% of revenuesfrom selling cigarettes and other tobacco related products.The major areas in which ITC has diversified are:

FMCG Cigarettes Food

Lifestyle Retailing Greetings and stationery Safety MatchesIncense sticks

HotelsPaperboards and Packaging Paperboards and specialty paperspackagingAgri-BusinessAgri- exportsE-choupalInformation Technology


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Distribution Network of ITC in INDIA:

18 factories.

60 Branches.600 distributors & 15000 Retailers.


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EXTERNAL ANALYSIS

GENERAL ANALYSIS (PEST MODAL)


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(i) POLITICALENVIRONMENTGovernment policies have affected the growth of cigarette industry in

India in various stages. The control on cigarette for a long time and

then partial decontrol and then total decontrol has contributed to the

gradual opening up of the market for cigarette producers. Thefollowing are the various political factors which influence the

Cigarette industry.

a) Huge burden of VATb) Excise duty rise by govt. in Union budget by 5%c) Ban on Communication & Advertisementd) 100& FDI allowed.

(ii) ECONOMICAL ENVIRONMENTThe consumption and demand for cigarette is a sign of a countries

progress and economic development. Almost every country in the

world, committed to industrialization and sound economicdevelopment, generates an ever increasing demand for cigarette. The

following are the various economical factors which influence the

Cigarette industry.

a) Bidee :cigarette ratio = 10:1b) Profit margin is highc) Other forms of cheap tobaccos

(iii) SOCIOCULTURAL ENVIRONMENTThe following are the various socio cultural factors which influence

and favor the Cigarette industry.

a) Becoming the status symbolb) Companions mounted by WTOc) Changing attitude towards tobacco

(iv) TECHNOLOGICAL ENVIRONMENTThe following are the various socio cultural factors which influence

and favor the Cigarette industry:

a) Cheap labour supplyb) Adapting other concepts like

QC, TQM, 5 S, 6 Sigma etc..


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Michael Porter FIVE FORCE Model:


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Threat of new entrants:

Due to 100% F.D.I allowed by the government there is a entry of many

new international brands in the Indian market.

Bargaining power of suppliers:

The major inputs are tobaccos are done by farmers. The prices of both tobaccos

are determined by the farmers. The company has to pay the high price as

demanded by the farmers. .

Rivalry among existing competitors:

Previously the rivalry was strong among the players, as the industry was not

consolidated. During the last few years the industry has become more

consolidated with the top 3 players having a combine market share of 49% in

2008-2009 as compared to 32% in 2007-2008.

Bargaining power of buyers:

The customers are demanding new and international branded cigarettes and

FMCG products at a cheap costs.

Threat of substitutes:

The substitute of cigarette is Bides and thery many other substitutes for FMCG

products.


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COMPETATIVE ANALYSIS:

TOP 10 FMCG COMPANIES IN INDIA

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestl India

4. GCMMF (AMUL)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

10. Marico Industries


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TOP 10 INDIAN FMCG COMPANIES COMPETATIVE ANALYSIS

APR-SEP 2011 A&P/SALES%

COMPANY SALES RS

CR

A&P

SPENDRSCR

APR-SEP

2011

3YRS AGO

HINDUSTANUNILEVER

DABUR INDIA

MARICO

GLAXOSMITHKLINE

CONSUMER

COLGATE POLMOLIVE

INDIA

GODREJCONSUMER

EMAMI

ARGO TECH FOODS

JYOTHY LABS

8703

1591

1389

964

955

1014

400

305

250

1132

234

176

156

141

94

75

31

14

13.0

14.7

12.7

16.2

14.7

9.3

18.7

10.1

5.5

8.9

11.9

12.1

13.1

17.5

10.3

2.5

1.3

8.0


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RELATED TO TWO COMPANIES HUL & ITC

HUL (Hindustan Unilever Ltd.)

This Company is earlier known as Hindustan Lever Ltd.

This is Indias largest FMCG sector company with all type of household

products available with it. It has Home & Personal Care products, and also food

and Water Purifier available with it. According to Brand Equity, HUL has largest

no of brands in most trusted brands list. 16 of HULs brands featured in AC-

Nielson Brand Equity list of 100 most trusted brands in 2010 in an annual

survey. For the entire year ending March - 2011 net turnover of company is Rs.

20239.33 Crore which is 47.99% higher than 31st December 2009s Rs.

13675.43 Crore driven mainly by domestic FMCGs with net profit stood at Rs.

2496.45 Crore.

Products of HUL are: Annapurna; Ayush; Axe; Breeze; Bru; Brooke bond; Clinic;

Dove; Fair & Lovely; Hamam; Liril; Lux; Pears; Ponds; Pepsodent; Pureit;

Rexona; Rin; Sunlight; Surfexcel; Vaseline; Wheel.

ITC Limited

This Company was earlier known as Imperial Tobacco Company of

India Ltd. It is Currently headed by Yogesh Chander Deveshwar.

Company mainly operates in the industry like Tobacco, Foods,

Hotels, Stationary and Greeting Cards with the major products constitutes

Cigarettes, packed foods, hotels, and apparels. For the entire year ending Mar-

2011 the turnover of company is at Rs. 15388 Crore which is 10.3% higher than

previous years Rs. 13947.53 Crore, driven mainly by robust 20% growth in

non cigarette FMCG business with net profit stood at Rs. 3324 Crore.


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INTRENAL ANALYSIS


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SWOT Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is

the first stage of planning and helps marketers to focus on key issues

Strengths

ITC leveraged it traditional businesses to

develop new brands for new segments.

For example- ITC used its experience of

transporting and distributing tobacco products

to remote and distant parts of India to the

advantage of its FMCG products.

ITC master chefs from its hotel chain are often

asked to develop new food concepts for its

FMCG business.

ITC is a diversified company trading in a number of business sectors includingcigarettes, hotels, paper, agriculture, packaged foods and confectionary,

branded apparel, personal care, greetings cards, Information Technology,

safety matches, incense sticks and stationery.

Weaknesses

The company's original business was traded in tobacco. ITC stands for India

Tobacco Company of Limited.

It is interesting that a business that is now so involved in branding continues to

use its original name, despite the negative connection of tobacco with poor

health and premature death.

To fund its cash guzzling FMCG start-up, the company is still dependent upon

its tobacco revenues. Cigarettes account for 47 per cent of the company's

turnover, and that in itself is responsible for 80% of its profits.


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So there is an argument that ITC's move into FMCG (Fast Moving Consumer

Goods) is being subsidized by its tobacco operations. Its Gold Flake tobacco

brand is the largest FMCG brand in India - and this single brand alone hold 70%

of the tobacco market.

Opportunities

Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can

be developed using strategies of market development, product development

and marketing penetration.

ITC is moving into new and emerging sectors including Information

Technology, supporting business solutions.

e-Choupal is a community of practice that links rural Indian farmers using the

Internet. This is an original and well thought of initiative that could be used in

other sectors in many other parts of the world.

It is also an ambitious project that has a goal of reaching 10 million farmers in

100,000 villages.

This concept is tremendously difficult for competitors to emulate.

Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate

into the country's premier FMCG business.

Per capita consumption of personal care products in India is the lowest in the

world offering an opportunity for ITC's soaps, shampoos and fragrances under

their Wills brand.

Threats

The obvious threat is from competition, both domestic and international. The

laws of economics dictate that if competitors see that there is a solid profit to

be made in an emerging consumer society that ultimately new products and

services will be made available.

Western companies will see India as an exciting opportunity for themselves to

find new market segments for their own offerings.


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DIFFERENT LEVEL STRATEGIES

The strategic can be broadly divided into three levels they are as follows

Corporate strategy

Business strategy

Functional strategy

The above three levels can be diagrametically rapresent are as follows,

Corporate

Business strategy

Functional strategy

CEO, MD

HOD

SUPERVISORS,

WORKERS,

EMPOYEES


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The above levels of management is explain as follows..

CORPORATE STRATEGY:[CEO,MD]

It describe the companies over all direction in terms of its general attitude

towards growth and the management of its various businesses and the

product line.

Corporate strategy refers to the principle strategy of the diversified firm.

It is also concerned with selection of businesses.

It is also called as highest level of strategy

Business strategy:[HOD]

It is usually occurs at the strategic business unit level or product levels.

It emphasis improvement of the competitive position of a firms product or

services in a specified industry

Business strategy includes mktg strategy`s, H.R strategy`s, financial strategy`s,

legal strategy`s and information technology development strategies.

This level is based on short and medium term plan and each department

functional responsibilities.

FUNCTIONAL STRATEGY:[SUPERVISORS,WORKERS,STAFFS]

It relates to the functional areas such as production, mktg, financing,

personal, etc.

The functional strategy aims at achieving functional objectives.

This level is also called as operation strategy level or departmental strategy

level.

It is lowest level of strategy management. It is deal with day to day operation

level of the business.


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MARKETING STRATEGY:

Sustain multiple drivers of growth, matching internal capabilities withemerging market opportunities

Pursue World class competitiveness in all businesses and across the entirevalue chain

Best-in-class in terms of: Internal Vitality Market Standing Profitability

Strategy of Organisation and Governance processes geared to managemultiple businesses

Blend core competencies and leverage ITC umbrella strengths to createnew avenues of growth

Market segmentation.


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INTRODUCTION-BCG MATRIX

BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE

HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970s.

According to this technique, businesses or products are classified as low or

high performers depending upon their market growth rate and relative market

share.

THE BCG GROWTH-SHARE MATRIX

It is a portfolio planning model which is based on the observation that a

companys business units can be classified in to four categories:

Stars

Question marks

Cash cows

Dogs

It is based on the combination of market growth and market share relative to

the next best competitor.


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Limitations

Assumes market growth rate. A firm may grow the market.

A Dog may be helping other products.

High market share/Growth is not the only success factor.

Linkage between market share and profitability is questionable


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STARS-High growth, High market share

Stars are leaders in business.

They also require heavy investment, to maintain its large market share.

It leads to large amount of cash consumption and cash generation.

Attempts should be made to hold the market share otherwise the star

will become a CASH COW.

CASH COWS-Low growth , High market share

They are foundation of the company and often the stars of yesterday.

They generate more cash than required.

They extract the profits by investing as little cash as possible

They are located in an industry that is mature, not growing or declining.

DOGS-Low growth, Low market share

Dogs are the cash traps.

Dogs do not have potential to bring in much cash.

Number of dogs in the company should be minimized.

Business is situated at a declining stage.

QUESTION MARKS-High growth , Low market share

Most businesses start of as question marks.

They will absorb great amounts of cash if the market share remains

unchanged, (low).

Why question marks?

Question marks have potential to become star and eventually cash cow

but can also become a dog.

Investments should be high for question marks.


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Itc Vishal Final

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