Index

Table of Contents
1 Introduction .................................................................................................................................... 3 1.1 ....................................................................................................................................................... 3 1.2 1.3 1.4 History & Evolution ................................................................................................................. 3 Organizational Structure ......................................................................................................... 5 ITC Leadership & Hierarchy..................................................................................................... 5 Organizational Chart ....................................................................................................... 5 The Whos Who of ITC .................................................................................................... 6

1.4.1 1.4.2 1.5 2

ITC Values & Culture ............................................................................................................... 7

Growth and Diversification ............................................................................................................. 8 2.1 2.2 Core Challenges faced ............................................................................................................. 8 Corporate Strategies ............................................................................................................... 8

3 4 5 6

The BCG Matrix for ITC Ltd.............................................................................................................. 9 DISTRIBUTION NETWORK............................................................................................................. 10 PEST analysis ................................................................................................................................. 11 Technology And ITC....................................................................................................................... 11 6.1 WORK CULTURE .................................................................................................................... 12

Leadership Learning and Development ........................................................................................ 13

1 Introduction

1.1
ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 14 billion and a turnover of over US $ 5 billion. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. 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 and acknowledged service skills in hoteliering. 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 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. ITC employs over 25,000 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 3,49,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."

1.2 History & Evolution

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited' with a leased office on Radha Bazar Lane, Kolkata, as the centre of the Company's existence.The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multibusiness portfolio encompassing a wide range of businesses - the full stops in the

Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. The first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and the merged entity was named the Tribeni Tissues Division (TTD). TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards. A line of premium range of notebooks under brand Paperkraft was launched in 2002.The popular range of notebooks was launched under brand Classmate in 2003. ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In 2007, the Company introduced 'Miss Players'- a fashion brand in the popular segment for the young woman. In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. ITC's foray into the Foods business started in 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In just seven years, the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing. In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative.ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector.

ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. The Company launched ' Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008.

1.3 Organizational Structure

As most consulting firms, ITC operates in a matrix structure. I. II. This kind of structure helps to prevent 'silos' forming and enables it to respond quicker to changes in its environment. The down side is that employees may feel uncomfortable with the uncertainty of not having a 'home' within the organization as the matrix structure is based around building different teams for different projects. The members of the teams are chosen for their specific skills suitable for each different project. Staff are not grouped together in traditional functions that are part of a hierarchy and a command and control style management.

III.

1.4 ITC Leadership & Hierarchy

The leadership within ITC is exercised at three levels. The Board of Directors at the apex, as trustee of shareholders, carries the responsibility for strategic supervision of the Company. The strategic management of the Company rests with the Corporate Management Committee comprising the wholetime Directors and members drawn from senior management. The executive management of each business division is vested with the Divisional Management Committee (DMC), headed by the Chief Executive. 1.4.1 Organizational Chart

Board Of Directors

Audit Committee

Compensation Committee

Nomination Committee

Investor Service Committee

Sustainability Committee

1.4.2 The Whos Who of ITC

BOARD OF DIRECTORS CHAIRMAN Y C Deveshwar

EXECUTIVE DIRECTORS Anup Singh K Vaidyanath

NON-EXECUTIVE DIRECTORS Anil Baijal S B Mathur P B Ramanujam R K Kaul D K Mehrotra Anthony Ruys B Vijayaraghavan S H Khan H G Powell Basudeb Sen

1.5 ITC Values & Culture

ITC's Core Values are aimed at developing a customer-focused, high-performance organization which creates value for all its stakeholders: Trusteeship As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualize stakeholder value and interest on a long term sustainable basis. Customer Focus We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. Respect For People We are result oriented, setting high performance standards for ourselves as individuals and teams. We will simultaneously respect and value people and uphold humanness and human dignity. We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives. We want individuals to dream, value differences, create and experiment in pursuit of opportunities and achieve leadership through teamwork. Excellence We do what is right, do it well and win. We will strive for excellence in whatever we do. Innovation We will constantly pursue newer and better processes, products, services and management practices. Nation Orientation We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels.

2
2.1

Growth and Diversification

Core Challenges faced
Restructuring the companys business portfolio and investmen ts: ITC was not well positioned to add long term value in areas such as Financial Services and Edible Oil businesses. The decision to exit from these sectors was based on the need to focus on businesses where the company possessed a credible track record, and where it has the relative capacity to strengthen and nurture core capabilities over time to sustain a leadership position in the Indian Global market of tomorrow. Consumer loyalty flows from the speed with which an organization innovates: Competitive advantage is derived from anticipating the future and encouraging strategic thinking possibilities in the organization. The company had put strategies in place for inculcating internationally benchmarked operating standard, marketing orientation and the related processes to exploit the special insight that arises from being close to the customer. Diversification of the businesses: Each of the companys businesses were in different phases of development requiring distinctive focus and level of investment for the transition from a position of dominance in regulated market to a position of leadership in a competitive market. Whilst possessing a conglomerate profile, the businesses were structured such that executive management can take place in a focused manner appropriate to the dynamics of each industry. Large corporations entering Indian market: Besides the benefit of size, large companies entering India can service their shareholders from their established bases in other markets. But for Indian companies strategic moves will require larger investments, gestation period would be longer, staying power and commitment to a business would be severely tested. Domestic illegal volumes very strong. Along with smuggled contraband, emerges as substantive segment. Direct servicing of 1,00,000 markets & 2 million cigarette retail outlets helped ITC to counter this problem

2.2

Corporate Strategies
Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities Pursue World class competitiveness in all businesses and across the entire value chain Best-in-class in terms of: o Internal Vitality o Market Standing

o Profitability Strategy of Organization and Governance processes geared to manage multiple businesses Blend core competencies and leverage ITC umbrella strengths to create new avenues of growth.

3 The BCG Matrix for ITC Ltd.

Stars Hotels Paperboards & Agri business. Question marks FMCG- Others Packaging.

Cows FMCG-Cigarettes

Dogs ITC Infotech.

4 DISTRIBUTION NETWORK

PEST analysis

Political
Huge burden of VAT Excise duty raised by union budget by 5 % Ban on communication Luxury tax in 10 states Smuggling 100% FDI allowed

Economical
Bidee : cigarette ratio-10:1 Profit margin is high Other forms of cheap tobacco intake

Social
Becoming status symbol Companions mounted by W.H.O. Changing attitudes towards tobacco May 31 is no tobacco day

Technological
State-of-the-art factories Cheap labour supply Development of IQMS Adapting other concepts like QC,TQM, KSS, 5 S, 6 sigma

Technology And ITC

Has moved toward higher levels of complexity, largely through added structure. Those structural features that define the division of labour are structural differentiation, occupational and role specialization, departmentalization, and multidivisional forms. It has defined the coordination and control of work formalization, hierarchy,

centralization, and lateral information flow facilitation Technology is broadly referred to as the work performed by the organization. It includes the hardware, skills, and knowledge of the workers. There is much overlap between technology, task environment, and environment in organizational literature. The environment is both a supplier of an organization's technology while it is simultaneously acted upon by the organization. Some measures of technology are complexity, uncertainty, and interdependence. The rational system predictions are basically: 1. the greater the technical complexity, the greater the structural complexity. The structural response to technical diversity is organizational differentiation. 2. The greater the technical uncertainty, the less formalization and centralization. 3. The greater the technical interdependence, the more resources the must be devoted to coordination.

6.1 WORK CULTURE

ITC is able to deliver leading-edge solutions consistently to its clients by bringing together highly talented people in a creative, collaborative environment. It is this environment that makes daily challenges enjoyable and rewarding and is one of the reasons why ITC is a great place to work. We take pride in our our core values, which shape the culture and define the character of our company. Focusing on teamwork: Together, you can experience the satisfaction of finding innovative ways to enable clients to reach their goals. Investing in training and development: We hire the best people and help them become even better in what they do. Providing a supportive work environment: With access to a vast array of resources, Accenture helps every employee build his or her career. Sharing our skills in the community: We focus on using our core skills to make a real difference to communities in a way that resonates with our business and our employees.

Leadership Learning and Development

An ever changing, highly competitive global landscape necessitates the development of a strong, customer responsive world-class company empowered by its vision, values and vitality. ITC has consistently fostered a culture that rewards continuous learning, collaboration and development across the organisation to be future-ready and to meet the challenges posed by ever- changing market realities. ITCs Learning & Development vision reinforces this agenda by seeking to build ITCs talent and leadership pipeline and enhance organisational capability to compete, win in the marketplace and create enduring value for our stakeholders and society. ITCs Learning & Development initiatives include core programmes straddling various dimensions of Leadership, Capability Enhancement and Skill(s) Development along with customised programmes that address diverse capability-building needs at various levels of the organisation. These programmes cover not just functional competencies but behavioural inputs as well, to ensure comprehensive development of our human resources. Focused programmes aimed at ensuring meaningful induction of talent into the organisation, initiatives to address current and future capability requirements of the organisation, platforms to understand what the future holds for us in terms of technology and process advancement and development inputs to enhance managerial and leadership capability of our resources are the mainstay of our Learning & Development agenda.