Value Generation ITCs Values Creation for Customers:

ITC had some basic beliefs with regards to expansion due to which it achieved the success it reaps today:
1.

Believed that in an emerging economy with huge untapped opportunities, significant growth and success could accrue if diversity were to be managed well through innovative business strategies. 2. It also recognized that diversity could lend unique sources of competitive advantage and growth that we would otherwise not be able to reap if we were present in only one sector. Diversity helped in Value Creation: One of the primary products in its portfolio -- Aashirvaad atta [wheat flour] -- is today a leader in its segment within a very short time since its launch. Its success is an example of the synergies that ITC derives from the diversity of its businesses. ITC's pioneering rural initiative, the e-Choupal network, enables cost effective sourcing of wheat but, more importantly, lends a competitive strength given the traceability of the commodity through identity-preserved procurement. This enables customized blending, which again is a strength honed from the practice of tobacco blending over the years, to support local tastes and preferences. ITC's hotels business and its master chefs interact with millions of consumers throughout the year and are able to understand the nuances of regional and local tastes that delight the consumer palette. This knowledge is utilized by the foods business to deliver a superior and differentiated product. ITC's packaging business provides unique solutions and it also draws upon the synergies of the group company in areas such as consumer insights, branding and efficient trade marketing and distribution. All of these not only add to the competitiveness of the foods business but the entire value chain of which they are a part. This is only possible given the synergies arising out of ITC's diversity of business. Similarly, ITC's Wills Lifestyle outlets provide us with an opportunity to engage with consumers in the premium space and we have leveraged this valuable experience for our personal care products business. VALUE CREATION BY THE DIFFERENT VERTICALS OF ITC FMCG Cigarettes: The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution. All initiatives are therefore worked upon with the intent to fortify market standing in the long term. This in turns aids in designing products which are contemporary and relevant to the

changing attitudes and evolving socio economic profile of the country. This strategic focus on the consumer has paid ITC handsome dividends. In the extremely competitive US market, ITC offers high-quality, value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key player in the GCC markets through growing volumes of its brands. ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger, Saharanpur, Kolkata and Pune. These factories are known for their high levels of quality, contemporary technology and work environment. FOODS: The packaged foods business is an ideal avenue to leverage ITC's proven strengths in the areas of hospitality and branded cuisine, contemporary packaging and sourcing of agricultural commodities. ITC's world famous restaurants like the Bukhara and the Dum Pukht, nurtured by the Company's Hotels business, demonstrate that ITC has a deep understanding of the Indian palate and the expertise required to translate this knowledge into delightful dining experiences for the consumer. The Foods business carries forward this proud tradition to deliver quality food products to the consumer. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. Leadership in the Foods business requires a keen understanding of the supply chain for agricultural produce. ITC has over the last 100 years established a very close business relationship with the farming community in India and is currently in the process of enhancing the Indian farmer's ability to link to global markets, through the e-Choupal initiative, and produce the quality demanded by its customers. This long-standing relationship is being leveraged in sourcing best quality agricultural produce for ITC's Foods business. In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. AGARBATTIS: This Business leverages the core strengths of ITC in nation-wide distribution and marketing, brand building, supply chain management, manufacture of high quality paperboards and the creation of innovative packaging solutions to offer Indian consumers high quality Agarbattis. With its participation in the business, ITC aims to enhance the competitiveness of the small and medium scale sectors through its complementary R&D based product development and strengths in trade marketing and distribution. Mangaldeep is also available in 3-in-1 and 5-in1 packs giving the consumer a choice of multiple fragrances in a single pack. Mangaldeep appeals to a cross-section of consumers with offerings at various price points. These agarbattis are available in innovative 'Fragrance-Locked' packaging. 'Fragrance locking' is a unique concept of packaging which retains the fragrance for a longer period and helps in

"Completing the Purity of Prayer". Mangaldeep is fast emerging as the only national brand in an industry dominated by multiple local brands. Recently, Mangaldeep launched the Premium range of Sarvatra Flora agarbattis. Sarvatra flora agarbattis are a wet type of agarbattis, different from the normal agarbattis. LIFESTYLE RETAILNG: ITC's Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country. They basically cater to a niche set of market by providing them with exclusive retail products. EDUCATION AND STATIONARY: Classmate and Paperkraft offer a range of products in the Education & Stationery space to the discerning consumer, providing unrivalled value in terms of product & price. Meticulous understanding of consumer needs helped creating a relevant and comprehensive portfolio satisfying the needs of different sets of consumers. It blends its knowledge of image processing, printing and conversion garnered from Packaging & Printing Business with its brand building and trade marketing & distribution strengths resident in its FMCG business to offer superior value products to consumers. Paperkraft Business paper and the papers used in Classmate and Paperkraft notebooks are superior in quality and environment-friendly. Other offerings available in education and Stationery range are safe and certified non-toxic. PERSONAL CARE: Based on extensive consumer research and product development, ITC's personal care portfolio brings world-class products with clearly differentiated benefits to quality-seeking consumers. The product formulations use internationally recognised safe ingredients, subjected to the highest standards of safety and performance. SAFETY MATCHES: With differentiated product features and innovative value additions, these brands effectively address the needs of different consumer segments.

HOTELS: As one of India's most dynamic hospitality chains, ITC Hotels has set standards for excellence in the hotel industry by pioneering the concept of branded accommodation. The chain has developed three brands of accommodation ITC One', 'Towers' and the 'Executive Club' to differentiate between the needs of various travellers and provide high levels of service. ITC Hotels has strategically customized its hotels and appropriately categorized them to fulfil the service and budgetary needs of travellers.

Paper Boards & Packaging The business caters to a wide spectrum of packaging, graphic, communication, writing, printing and specialty paper requirements through its four world-class manufacturing units, 6 sales offices and a network of more than 50 dealers in India, along with an international trade network of 18 distributors / agents and 4 finishing operations close to the market for providing faster service to the customers. It created value to customers by utilizing their distribution and manufacturing strengths. Social: This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value". Environmental: In this relentless pursuit to create enduring value, ITC has achieved many milestones - it is the only company of its size and diversity to be: Carbon Positive 5 years in a row - Sequestering twice as much carbon as it emits. Water Positive for 8 consecutive years - Creating more rainwater harvesting potential than its net consumption.

Solid Waste Recycling Positive - Reusing/Recycling more solid waste than generated.

INFORMATION TECHNOLOGY ITC Infotechs customer centric go-to-market approach is organized by industry verticals. While an enterprise range of technology capabilities and world class quality processes form the foundation of ITC Infotech's cutting-edge IT service strength, a sharp domain focus ensures that IT services delivery always places business needs ahead of technology. ITC Infotech provides IT solutions by addressing customer pain points through innovative solutions, optimizing their IT landscape and maximizing returns from IT investments. Agri Commodities & Rural Services ITC's pre-eminent position as one of India's leading corporates in the agricultural sector is based on strong and enduring farmer partnerships that has revolutionized and transformed the rural agricultural sector. E-Choupals ITC's empowerment plan for the farmer centres around providing Internet kiosks in villages. Farmers use this technology infrastructure to access on-line information from ITC's farmerfriendly website www.echoupal.com. Data accessed by the farmers relate to the weather, crop conditions, best practices in farming, ruling international prices and a host of other relevant information. E-Choupal today is the world's largest rural digital infrastructure.

Choupal Saagar

Following the success of the e-Choupal, the Company launched Choupal Saagar, a physical infrastructure hub that comprises collection and storage facilities and a unique rural hypermarket that offers multiple services under one roof. This landmark infrastructure, which has set new benchmarks for rural consumers also incorporates farmer facilitation centres with services such as sourcing, training, soil testing, health clinic, cafeteria, banking, investment services, fuel station etc. 24 'Choupal Saagars' have commenced operations in the states of Madhya Pradesh, Maharashtra and Uttar Pradesh. This basically is innovation in terms of Rural Consumer needs.

Choupal Fresh It ensures the availability of fresh products in the market, besides directly sourcing farm fresh produce from the farmers.

Choupal Pradarshan Khet To help farmers enhance farm productivity by adopting agricultural best practices.

Leaf Tobacco, Spices and Agri Inputs ITC's value proposition to its customers is "On Time In Full" delivery of quality tobaccos spanning across all tobacco types at competitive prices. CONCLUSION: From the various details given above with regards to the different ITC verticals, we can say that ITC developed value for Customers by Branding, Innovation, Pricing, Quality and Utility.