ITC

About ITC

Founded Headquarters Chairman Net Sales Employees

August 24,1910 Virginia House, Kolkata Mr. Y.C.Deveshwar 6 Bn $ 25,000 app.

FMCG

Info

Hotels

ITC

Agri Biz

Paper

ITC INTEGRATION

DIVERSIFICATION

Conglomerate Diversification
1910
ITC was incorporated under the name of 'Imperial Tobacco Company of India Limited

1925

ITC's Packaging & Printing Business was set up as a strategic backward integration for ITC's Cigarettes business

1975

ITC launched Hotels business with the acquisition of a hotel in Chennai which was rechristened ITC-Welcomgroup Hotel Chola ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited

1979

1985

ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture.

Conglomerate Diversification
1990
ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters.

2000

InfoTech India Pvt Ltd

2000

E-choupal was started

2000

Life style Retailing with the Wills Sport range

2000

ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative

Conglomerate Diversification
2000 2001 2002
ITC launched a line of high quality greeting cards under the brand name 'Expressions'. ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand Paperkraft: Premium range of notebooks Classmate: Indias largest notebook brand ITC's foray into the marketing of Agarbattis (incense sticks) in 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

2003 2005

Concentric diversification
FMCG
Food & Confectionary 1. Staples: Aashirvaad Atta, Salt, Spices
2. 3. 4. 5. Biscuits: Sunfeast Salty Snacks: Potato chips, Bingo! Confectionery: Candyman, Mint-o Ready to Eat: Kitchens of India, Aashirvaad ReadyMeals, Aashirvaad Instant Mix, Sunfeast Pasta

Cigarettes
Upper Class Brands: Insignia, India Kings and Classic, Berkeley Middle Class Brands: Gold Flake, Silk cut and Navy cut, & Scissors Lower Class Brands: Bristol, flake, & Capstan.

Concentric diversification
FMCG
Greeting, Gifting and Stationary

Safety Matches & Agarbattis

Personal Care

Hotels
ITC Maurya (Delhi), ITC Maratha (Mumbai), ITC Grand Central (Mumbai), ITC Sonar (Kolkatta), ITC Windsor (Bengaluru), ITC Kakatiya (Hyderabad), ITC Mughal (Agra).

Packaging & Paperboards

Agri-Business

E-choupal

Leaf-tobacco Agri-Export

Life style Retailing

ITC: Acquisitions
After all, INORGANIC growth is FASTEST growth!

ITC Companies

Major Motive behind acquisitions

To reduce the dependency on Cigarettes Business

Uncertainty of future of tobacco

Government norms
Pressure from Domestic as well as International Health Bodies

ITC Hotels

Hotel in Chennai

=
'ITC-Welcomgroup Hotel Chola 1975

ITC Paperboards & Specialty Papers Division

Tribeni Tissues Limited

Tribeni Tissues Division (TTD)

1990

Backward Integration: Tobacco Business

Business restructuring: Largest Company in India in the

sector
NOW..

ITC Infotech

=
19 Aug 2008

Helpful in enlarging the geographic reach of services offered

Creating new opportunities for diversified offerings across

industry verticals

ITC confectionery

=
2002

Entry in Rs. 800 Cr (in 2002) confectionery industry Now Industry size Rs. 1400 Cr growing at 9% p.a.

ITC Matches Business

=
2005

Horizontal Acquisition Reducing energy consumption in operations Entry in Agro-forestry Business through WIMCO

Outcome..??

ITC: Resources & Capabilities

VIRU Analysis

RESOURCES AND CAPABILITIES

Resources:

Employees: more than 25,000

World class R&D center and Scientists Financial Resources

Share Capital - Rs 380 Cr

Reserves and Surplus - Rs 13700 Cr Fixed Assets of worth - Rs 9150 Cr

Brand Name
Trust celebration of 100 years

RESOURCES & CAPABILITIES

Capabilities:

State of art manufacturing units of ITC

Effective Logistics Strong Distribution network and reach Brand Extensions Making use of technology and manpower to develop

resources. E.g. eChoupal initiative - for efficient &

effective procurement

VIRU ANALYSIS
Valuable: Brand Name 100 years of trust.
Costly to Imitate: Distribution Network Rare: E-Choupal Initiative, Leadership Bandwidth

VALUE CHAIN ANALYSIS - FMCG

Infotech

Echoupal

SCM

ITC FMCG Supply chain

More than 1000+ SKUs Warehousing space of more than 3.5m Sq.ft around 55+ Locations Products manufactured at 45+ plants More than 650 trucks moved every day from factories to Distributors. Combination of Rail/Road/Sea movement Target is to be Safer, Faster, cost effective

CIGARETTE INDUSTRY

BCG & G.E matrix

Sector Leader/ Compan Followe y growth r Industr y Size Company share Industry Com growth pany Gro wth

FMCGOthers I.T Cigarettes

Follower 12% Follower 4% Leader 4%

XL XXL XL

7%(M) (S) 70%(XXXL )

Retail Agriculture
Paper and Packaging Hotels

Follower 15% Leader

Leader

XXL XXXL
M L

1%(S) 30%(XL)
26%(XXL) 2%(S)

7%
10%

Follower 20%

BCG MATRIX
20% HIGH
Paperboards Hotels FMCG-Others

Lifestyle Retai

Agri-business
BUSINESS GROWTH RATE

5%
Cigarettes Infotech

LOW

-5%

5XHIGH

X LOW Relative MARKET SHARE

0.1 X

GE MATRIX
Business Unit Strength Strong Medium Weak
Retail

Market attractiveness Low Medium Hig

Agribusiness
FMCG-others Pape r boar d

Cigarettes

Hotels Infotec h