HISTORY OF ITC LTD

 ITC incorporated on August 24, 1910 under name 'Imperial Tobacco Company of India Limited'.  1925: Packaging & Printing Business.  1975: Hotels business with acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'.  1979: Paperboards business by promoting ITC Bhadrachalam Paperboards Limited.  November 2002: merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division.  1985: Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture.  1990: Agri Business Division. 2000 e-Choupal initiative began.  2000: Expressions range of greeting cards.  2000: Lifestyle Retailing business with the Wills Sport range. 2002: Wills Classic formal wear  2002: John Players and later on Miss Players  2003 : Wills Clublife evening wear.  2002: Paperkraft  2003: Classmate

BACKGROUND
y The Company s beginnings were humble. A leased office on Radha Bazar

Lane, Kolkata, was the centre of the Company's existence.

y The Company celebrated its 16th birthday on August 24, 1926, by

purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.
y This decision of the Company was historic in more ways than one. It was

to mark the beginning of a long and eventful journey into India's future.
y The Company's headquarter building, 'Virginia House', which came up

on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks.
y Though the first six decades of the Company's existence were primarily

devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company.

PRODUCTS AND SERVICES OF ITC LTD-

PRODUCTS OF ITC LTD

y CIGARRATES: y STATIONERY

PRODUCTS:

 AGARBATTIS

y SAFETY MATCHES:

y SUNFEAST BISCUITS

y BINGO!

y LIFESTYLE

y PAPERBOARDS AND

RETAILING:

SPECIALITY PAPERS:

y PERSONAL CARE

y MINT-O

PRODUCTS:

SWOT ANALYSIS

STRENGTHS y ITC leveraged it traditional businesses to develop

new brands for new segments. y 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. y ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business. y ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery.

Weaknesses
y The company's original business was traded in tobacco. ITC stands for Imperial Tobacco Company of India Limited. y 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. y 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. y 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
y 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. Technology, supporting business solutions.

y ITC is moving into new and emerging sectors including Information y 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. y It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages.
y ITC leverages e-Choupal in a novel way. The company researched the

tastes of consumers in the North, West and East of India of atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names such as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market.

y This concept is tremendously difficult for competitors to emulate. y Chairman Yogi Deveshwar's strategic vision is to turn his Indian

conglomerate into the country's premier FMCG business.

Threats
y The obvious threat is from competition, both domestic and y y y y y

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. ITC's opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium-term. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future. ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.

BCG MATRIX OF ITC LTD

y BOSTON CONSULTING

GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970 s. businesses or products are classified as low or high performers depending upon their market growth rate and relative market share. which is based on the observation that a company s business units can be classified in to four categories: Stars Question marks Cash cows Dogs

y According to this technique,

y It is a portfolio planning model

y y y y

BCG OF ITC
y StarAgri Business Hotels Paperboards & Packaging y Question mark FMCG-Foods y Cash Cow FMCG-Cigarettes y Dog
ITC Infotech

TYPES OF STRATEGIES
y INTEGRATION STRATEGIES

Backward integration: In this strategy organisation seeks Ownership & increased control on Company s suppliers. Eg ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business.

Intensive Strategies
In this strategy business have to put intensive efforts to improve its competitive position
 Market Penetration: The organization tries to

capture market share in the existing product and aims at expanding its business at a rate higher than the industry growth. Eg : ITC has captured substantial market share in cigarettes

Diversification Strategy
In the early 70 there were trend to acqurie and manage diversed and unrelated bunisess so has to generate better profitability.
Conglomerate Diversification:
When an organization adopts a strategy which requires taking up those activities which are unrelated to the existing business definition of one or more of its business, either in terms of their respective customer groups, customer functions or alternative technologies

Eg : ITC, a cigarette company diversifying into the

hotel industry,biscuits,paper and packaging,edible oil etc.

GENERIC STRATEGIES
y Generic strategies were used initially in the early 1980s, and seem to be even more popular today. They outline the three main strategic options open to organization that wish to achieve a sustainable competitive advantage.

FOCUS STRATEGIES: ITCs paperboards and packaging focuses on packaging for industrial/commercial purpose. ITCs classmate notebooks and stationery products focuses on addressing the needs of children.

RECOMMENDATION


According to the survey conducted and after analyzing the Price, Promotion, Place and Product of the ITC and the consumer behavior in the market the company can implement the following measure for increasing the sales and volume of their products. Advertisement for the Aashirvaad atta is found to be ineffective and infrequent. So,the company can come up with an aggressive advertisement to attract the Indian housewife as theyare found to be the decision maker in the buying of ATTA The branded atta can be exported to other countries where we are currently exporting the whole wheat.

The company can approach the government or distributing their products in Military canteens and can sell them to organization that provides the afternoon meals to the children as a part of mid-day meal scheme. Precision analysis of products in Food Business. Process optimization for product development in Food Business. Impact of measures for reduction of energy consumption and consequent impact on the cost of production of goods.

 

CONCLUSION
y ITC promoting their brands through advertisement campaign as well as door to door promotion. y ITC is also focusing on Retailers and Wholesalers to promote their brand. y The demand of their product in very low, because people don t know about their brands very well. y ITC knows their strength and weakness in the personal care market, so they are applying new concept to overcome their weaknesses. y ITC now offering more margins, exiting offers and long credit period to retailers and wholesalers.

THANK YOU