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MBA
Incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company Company rechristened 'ITC Limited in 1974 One of the 8 Indian Companies to feature in Forbes A-list for 2004
Cash Profits
Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April
09)
2006)
Diversified conglomerate with interests ranging from Tobacco to Hospitality
Rural Indias largest Internet-based intervention Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million farmers
Low Margins
Low Investment
Low Productivity
ITC e-Choupal
Started in the year 2000 Target Area so far 38,000 villages, 6500 kiosks, 9 states Wholly owned by ITC
Why it become a success ? Only initiative to attempt to combine Services and an Effective Business Model successfully
Trader
Broker
ITC-IBD
Agril University, Met Dept, Insurance Co.
VLW (of Dept of Agriculture)
Processor
Money Lender
Farmer
Pricing
Inbound Logistics
Inspection Grading
Hub Logistics
Pricing Previous days closing price used as benchmark price for next day Mandi prices communicated to sanchalak through e-Choupal portal Sanchalak inspects the sample, assesses quality and gives farmer a conditional quote and a note (name/village/quality tests/approx. quantity/conditional price), if farmer decides to sell to ITC
Inbound Logistics Farmer proceeds to the nearest ITC procurement hub with the note Some procurement hubs are ITC factories, others are purely warehouse operations ITCs aim is to have a processing centre within 30-40 km radius of its farmers Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmers produce To change farmers attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply
Weighing and Payment Farmers produce is weighed on electronic weighbridge He is then given full cash payment Freight expenses are reimbursed Appropriate documentation at each stage and farmer is given a copy of that Samyojaks handle cash operations Hub Logistics Farmer transports his produce to the nearest processing centre or storage hub ITC incurs the transportation cost The farmer bears the risk of transportation until produce is delivered and the sale is completed
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Technological support Nodal platform catering to commodity blending, agricultural trading, e-choupal &rural distribution 24,000 personalized business function points 110,000+ pre-built business function points Integrated Business Systems for Direct Agriculture Procurement, Rural Distribution, e-Choupal Management, Exports, Insurance, Aqua Processing & Commodity blending Support for 8 local languages
A win-win Deal
Farmers gain Better information Content Better info timing Less transportation Cost Transaction duration Weighing accuracy Professionalism ITC gains Disintermediation savings Freight costs Quality control Risk management
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Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
Generation of Goodwill & positive public opinion Better supply chain for ITCs Food & Agri Businesses Costs, Quality, Traceability Access to the Underserved Rural Markets Through a Virtuous Cycle created by Larger Incomes, and founded on Trust that is built New ITES Business Opportunities Health, Education, Entertainment, eGovernance
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M A R K E T S
Branded Foods
Lifestyle retailing
Education Stationery